Two defensive mistakes allowed Solomampiona Koloina and Tokinantenaina Olivier to give Madagascar a commanding lead before substitute Augustine Agyapong pulled one back for Ghana.
Annor Walker’s side started the game badly when a defensive mix-up allowed Koloina to get behind the Ghanaian defense to score after just 10 minutes.
Despite enjoying a greater share of possession, the Black Galaxies failed to capitalize on chances and were wasteful upfront.
Daniel Afriye Barnih, Razak Yusif and Dominic Nsobila all missed some glorious chances as Ghana went into the break a goal down.
The second half played out much like the first, with Madagascar doubling their lead after another blunder at the back.
Ghanaian right-back Augustine Randolph smoothed his lines, allowing Olivier to steal the ball before lobbing it past goalkeeper Danlad Ibrahim.
Although Augustine Agyapong came off the bench to reduce the deficit for Ghana with a bold attack, it was too little too late as Ghana fell to a 2-1 defeat.
The result leaves the Black Galaxies at the bottom of Group C, which consists of just three teams due to Morocco’s withdrawal from the tournament.