By: Kenneth Appiah Bani
Ghana has been deemed ineligible for Millennium Challenge Corporation (MCC) funding for the 2026 fiscal year, following the application of a debt-default restriction that disqualifies countries failing to meet the U.S. government agency’s financial risk requirements.
The decision results in the continued suspension of nearly $190 million in funding allocated to Ghana’s energy sector, a major component of the second MCC Compact aimed at improving electricity reliability, reducing system losses, and supporting power sector reforms.
Ghana’s disqualification marks a significant setback, especially considering the country’s history of strong collaboration with the MCC. Previous compacts brought notable national developments—most prominently, the construction of the George Bush Highway, major agricultural improvement projects, and institutional reforms that boosted economic productivity.
While the MCC confirmed that Ghana performed well in several governance and social indicators, the debt-related restriction remains binding until the government completes restructuring efforts and regains sustainable debt status.
Policy analysts warn that the suspension could affect investor confidence and delay critical energy-sector interventions. However, they also note that requalification is possible if Ghana demonstrates meaningful progress in fiscal consolidation, debt sustainability, transparency, and governance reforms.
Economic experts further emphasize that restoring eligibility would offer Ghana access to substantial U.S. development support at a time when long-term, low-risk financing is essential for stabilizing the economy.
As the government continues its debt restructuring programme with both bilateral and private creditors, stakeholders are urging a coordinated approach to reforms to ensure Ghana becomes eligible again for future MCC funding rounds.
