The International Monetary Fund (IMF) says there is hope Ghana's economic growth will improve this year driven by power sector reforms and new oil projects.
The West African country registered a subdued economic growth of 3.5 percent last year but there are hopes of a more robust growth in 2016.
IMF on Thursday said government plans to start oil production at Sankofa and TEN fields could help bolster the sluggish economy. "The projection also involves a pickup in non-oil growth," IMF representative in Ghana," Joël Touhas-Bernaté told journalist via video conference.
There's still a way to go before things are restored to a more sustainable path
Touhas-Bernate' said the two oil fields were likely to come on stream in the second half of the year.
President John Mahama's government has been introducing reforms to improve financial operations of utilities, particularly in the energy sector that have seen increases in taxes and levies. The move has been met with resistance from labour unions who want the taxes removed.
However, the government insists that the reforms are critical as they form part of a more comprehensive programme implemented as part of conditions for the IMF's recent $918 bailout for Ghana.
"This (the reforms) is very important for the sector, to improve delivery of electricity, and to complement efforts of authorities to bring in new power producers to reduce shortages," Touhas-Bernaté said. "This will be an important element in the pickup in economic growth that is expected this year."
The West African country had in the past relied heavily on hydro power as a cheaper source of energy but the operations were not efficient, forcing government to look for an alternative mix of energy sources. This has seen an increase in electricity from thermal power stations and gas production, which are considered more expensive.
The recent increases in electricity tariffs reflected new realities facing the country's power sector, the IMF said. "We recognise that this represents an additional cost for households and businesses, but this is a condition for maintaining the sector to be viable and able to deliver the electricity needed for the entire economy," he said.
IMF concluded the second review of Ghana's extended credit facility last week and described the country's performance as largely satisfactory, culminating in the approval of the disbursement of $114.6 million.
The Bretton Woods institution added that fiscal consolidation efforts as well as the objectives for 2015 of a fiscal adjustment of about three percent of the Gross Domestic Product were on track, and progress on structural reforms had also been widely satisfactory.
But, IMF maintained that challenges in the global economy meant that it would not be smooth sailing for Ghana.
"There's still a way to go before things are restored to a more sustainable path; the global environment with declining commodity prices and tightening in international markets leading to higher borrowing costs, have become less supportive and will make these efforts so much more difficult going forward," Touhas-Bernaté said.