The United States government has placed Ghana on a strict foreign-assistance blacklist after the country failed to resolve outstanding debt obligations owed to American creditors. The decision means Ghana will be denied access to U.S. development aid, concessional loans, and major support programmes — including the Millennium Challenge Corporation (MCC) — beginning in the 2026 fiscal year.
According to a new Economic Intelligence Report, the sanctions stem from the enforcement of the “debt default restriction” outlined in Section 7012 of the FY2025 State, Foreign Operations, and Related Programs Appropriations Act (SFOAA). The law prohibits U.S. assistance to any country that has defaulted on sovereign debt owed to U.S. persons or official creditors and has not finalised a restructuring agreement.
Both the MCC and the U.S. State Department formally acknowledged Ghana’s non-compliance with Section 7012 on August 6, 2025, effectively locking the country out of future aid until the debts are settled.
Two Major Defaults Triggered the Ban
The first trigger dates back to December 19, 2022, when Ghana announced a suspension of payments on most of its external public debts — including Eurobonds, commercial loans, and bilateral obligations. Many of these instruments are held by large American financial institutions, funds, and asset managers affected by the moratorium.
The second trigger involves approximately $251 million in unpaid obligations owed to several U.S. companies, such as Twin City Energy, American Tower Company, GSM, Chubb, Kosmos Energy, and Zipline. Some of these debts are insured or backed by the U.S. International Development Finance Corporation (DFC), heightening concerns about risk to U.S. taxpayers.
Political Pressure Mounts in Washington
U.S. Senate Foreign Relations Committee Chairman James Risch has been one of the strongest critics of Ghana’s arrears, accusing the government of prioritising repayments to Chinese lenders while allowing debts to U.S. companies to go unpaid. Risch has also urged Washington to leverage its influence at the IMF to freeze additional financial support to Ghana until the obligations are cleared.
Ghana’s Side of the Story
The outstanding arrears are linked to the Government of Ghana and state-controlled entities — most notably the Electricity Company of Ghana (ECG). Ghanaian officials reportedly classify these debts as part of the country’s long-standing $2.6 billion energy-sector legacy debt, accumulated through years of structural inefficiencies and unpaid power-sector obligations.
While Ghana continues its broader debt restructuring efforts with international bilateral and private creditors, the U.S. restrictions represent one of the most significant diplomatic and financial consequences of the debt crisis so far.
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