Mr Kweku Ricketts-Hagan, a former Deputy Minister of Finance under former President Mahama, says the recent introduction GHC 100 and GHC 200 suggests rising inflation against government’s own claim.
He added that the new higher denominations by the Bank of Ghana (BoG), is not in tune with efforts to achieve a digital and cashless economy.
He said: “When you are talking about a digital and cashless economy, you cannot by the same breath go backwards and introduce higher denominations of the currency. “
Speaking to journalists at Parliament House, Accra on his impressions on the new GHC 100 and GHC 200 notes, Mr Ricketts-Hagan, said the high denomination generally suggested that inflation was rising but government had said inflation had been tamed, according to its own recent budget.
The former Deputy Minister described the new notes as “high value denominations,” and that, “Issuing the new 100 and 200 Ghana Cedi BoG can be interpreted as fraudulent.”
He said there was no justification in terms of economics or otherwise for introducing it, adding that an economy where the Government says inflation was going down and even boasting of single digit inflation, cannot justify the introduction of high value denomination.
“The two actions are incompatible and counter-productive. The country’s aim is to reduce the use of physical cash to settle transactions in the economy; the same economy is promoting higher denominations to make it easier to use physical cash to settle transactions. ”
The Lawmaker from Cape Coast South Constituency wondered whether the Bank of Ghana was working with the government to achieve a cashless economy or against it.
“ If BoG and Government are saying that these higher notes are not for the market traders but rather people who are higher up the economic food chain, then it’s wrong and a complete waste, because high net worth individuals and businesses who do high value transactions usually use the banking system.
“I can tell you that the people who will end up using the new notes are individuals who are going print their own counterfeit money, people who are laundering money, and people who will be looking at cleaning bribe monies through legal transactions.
“All these illegal activities will end up raising inflation and increase insecurity in the country, “he said.
Mr Rickett-Hagan accused the BoG of collapsing banks unnecessary with GHS 16 billion of taxpayer’s money and still asking for more money with no ending in sight.
“They have caused job losses, created ill-capitalized and insolvent banking system. And now, as if they have not done enough damage to the banking system, printing of these new higher notes will eventually make the banking system illiquid and create an adverse effect in access to financing,” the former Deputy Finance Minister said.
He added that the notes would make it easier to keep money at home than save with the banks, therefore reducing bank deposits in the medium term, and would mean less lending to the public; and that would affect banks’ ability to manage money supply and create a liquid economy.
“The idea that the new notes will help shore up the value of the Ghana Cedis by reducing inflation further is an economic illusion being pursued by the managers of the economy,” Mr Ricketts-Hagan said.