 funding for the 2026 fiscal year due to restrictions triggered by the country’s debt default under U.S. legislation, dealing a significant blow to ongoing efforts to reform the energy sector.){kind=link}
Ghana has been ruled ineligible for Millennium Challenge Corporation (MCC) funding for the 2026 fiscal year due to restrictions triggered by the country’s debt default under U.S. legislation, dealing a significant blow to ongoing efforts to reform the energy sector.
The decision, announced as part of the MCC’s annual scorecard and eligibility review, immediately impacts approximately $190 million in suspended funding earmarked for energy sector modernization funds Ghana can no longer access until its fiscal situation improves.
Ghana’s disqualification marks a major setback for a country considered one of MCC’s most consistent African partners since joining the programme in 2004. Over the years, Ghana has completed multiple high-impact projects valued at nearly $1 billion across governance, agriculture, infrastructure, and energy.
Ghana’s partnership with the MCC has delivered some of the country’s most celebrated development projects:
• 2006–2008 Threshold Programme ($55m):
Focused on governance reforms, strengthening the Ghana Revenue Authority, and expanding access to credit through financial sector improvements.
• First Compact (2007–2012, $547m):
Targeted agricultural development and rural transformation.
Thousands of farmers benefited from improved irrigation, access to inputs, and training through farmer-based organisations.
Major infrastructure upgrades included the iconic N1 George Bush Highway, newly constructed schools, water systems, and health facilities.
• Second Compact – Power Compact (2014–2022, $316m + $37m Ghana counterpart):
Aimed to overhaul electricity distribution through ECG reforms, staff training, and grid enhancements.
However, the collapse of the Power Distribution Services (PDS) concession in 2019 weakened the compact’s long-term impact.
The immediate implication of Ghana’s 2026 ineligibility is the loss of an estimated $190 million in pending MCC support for energy sector restructuring. Analysts warn that Ghana must now seek alternative funding to continue modernizing its distribution infrastructure—critical for reducing losses and stabilizing power supply.
Development experts stress that Ghana’s reinstatement as an MCC-eligible country hinges on:
• Significant fiscal restructuring
• Improved public financial management
• Stronger governance and transparency measures