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By Isaac Ato MENSAH/Lilly Adjorkor ADJEI
Accra – 1 May, 2019
The Chief Cashier of the UK exchequer says in just eight years, cash use in UK will reduce to around 16 percent of total transactions.
Sarah John, Chief Cashier of the Bank of England explained,“We therefore need to prepare for a world with less cash usage, without knowing exactly what path cash will follow, and be prepared to respond effectively and sensitively as society’s payment preferences change over the next few years.”
On almost the same day here in Ghana, a press release from the BOG stated:
“The Bank of Ghana will issue upgraded banknotes into circulation on May 6, 2019…… The upgraded banknotes also come with improved durability and machine readability”.
Why is the BOG interested in printing more of the same when state of the art technology has moved to polymer?
“More than 20 countries around the world use polymer banknotes – they include Scotland, Australia, New Zealand and Canada,” reported bbc.co.uk on 14 September, 2017.
But in tracking the health and performance of the monetary, banking and financial systems, economists are in agreement that broad money supply is the real McCoy. The banknotes and coins play only a limited role as money.
What this simply means is that economists and statisticians as well as central banks can track orders placed for raw material and production equipment and use that to track expected growth in money supply within an economy.
With the experience of the 2007 Cedi redenomination by Bank of Ghana in view, let us stay clear of needless controversy about how many Cedi notes are in circulation.
Bank of England gives us data for many years including, 2019: “There are over 3.6 billion Bank of England notes in circulation worth about 70 billion pounds”.
The Bank of Japan at the end of December 2018, likewise reported 17.0 billion banknotes in circulation worth 110.4 trillion yen.
When one reflects on these, one cannot help but agree that “we are fooling no one but ourselves; we deceive no one but ourselves,” to quote the oft-quoted mentor.
The broad money supply of some selected countries help you surmise the situation in those economies for yourself.
A careful look at these data, show that no matter how you slice it; type of government that runs the economy, geographical area under review or period under consideration, it is easy to categorize in real terms where sub-Saharan countries stand. Yet again, we find ourselves in the minor leagues.
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