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Ghana Economic Meltdown Hampers eCedi Introduction

Economic problems, including the financial challenges afflicting the central bank, are delaying the launch of Ghana’s electronic cedi (eCedi) currency.

Kwame Oppong, the Head of Fintech and Innovation at the Bank of Ghana (BoG), told CAJ News Africa that conditions at the moment were not conducive.

“When the economy has stabilised, BoG would not hesitate to implement the long-awaited eCedi,” Oppong said.

This comes a year after the piloting of the digital currency.

BoG is not on sound financial footing.

At the end of July, the apex bank reported a total loss of GH₵60 billion (US$5,2 billion), for the full year 2022. Of that loss, ₵53,1 billion was a direct result of the government’s domestic debt restructuring exercise.

BoG expressed concern that this had since become “a matter of unfortunate politicization” amid the opposition calling for the resignation of governor, Ernest Addison.

The eCedi, like other Central Bank Digital Currencies (CBDC), are becoming vital tools across the globe due to the opportunities they provide for clearing and settlements, domestic transfer, cross-border value transactions, among others.

The eCedi, according to experts, would improve the speed of liquidation of money while promoting security.

Other benefits are improved access to liquidity, enhancing the efficiency of interoperability, boosting payment efficiency, reducing transaction costs, promoting trust in digital payments, improvement in fraud management and helping scale up innovations in the digital financial sector.

Martha Acquaye, the Head of Digital Banking at Cal Bank Ghana, believes the introduction of the digital currency would create convenience for customers and reduce the risk of carrying bulk cash for transactions.

Some leaders in the fintech industry have called on the BoG to make the protection of customer data a priority during the implementation of the eCedi.

Romeo Bugyei, Chief Executive Officer of IT Consortium, believes the rollout of the eCedi would be exciting for players in the industry despite the challenges.

“For us in the fintech sector, this is an exciting time. We should not be worried about challenges but focus on the opportunities to build businesses around them. We need to plan and come up with solutions,” he said.

Stakeholders in Ghana’s fintech industry have called for a strong collaboration to enable the eCedi project to succeed.

The stakeholders comprise MobileMoney Limited, a wholly owned subsidiary of Scancom PLC, operators of MTN Ghana, IT Consortium and Cal Bank Ghana.

Clarence Blay, Assistant Director of the Fintech and Innovation Office of the BoG, assured that the eCedi would not take over from mobile money business but improve it and other digital payments in the country.

He therefore urged all stakeholders to support and promote the development of the eCedi.

The eCedi is anticipated to build on the gains made in the more than two-decade digital payments sector.

Digital currency expert, Yaw Boateng, urged the BoG and government to quicken the process towards the takeoff of the electronic currency.

He also encouraged all stakeholders to “take advantage of the opportunities of this form of currency.”

In addition to BoG’s problems, Ghana’s commercial banks and the larger financial sector are battling with the impacts of the government’s ongoing public debt restructuring exercise.

This crisis from 2022 marred the rebound from the slowdown emanating from COVID-19.

The World Bank’s recently released seventh Ghana Economic Update report noted currency depreciation, rising inflation and low domestic investor confidence.

Source: CAJ News