US Restricts Ghana From Financial Aid Support Over Sovereign Debt Defaults
- Ghana will not benefit from certain forms of financial assistance from the United States, like development loans
- A report detailed how financial struggles under the Akufo-Addo administration contributed to this development
- US Senate Foreign Relations Committee Chairman James Risch previously raised issues with Ghana's indebtedness
The US government has barred Ghana from receiving foreign assistance, including development loans and flagship programmes such as the Millennium Challenge Corporation.
This is because Ghana failed to meet its debt obligations to the US.
Source: Getty Images
Citi News reported that, according to an Economist 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).
This prevents aid to countries that have defaulted on sovereign debt owed to, or guaranteed by, a US person or certain official creditors and have not completed a restructuring agreement.
Both the Millennium Challenge Corporation and the US State Department confirmed compliance with the law on August 6, 2025.
The Millennium Challenge Corporation partners with the best-governed poor countries worldwide to promote economic growth and help people lift themselves out of poverty.
Specific reasons for US restrictions on Ghana
The primary issue stems from Ghana’s announcement on December 19, 2022, that it would suspend payments on most of its external public debt, including Eurobonds, commercial term loans, and most bilateral debt.
The second default concerns $251 million in outstanding payments to several American 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 US government’s Development Finance Corporation (DFC).
The outstanding payments are linked to the government or government-controlled entities like the Electricity Company of Ghana.
They are considered political and legal failures of the state and its agencies to honour public commitments, rather than defaults by private companies.
The government has classified these obligations as part of the $2.6 billion 'energy-sector legacy debt' accumulated over time.
Top US senator complains about Ghana's debts
In July, a high-ranking US senator took a swipe at Foreign Affairs Minister, Samuel Okudzeto Ablakwa, while on his official duties in the US.
Chair of the US Senate Committee on Foreign Relations, James Risch, complained about mounting financial commitments to China while allegedly neglecting obligations to US companies and taxpayers.
Source: Getty Images
In a tweet, Risch said the US could not continue supporting Ghana financially while it serviced larger payments to China.
Ablakwa fired back at the remarks, saying that his criticism of Ghana's handling of debt payments was extremely offensive.
FBI warns students from Ghana
YEN.com.gh also previously reported that the FBI had cautioned Ghanaian and international students currently studying in the US.
The federal law enforcement agency has warned that these students have become targets for scammers working in the country.
An FBI agent told Fox News that scammers were targeting overseas students by exploiting their immigration statuses for profit.
Proofreading by Bruce Douglas, copy editor at YEN.com.gh.
Source: YEN.com.gh
