The official Ghana currency is the Ghanaian cedi. Each cedi is subdivided into one hundred pesewas (GP). After Ghana gained independence, they stopped using British currency and chose the Ghanian pound which was used from 1958 to 1965. The introduction of the name "cedi" came between 1965 to 1967 and it replaced the remote British pound system. The introduction was done under the first president of Ghana, President Kwame Nkrumah.
In 1966, a military coup ended the leadership of Nkrumah and a new leader took over. The new individuals running the country initiated the introduction of the new cedi between 1967 and 2007 with the intention to remove the face of the first president, Kwame Nkrumah. However, an extended period of inflation diminished the new currency and it was slowly removed. In 2007, the Ghana cedi was traded at 1:10,000. The 20,000 banknote that was introduced in 2007 became the largest unit note in Africa. However, its value has depreciated over the years.
The First Cedi and the Second Cedi
The “new cedi” took over from the first cedi in the year 1967 with a value of 1.2 first cedi which allowed for decimal exchange with the pound, with one pound being equivalent to 2 second cedi.
One British pound could be exchanged with 2 second cedi, however, after a few months the second cedi had depreciated and the trade rate was one pound for 2.45 second cedi. This was lower than the worth of the first cedi. An improvement in the cedi value occurred in 1967 when the British pound depreciated. This new value stood until 1973. However, inflation eventually weakened the cedi again and it dropped to an exchange rate of 2.80 cedis=$1.00.
Inflation kept weakening the worth of the cedi and government intervention worsened the situation. In 2007, the cedi was exchanging at 9500 cedis to one United States dollar which lead to the introduction of the third cedi.
The Third Cedi (GHS)
The third cedi bore the official name Ghanian Cedi while circulating together with the second cedi in 2007. The gradual removal of the second cedi took place and as of December 2007, at least 90% of the ancient coins were no longer in circulation. In 2008, old notes were no longer accepted in the banks and became illegal for tendering. In May 2010, a note of GH₵2 had been introduced due to the market demand. There was also a lower attached cost of producing large volumes of GH₵1. The Ghanaian Cedi had been devaluing since its introduction until the end of 2014 when IMF accepted to bail out the Ghana government which caused the currency to steady.
The issuance of Ghanaian coins is the responsibility of the Bank of Ghana. Commemorative coins have entered the market under different names, including in pounds (1958 to 1977), in shillings (1958), in crowns (1965), in sikas (1997 to 2003), and in cedi (2003 to date).
The Bank of Ghana has circulated the Ghanaian notes since 1958. A number of features have been changed to counter the production of fake notes. The imprint signature changes when a new governor assumes the responsibilities of managing the Bank of Ghana. No printing year is indicated on any note.