The United States government has barred Ghana from receiving foreign assistance, including development loans and flagship programs such as the Millennium Challenge Corporation (MCC), following the country’s failure to meet debt obligations owed to Washington.
The restrictions are set to take effect in the 2026 financial year.
According to an Economic Intelligence Report, the move is guided by the “debt default restriction” in Section 7012 of the FY 2025 State, Foreign Operations, and Related Programs Appropriations Act (SFOAA). The provision bars aid to countries that have defaulted on sovereign debt owed to, or guaranteed by, a U.S. person or certain official creditors and have not completed a restructuring agreement.
Both the MCC and the U.S. State Department confirmed compliance with the law on August 6, 2025.
Two key defaults appear to have triggered Section 7012’s application to Ghana.
The second default concerns $251 million in outstanding payments to several U.S. companies, including Twin City Energy, American Tower Company, GSM, Chubb, Kosmos Energy, and Zipline. Some of these obligations, such as those to Twin City Energy and Chubb, are backed by the U.S. government’s Development Finance Corporation (DFC), raising concerns about U.S. taxpayer exposure.
U.S. Senate Foreign Relations Committee Chairman James Risch (R-Idaho) has repeatedly highlighted these arrears, noting that Ghana prioritised payments to Chinese creditors while falling behind on obligations to U.S. firms. He has also urged the U.S. to use its influence with the IMF to block further funding to Ghana.
The outstanding payments are linked to the Government of Ghana or government-controlled entities, most likely the Electricity Company of Ghana (ECG). They are considered political and legal failures of the state and its agencies to honour public commitments, rather than defaults by private companies.
Ghanaian authorities reportedly classify these obligations as part of the $2.6 billion “energy-sector legacy debt” accumulated over time.
