Ernest in Ghana

We received a pretty big raise. Cedi is the name of the local currency in Ghana. Each volunteer went from getting 1.5 million cedis to 1.8 million cedis per month. At the current conversion rate of around 9200 cedis to a dollar, we went from getting roughly 5 dollars a day to 6 dollars a day, a whooping 20 percent increase. The big raise got me to think more about money here in Ghana.

Who wouldn’t gladly take a 20% pay increase? Okay, a dollar raise may not sound like a whole lot but the buying power of a dollar is pretty amazing here in Ghana. But before I quantify the increase I want to first talk about my feelings towards it (see what Peace Corps is doing to me, talking about my feelings, geeze). I’ve always felt that surviving on five dollars a day has a nice ring to it. I realize it is still five times the earning of those living right on the poverty line (World Bank classifies those living under one dollar a day as living in extreme poverty) so by comparison we volunteers are relatively well off. Nevertheless, I still feel I am roughing it pretty good. Looking around, 28.5% of Ghanaian live below this poverty line. In fact Ghana has done a terrific job in poverty eradication. Poverty was at 51.7% in 1992 and 39.5% in 1998. Ghana is the only participating country in Africa on pace to meet the Millennium Development Goal of halving the proportion of those in extreme poverty between 1990 and 2015. Ayeeko! Much of the remaining work lies in the three northern regions where citizens rely on subsistence agriculture in this savannah area. Around 40% of poor people in Ghana live in these three sparsely-populated regions.

By comparison, 12.6% of American share this same label. Of course the poverty line is drawn quite differently in the US where single person families earning less than $9,800 or four person families making less than $20,000 are included in the statistics. There is much talk these days about the poverty crisis in the US. It is true that the rate has increased for four consecutive years (from 11.3%) but the truth is that the poverty rate has been between the range of 11 to 15 percent the last 40 years. I can hardly classify the current state as a crisis, but that would not sell any newspaper. Critics point out that the way poverty is measured by the Census Bureau is flawed, which I do not disagree. However, I am not hopeful that we will ever reach a consensus on how it could be “accurately” measured.

What does a dollar get you in the US? Maybe one bottled water, a weekday newspaper, 2 domestic stamps, not really a whole lot. But for 9,200 cedis one can get 3 full meals at a restaurant, 30L of filtered water, rent a room for a week, pay for one month of electricity, or use the internet cafe for an hour and a half. In fact, the amount we were getting before the raise (50,000 cedis per day) was more than sufficient to make a modest living. Not that I am accumulating a lot of wealth like some volunteers are since all the extra money goes into my luxury items that I can barely afford in Accra (latte, Indian food, pizza, etc.). I suppose that is the perk or the curse for living so close to the capital city. To further place this into perspective, at 1.8 million cedis per month, we are making more than most of the high school teachers in the country and the amount is not too far from a headmaster’s salary. So one can justifiably say we volunteers get paid fairly well since we earn as much as a professional or perhaps education workers are not being properly compensated for their efforts. I think both those statements are probably true but the latter is more pronounced. Therefore I don’t necessarily disagree with the teachers’ strike that happened last year. In any case, the average earning in Ghana is $421 per year so the regular folks are more concerned with basic needs like not being hungry and staying healthy.

Another thing that is neat about money here are, you must have noticed, all those zeros at the end of all the amounts stated. After massive inflation during the 70s and 80s, the cedi has devalued quite a bit. It was interesting going to the National Museum recently to see the 1 cedi bills that were printed and used fifty years ago. The inconvenient thing here is that the largest bill available is the 20,000 cedis bill. Furthermore, since electronic money like debit cards or credit cards or even checks are not widely available here, all monetary transactions are done in cash. Imagine going to a store to buy a computer costing around $500. That means one has to carry with him 250 bills in his pocket. It is not uncommon going to the bank and see people carrying a duffle bag of money to deposit. It is fun seeing someone handing to the bank teller countless bricks of 5,000 cedis and realize at the end it all amounts to less than a thousand bucks. The government is recognizing the problem and the inconvenience and at the same time observed the macroeconomic stability enjoying by the country. It has therefore decided to put in place a redenomination program to slash four zeros from the currency. In order to emphasize to the public that making the numbers smaller has no affect on the actual value of the currency, the slogan for the campaign is, “the value is the same.” It is funny to us here since no matter where you go you hear the slogan sang to this cheesy Ghanaian tune. Alright, you’ll just have to be here to appreciate it. Personally, I am very excited to be in the midst of a national currency redenomination effort, I can’t imagine experiencing anything like it without joining the Peace Corps.

This entry was posted on Tuesday, July 10th, 2007 at 9:18 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.