Burkina Faso's military authorities have summoned Ghana's ambassador over allegations they have hired Russian mercenaries to help fight jihadists.
Wagner Group's presence in Burkina Faso was "distressing" said Ghana's President Nana Akufo-Addo.
Burkina Faso has been struggling to contain Islamist militants who operate in many parts of the country.
Neighbouring Mali faces a similar challenge and is already widely believed to be working with Wagner.
Since Capt Ibrahim Traoré seized power in Burkina Faso in September, there had been widespread speculation that he might follow suit and start working with Russian mercenaries.
Both countries have already cut long-standing security ties with France, the former colonial power.
While visiting Ghana, the UK's Minister for Development and Africa Andrew Mitchell said Britain was concerned about the activities of Russian mercenaries in West Africa.
Mr Mitchell told the BBC that Russia's presence in the region was "neither constructive nor helpful."
Capt Traoré has promised to win back territory from the jihadists, and to hold democratic elections in July 2024.
His government has also recalled the Burkinabe ambassador in Accra for a "consultation" over comments made by the Ghanaian president.
President Akufo-Addo, speaking on the sidelines of the US-Africa summit in Washington DC on Wednesday, said Ghana's northern neighbour had made a deal with the mercenary group.
"Today, Russian mercenaries are on our northern border. Burkina Faso has now entered into an arrangement to go along with Mali in employing the Wagner forces there," he said.
He also said that Burkina Faso had ceded a mine, reportedly with gold reserves, near the border with Ghana in exchange for the group's services to deal with the militant insurgency that began in 2015.
In recent weeks, hundreds of people fleeing militants attacks in Burkina Faso have crossed the border into northern Ghana.
So far, there has not been any official confirmation about an agreement between the Wagner Group and Burkina Faso, even though Prime Minister Apollinaire Kyelem recently visited Russia.
The reports that Mali was working with Wagner fighters were one reason why France withdrew its forces from the country in August – after nearly a decade of helping to fight jihadist fighters in the country.
The details of any pact between Mali and the mercenary group, which has been accused of committing atrocities in the country, including killing civilians, remains unclear.
Jihadists attacks have continued in many parts of the country despite the presence of the Russian mercenaries, described as instructors by Mali's military authorities.
Wagner also has fighters in Libya, Central African Republic and Mozambique.
Additional reporting by Thomas Naadi in Ghana
How Russia has outflanked Ukraine in Africa
Have coups in Burkina Faso and Mali improved security?
Russian Mercenaries: Inside the Wagner Group
World Cup: Reaction after Argentina's remarkable triumph
'Breathless, magnificent' – was World Cup final best ever?
Thai warship capsizes leaving 31 sailors missing
'Now hard to argue against Messi being football's greatest'
Elation in Argentina, sorrow in France – fans react
The agonising wait to identify the dead in Ukraine
Saying sorry for slavery leaves Dutch divided
'I quit my job rather than go back to the office'
'Polar-bear capital' warms too fast for the bears
Argentina win 2022 World Cup final – in pictures
Hat-trick to heartbreak – Mbappe denied biggest prize
The forgotten women at the heart of the Bible John mystery
The dark side of a children's classic
Asia's most beautiful train route?
The diseases soaring post-lockdown
© 2022 BBC. The BBC is not responsible for the content of external sites. Read about our approach to external linking.
