GSR Blog Special Series #1: A Tale of Two

Cedis Part Two

This is the continuing saga of two adventurous cedi (the cedi is the currency of Ghana) notes who go out into the world to make their fortune. They almost decide to hitch a ride to China, but change their mind when they hear of other cedis that went to China but never came back.

The two cedis decided that it would not be worthwhile to travel to China to seek their fortune. But what about Washington or New York? How about investing themselves in an NGO development project? There were many such projects, and they all promised the people in Lili’s village a better life. For instance, a large hydroelectric project had just been completed. Foreign dignitaries showed up for the ribbon cutting ceremony. The Minister of Economic Development gave a nice speech explaining the importance of the project. Now five megawatts of power

were available for local development. Proceeds from the sale of electricity would fund school and clinic programs. Unfortunately, no one in Lili’s village had enough money to afford to pay for the electricity. There were no local businesses set up to take advantage of the electricity. Therefore there was no stimulus for local economic growth from this development project, and thus no benefit for the local community. There were many such projects, and the two cedis were trying to figure out which project would solve Lili’s problem. They were a bit sad when they finally reached the conclusion that there was so little impact from all these well intentioned efforts. The two cedis began to consider what were the actual problems preventing Lili and her family from emerging from poverty Why didn’t Lili make a big, well stocked market with a wide variety of

The Two Cedis

products? It was not because Lili and her husband were lazy – they worked hard! And they were also very motivated to improve their condition. The cedis realized that there were some obstacles preventing this:

Capital constraints – Lili didn’t have capital to build a big shop

Distance constraints

- no means to transport tons

of products to stock such a

shop

Infrastructure

constraints – A larger shop

requires cold storage to keep

unsold produce from going

rotten. Not only could Lili

not afford to build a cold

storage facility, but there was

not even be electricity to run

such a cold room

Competition from

other stalls selling the same items Time constraints – She is walking 4 hours each day to and from home to sell her goods.

She has no time to grow more food than she currently produces.

No banking facilities She has no bank account to hold and manage her cash flow

The cedis sat glumly in Lili’s pocket. It was a dark forbidding world out there! An innocent cedi

could easily become worthless!

Will the cedis finally find their place in the warm Ghana sun? Stay tuned for the next exciting

chapter.

Lili's Store