The United States government has imposed restrictions that bar Ghana from accessing American foreign assistance—including development loans and major programmes such as the Millennium Challenge Corporation (MCC)—after the country failed to meet key debt obligations owed to U.S. entities. The sanctions will take effect in the 2026 financial year.
An Economic Intelligence Report indicates that the decision is anchored in the “debt default restriction” outlined in Section 7012 of the FY 2025 State, Foreign Operations, and Related Programs Appropriations Act (SFOAA). The provision prohibits the U.S. from extending aid to countries that have defaulted on sovereign debt owed to, or guaranteed by, a U.S. person or official creditor, unless a restructuring agreement has been reached.
Both the MCC and the U.S. State Department confirmed on August 6, 2025, that they are obliged to enforce the law.
Two major defaults reportedly triggered the application of Section 7012 to Ghana. The first relates to Ghana’s December 19, 2022 announcement suspending payments on most external public debt, including Eurobonds, commercial loans, and bilateral obligations—financial instruments heavily held by U.S.-based banks, investment funds and asset managers.
The second involves about $251 million in unpaid obligations owed to several American companies such as Twin City Energy, American Tower Company, GSM, Chubb, Kosmos Energy and Zipline. Some of these debts, including those owed to Twin City Energy and Chubb, are guaranteed by the U.S. International Development Finance Corporation (DFC), raising concerns about potential losses to American taxpayers.
Chairman of the U.S. Senate Foreign Relations Committee, James Risch, has been vocal about the arrears, criticising Ghana for falling behind on payments to U.S. businesses while reportedly prioritising Chinese creditors. He has also encouraged Washington to use its influence at the IMF to restrict further financial support to Ghana.
The outstanding obligations are tied to the Government of Ghana or state-controlled institutions—believed to include the Electricity Company of Ghana (ECG). They are viewed as state-level failures to uphold public financial commitments rather than defaults by private entities. Ghanaian officials reportedly classify these unpaid debts as part of the $2.6 billion “energy-sector legacy debt” accumulated over years.
—after the country failed to meet key debt obligations owed to U.S. entities. The sanctions will take effect in the 2026 financial year.){kind=link}