Historical Sketch

In the 15th century, the Portuguese established an overseas gold trade with the Akan states in West Africa, by which the name Gold Coast became common for the region. In the 17th century, several European powers established trade posts for gold and slaves. All but the British were given up until the mid-19th century. The Gold Coast colony was extended into the hinterland when the Ewe and Akan kingdoms were finally crushed in the early 20th century. The new territories were not merged into the colony but administered separately as Ashanti Colony and Protectorate of the Northern Territories. A fourth territory, British Togoland, was added after World War I when Britain and France partitioned the former German colony of Togoland. In 1957, the four colonies were merged into the independent state of Ghana.

Monetary History Overview

Traditionally, the Akan economy was based on gold, and gold dust was widespread in trade transactions. The weight system was sophisticated and varied regionally. Standardized scales and brass weight stones were used, the majority being simple with geometric decorations, but the weights were also elaborated into presentation pieces of figurative form. For trade with European settlers the Akan used a simplified weight system with the "Taku" (named after a seed) as base units.

In the mid-17th century, English slave traders of the "Company of Merchants Trading into Africa" founded a settlement on the so-called Gold Coast. They adapted to the gold dust currency used by the local population and introduced the Trade Ounce as a unit of account. In the local trade it was equivalent to goods at half an English ounce of gold dust, while on the English market it corresponded to 80 Shillings Sterling (about one ounce of gold) to compensate for the transport costs between West Africa and Europe. In 1796, the trade company issued subsidiary silver coins in fractions of the Trade Ounce to forego the need to deal with tiny amounts of gold dust. They were used mainly in payment transactions among the settlers and their export to England was forbidden.

In 1821, Great Britain took over the Gold Coast into colonial rule. The gold dust currency remained in use until it got officially abolished in the 1880s, but in the inland areas it was tolerated until the 1910s. The colonial administration introduced the Sterling accounting, but British coinage was never imported in large quantities. Foreign trade coins like the Spanish Dollar and French money from the neighbouring territories were common in the coastal areas. In June 1913, Great Britain created the West African Currency Board which issued a common currency for the four colonies of Gold Coast, Nigeria, Sierra Leone and Gambia. The British West African Pound remained current during the colonial rule.

In 1957, Ghana attained independence, abolishing the colonial name of Gold Coast. The new government decided to abandon the West African common currency, and in July 1958, the Ghanaian Pound became the national currency. Like its predecessor it was at par with the Pound Sterling. Decimalization was done in two steps the mid-1960s. The 1st Ghanaian Cedi of July 1965 was equivalent to 100 Pence, which proved to be an unhandy peg to the Pound Sterling. Therefore, already in February 1967, it got replaced by the 2nd Ghanaian (New) Cedi at 120 (former) Pence, hence valued at half a Pound Sterling. The rapid currency exchange was also triggered by the 1966 coup, as it allowed the new government to get away with symbols of its predecessor. The Cedi basically followed the Sterling devaluation of 1967 but repegged to the US Dollar on this occasion. In late 1971, a 44% devaluation was decreed and revoked a few weeks later, in 1978, the value was finally adjusted by about 60%. Ghana's political instability in the 1980s and 1990s led to an economic decline and to a depreciation of the currency. In 1983, a 90% devaluation was carried out, followed by a series of further adjustments that cumulated to another 85% depreciation. In 1987, the Cedi was floated and went into a long inflationary decline that continued until the early 2000s, when also the political situation had stabilized. In 2007, four zeros were cut, and the 3rd Ghanaian Cedi became the new currency unit. Currency stability was only of short duration, and the Cedi lost more than 20% of value within a year. Depreciation at a two-digits annual average has continued since then.

Ghana joined the International Monetary Fund (IMF) on 20.09.1957.

Currency Units Timeline

Currency Institutes Timeline

Monetary History Sources