The Bank of Ghana (BoG) has commenced the gradual replacement of the GH¢1 and GH¢2 notes with their respective coin equivalences as hinted by the Head of the Regulator in the later part of 2021.
The Bank of Ghana’s 2021 Audited Financial Statement revealed that the Central Bank increased the GH¢1 and GH¢2 coins that were in circulation last year compared to the previous year.
In 2021, a total of GH¢38.29 million of the GH¢2 coins was within the public domain compared to GH¢19.81 million in 2020. Similarly, BoG increased the amount of GH¢1 coins in circulation to GH¢42.90 million in 2021, up from GH¢31.74 million in 2020.
Overall, the BoG increased the value of coins in circulation, including the 50 pesewas, 20 pesewas, 10 pesewas, 5 pesewas and the 1 pesewa in the 2021 financial year relative to 2020. The total value of coins in circulation last year amounted to GH¢365.11 million as against GH¢287.06 million in 2020.
The Central Bank reduced the GH¢2 Notes in circulation within the public domain to GH¢6.5 million in 2021, down from GH¢88.9 million in 2020. However, the GH¢1 Notes that were in circulation last year amounted to GH¢239.97 million, higher than GH¢179.04 million in 2020.
On Monday, September 27, 2021, the Governor of the Bank of Ghana, Dr. Ernest Addison, said his outfit was considering phasing out the GH¢1 and GH¢2 notes and replace them by their coin equivalents. The Governor cited poor handling of the notes that often results in more expenses being incurred by the state to replace them as a reason.
Other Cedi Denominations
The Bank of Ghana also increased the GH¢200 and GH¢100 notes in circulation last year but reduced the amount for most of the other denominations. The value of GH¢200 and GH¢100 notes in circulation last year were GH¢6.55 billion and GH¢4.32 billion respectively, compared to GH¢4.32 billion and GH¢3.40 billion respectively in the corresponding period of 2020.
BoG reduced the amount of GH¢50 notes in circulation last year to GH¢5.57 billion from GH¢5.72 billion in 2020. The value of the GH¢20 notes also reduced to GH¢4. 90 billion in 2021, from GH¢ 5.42 billion in 2020.
The value of GH¢10 and GH¢5 notes in circulation last year were GH¢ 2.45 billion and GH¢874.31 million respectively, both represents declines from their respective values of GH¢2.90 billion and GH¢1.05 billion in 2020.
Cumulatively, the total amount of Notes in circulation last year was GH¢24.90 billion compared to GH¢23.07 billion in 2020. Total currency in circulation- Notes and Coins- was 25.26 billion in 2021 compared to GH¢23.36 billion in 2020.
Currency Issue Expenses
The Bank of Ghana was able to reduce its currency issue expenses last year to GH¢179.65 million, from GH¢347.88 million in 2020. The reduction by GH¢168.23 million, represents a year-on-year decline of 48.36 percent.
As part of the currency issue expenses, the Central Bank disclosed that Agency fees amounted to GH¢3.26 million in 2021, higher than GH¢2.40 million in 2020. Amount spent on Notes printing however, declined significantly from GH¢337.51 million in 2020 to GH¢174.32 million in 2021. This means that the Central Bank cut down on its printing expenses by 48.35 percent last year. It also shows that BoG is gradually reducing the cost of printing which was GH¢306.2 million in 2019.
The final category of currency issue expenses known as ‘Other currency expenses’ also reduced by a very large margin in 2021 as per BoG’s report. This category of expenses declined to GH¢2.07 million in 2021, from GH¢7.97 million in 2020.
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