Will A Gold-backed Ghana Cedi Ever Be Possible In The Republic Of Ghana?

After the financial crisis of 2008, it was said by analysts and academics with expertise in economics, that   the old economic certainties no longer held true - and that the only certainty was uncertainty.


It is a dictum that still holds true -   as can be seen in the Euroland debt crisis, and the International Monetary Fund's (IMF)  gloomy  global economic outlook.


It is because the old  certainties no longer apply that an acquaintance and I took it upon ourselves to listen to, and  read,  public pronouncements on the economy  by  the New Patriotic Party's (NPP) last-word in economics, Dr. Bawumia -  from the time  he was picked to be the running mate of the party's presidential candidate, Nana Addo Danquah Akufo-Addo, to date.


At this point in that tracking exercise, alas, l shall have to agree with  my acquaintance, who insists that Dr. Bawumia talks like a man who forgets that the old certainties no longer apply. He is not impressed by him at all, unfortunately.


There has been occasion when some of the members of his party have  mentioned the redenomination of the cedi, for example,  as one of the "achievements" of his time at the Bank of Ghana.


Well, I remember poking fun at President Kufuor,  when he proudly boasted that  the new Ghana  cedi had parity with the U.S. dollar -  and saying to my  acquaintance that a new currency used in an economy with the kind of structural imbalances  ours was lumbered with, would soon experience a crisis of confidence - and fall freely.


It was not long before Kufuor & Co. were  raiding our foreign reserves for cash in hard currency to shore it up. Daft. Millions of dollars was spent in that exercise in futility. And I actually had  an interesting  dream once,  around that time, as it happens.


In it,  I remember wondering to myself,  what would have been the outcome,  if the bright sparks at the Bank of Ghana (where Bawumia was serving as Deputy Governor,  incidentally) had thought outside the box  - in an age of uncertainty -  and instead of  recommending   redomination and the issuance of a new currency,  rather   dared  to recommend  the adoption of the U.S. dollar as a transition currency for Ghana - or,  better still,   asked Kufuor & Co.  to link  the new Ghana cedi with  gold: and made  our nation one on the gold standard with a gold-backed Ghana cedi.


Would that not have  been  a sure-fire means of ensuring   stable value for money - with all its  attendant benefits, I ask?  Perhaps the question we must ask is: In a nation with a political class not famous for imaginative thinking, will adopting the gold standard  and having  a gold-backed Ghana cedi, ever be possible in the Republic of Ghana?


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