Refusing Smaller Denominations Is Making Everything Expensive in Ghana

We Are the Reason Pure Water Will Soon Sell at GH¢1

Some months ago, I had an argument with a taxi driver over 20 pesewas and people around were looking at me in surprise. The fare then was GH¢3.80, but because most Ghanaians refuse to accept smaller denominations, drivers intentionally pegged it at GH¢4.00.

We were in this country when pure water sellers wanted to sell a 500ml sachet of water for 70 pesewas and GH¢1 and we all shouted that it was too expensive. We forgot that if we were accepting smaller denominations, the price of 500ml pure water would probably be between 35 and 50 pesewas. I will not be surprised if by the end of 2027 we are buying one sachet at GH¢1. It is because we are not ready to accept the smaller denominations.

And this is affecting everything we buy on the market, including toffees, minerals, biscuits and other basic items. Things that should be priced at 20p, 30p, 80p, GH¢1.10 or 70p are now priced at GH¢2.50 or GH¢3.00. You cannot entirely blame the sellers because they know the smaller denominations are no longer accepted. This habit may not directly reduce the prices of items, but it will reduce the rate at which prices increase. What is happening now is that goods that are supposed to cost less than certain amounts are being rounded up to the bigger denomination. It sometimes does not make sense, but you cannot complain because you are part of the problem.

The Coins Are Still Legal Tender

According to the Bank of Ghana, all coins issued by the Central Bank – including 1 pesewa, 5 pesewas, 10 pesewas, 20 pesewas, and 50 pesewas – are still legal tender. It is actually an offence under Ghana’s laws for any person to refuse to accept them for payment.

In 2019, the Bank of Ghana had to issue a public notice reminding Ghanaians that it had not withdrawn any of its coins or notes from circulation. The problem is not from the Central Bank; the problem is from us. We have informally banned our own coins, and we are paying the price for it through inflated pricing.

Two Places Where You Feel It Most

The first is in trotro. A distance that should cost GH¢4.20 is rounded to GH¢4.50. Circle to Madina that should be GH¢6.80 becomes GH¢7.00. On paper, it is just 20 or 30 pesewas. But if you join trotro twice a day for 26 working days, that 30 pesewas become GH¢15.60 extra a month. Multiply that by 12 months and you are paying over GH¢187 just because we refuse coins.

The second is at the provision shop. Go to Makola or any table-top seller and ask for one toffee. Ideally, it should be 30 or 50 pesewas. Because the seller knows you will not accept 10 pesewas change and she also does not have it, she will price three toffees for GH¢2.00 instead of GH¢1.50. We have destroyed the ability to price things accurately. So, every trader is forced to push the price to the next whole cedi to avoid an argument over change.

Fares have been increased and the pattern continues. Now you will not hear a fare like GH¢4.20, but GH¢4.50, or GH¢22.50 but GH¢23.00 or more. It continues like that for all products and services. And you think you are smart. You are slowly inflating prices yourself without knowing it.

What we must do differently

You can only see those coins exchanging hands in the malls like Shoprite, Palace Mall, and Shell shops because they are regulated and can be sanctioned if they refuse them. Their system forces them to account for every pesewa. So, what is the solution?

First, the Bank of Ghana and GPRTU must enforce acceptance. Drivers and traders who refuse legal tender should be reported. If the system accepts it, citizens will have no choice.

Second, banks should make coins available. Most commercial banks will not give you coins when you request them unless you insist. They prefer to keep them. We need a deliberate effort to push coins back into circulation.

Third, and most importantly, we the citizens must change our attitude. I challenge you today to walk to any bank and ask for those coins. Use them to buy things and take your change even if it is 10 pesewas. Let them stay in circulation so that in the next pricing window, at least drivers, traders, and GPRTU leaders will know we now accept smaller denominations.

If we accept 10 pesewas today, we will save 50 pesewas tomorrow.