Nearly two decades ago, U.S. aid money helped transform the face of Accra. The six-lane George Walker Bush Highway, one of the city’s busiest arteries, was built with Millennium Challenge Corporation funds.
Farmers across the country gained irrigation and storage facilities, while rural villages received new water systems and training support. For Ghana, the MCC was a proof that good governance and sound policies could bring tangible, debt-free investment.
That chapter now looks closed. Ghana has been declared ineligible for the MCC’s 2026 funding cycle, not because of politics or poor governance on paper, but because of debt.
After defaulting on most of its external obligations in 2022, the country has been locked in long and difficult restructuring talks. A $13 billion bond deal was agreed in 2024, but unresolved disputes with other creditors mean U.S. law bars fresh MCC money until the arrears are cleared.
Yet the debt story may not be the whole picture. Washington officials have long voiced frustration at how Ghana handled past MCC projects.
The first compact, worth $547 million and signed in 2006, delivered the George Bush Highway, irrigation systems and social services in rural districts. But procurement delays, weak local execution and political hurdles meant parts of the agriculture programme had to be scaled back.
The second compact, valued at $316 million and launched in 2014, aimed to tackle the chronic inefficiencies of the power sector. It funded grid upgrades, efficiency programmes and pilot renewables. Its flagship reform, the private concession to manage the Electricity Company of Ghana, collapsed in 2019 when the government cancelled the deal over disputed guarantees.
The MCC responded by withdrawing $190 million of funding, limiting its impact to basic infrastructure upgrades. For many in Washington, that episode reinforced doubts about Ghana’s appetite for politically tough reforms.
Taken together, the two agreements brought almost $863 million in U.S. financing and reshaped parts of Ghana’s economy. But they also highlighted recurring weaknesses: slow procurement, fragile institutions and resistance to structural change. The debt default may be the legal reason for exclusion this year, but those unresolved governance questions still hover in the background.
The loss is particularly painful because MCC financing comes as grants, money that does not add to Ghana’s debt stock. For a government trying to rebuild investor confidence, close infrastructure gaps and fund rural services, such financing is critical. Its absence leaves Accra more reliant on multilateral loans and commercial creditors at a time when the fiscal room is shrinking.
The politics in Washington add another layer. Donald Trump’s return to the White House has hardened U.S. attitudes toward foreign assistance. His first term was marked by efforts to cut aid budgets and tie support more closely to American interests. That approach has carried over into the MCC, where eligibility rules are now applied with little flexibility.
Ghana now finds itself grouped with 17 other countries, from Venezuela and Sri Lanka to Iran and North Korea, shut out of the 2026 cycle.
Officials in Accra hope that once debt talks are concluded, eligibility will be restored. But Trump’s moves to tighten U.S. aid and demand tougher conditions give no assurance that Washington will turn the taps back on quickly.
