Ghana: Road to Recovery? My taxi driver's view

This morning I had an interesting chat with my taxi driver in Accra, Ghana. His name is Francis and I have known him for a quite a number of years. Always love getting his views (besides reading the FT, or The Economist or other regular economic reports). Nothing can beat getting on the ground, micro information. When I asked Francis of how's Ghana doing, his response was: by the grace of god, we are doing better this year than last 2 years. When I asked what do you mean by better, he stated the following:

1/ IMF has brought in fiscal discipline and Government has been good and able to use IMF money to stabilise the economy;

2/ Water access has improved especially in places where they never had water. Using sea water (desalination process) to provide for townships where water access has always been a problem;

3/ Improvements in road infrastructure: Upgrading of existing road networks and construction of news roads. Improvement in traffic flow (interestingly a journey that normally takes me 1 hour from Accra Airport to West Hills Mall, took me 40 minutes this morning);

4/ Implementation of lights on the highways and solar panels to juice up traffic signals (yep, I have seen these in action today), and long last they do work;

5/ Implementation of security cameras at major intersections (yep also saw these today)

6/ Power cuts are not that often as of 2014/15. Francis couldn't recall when they had a power cut in his suburb. Very different to last year, where he used to go without power for 48 to 72 hours non-stop;

7/ Old meters being changed with new meters to improve electricity provision and collection;

8/ Work has commenced for the $100Million upgrade of the airport in Tamale to improve access to the Northern Region.

9/ Commencement of construction of new terminal at the Kumasi airport, following the implementation of the lighting system allowing flights to land at night;

10/ Building of 200 secondary schools nationwide, out of which 123 are under construction and 15 have been delivered this year.

Then he wrapped up comparing Ghana with Nigeria saying that it's amazing to see how Ghana has turned lately while Nigeria (the West Africa big brother) has gone the other way round lately. His Ghanaians friends who live/work in Nigeria have packed up their bags to come back to Ghana.

By the time he dropped me at West Hills Mall (40 minutes later), I received the following email. But Francis had already summed up the Ghanaian mood for me. So following is an endorsement of the possible feel good factor explained by Francis. 

Moody’s Investors Service (Moody’s) affirmed Ghana’s sovereign credit rating on September 23. The country’s rating therefore remains unchanged at “B3”; however, Moody’s decided to revise the outlook from negative to stable. This decision was based on three drivers: Firstly, Moody’s is especially pleased with the institutional reforms implemented over the past year in addition to significant progress on reining in the fiscal deficit under the auspices of the International Monetary Fund (IMF) support programme. Secondly, the rating agency highlights that government liquidity risks have subsided following the successful issuance of a $750m Eurobond in September “earmarked to redeem the remaining $400m October 2017 Eurobond maturity.” Finally, Moody’s is of the view that Ghana’s external balances will improve in line with the development of oil & gas resources, which, in turn, bodes well in relation to foreign reserve holdings. According to Moody’s, the stable outlook on the country’s sovereign credit rating balances these improvements “against Ghana's continuing credit challenges and vulnerabilities, including a high debt burden, very low debt affordability, elevated funding requirements and challenging medium-term international bond maturity profile.”