He said per his calculations, the introduction of the new notes was fraudulent because there was no economic justification for it to have been introduced.

Speaking to the Daily Graphic in an interview, the former Deputy Minister of Finance said in an economy where the government was touting low inflation figures, it was economically unjustifiable to introduce “high value denomination”.

“The introduction of high denomination generally suggests that inflation is rising, but that is not the case according to the government’s own recent budget,” he said.

The Governor of the central bank, Dr Ernest Yedu Addison, in November this year announced the introduction of GH¢100 and GH¢200 notes to the country’s currency denomination.

He also announced that a ¢2 coin had been introduced.

According Dr Addison, a lot of thinking went into the decision to introduce the higher denomination banknotes as the structure of the banknote was expected to align well with the needs of the people who used them for their daily transactions.

“We need banknotes and coins that are convenient for most people to use, high quality, secure and cost-effective. Accordingly, in March 2017, the Bank of Ghana began a process of conducting a thorough review of the structure of the currency, including the note/coin boundary and acceptability and use of the individual currency series,” Dr Addison said.

Digitalisation

However, owing to the government’s agenda to drive the economy into a cashlite regime, Mr Ricketts-Hagan said it was not prudent for the government to introduce new notes when the economy could ride on emerging technologies to make high-value transactions.

“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.

“That is definitely taking a step back from your objective of achieving a cashless economy because the two actions are incompatible,” he noted.

Mr Ricketts-Hagan explained that it had been the agenda of successive governments to reduce the use of physical cash to settle transactions so it was not proper that the same economy was promoting higher denominations to make high-value transactions simple.

“That is senseless,” he said.

He said it was now confusing to ascertain whether the Bank of Ghana (BoG) was working with the government to achieve a cashless economy or against it.

“If the BoG and the 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 its wrong and a complete waste, because high net worth individuals and businesses that do high value transactions usually use the banking system,” he said.

Counterfeit

Mr Ricketts-Hagan warned that the injection of the new notes into the economy would rather propel the influx of counterfeit money in the economy and also encourage money laundering.

“I can tell you that people who will end up using the new notes are individuals who are going to 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.

Given that the central bank has just completed its banking sector clean-up recently, Mr Ricketts-Hagan said the effects of the clean-up were still fresh and further made the printing of the new notes unjustifiable.

“This government has collapsed banks unnecessarily with GH¢16 billion of tax payers’ money and still asking for more money with no end in sight, and has caused job losses, created ill-capitalised and insolvent banking system and now printing of these new higher notes will eventually make the banking system illiquid and create an adverse effect in access to financing,” he said.

He added that contrary to suggestions that the new notes would help shore up the value of the cedi by reducing inflation further, it was an economic illusion by the managers of the economy.