Ghana, which has received a $3 billion International Monetary Fund (IMF) support package, is currently in the midst of its inaugural program evaluation, scheduled to wrap up by November, according to the Managing Director of the IMF, Kristalina Georgieva.

During a comprehensive interview, Georgieva expressed her positive outlook regarding Ghana's economic advancements, highlighting a significant upturn in the country's financial situation in the past month.

Additionally, in her discussion, Kristalina Georgieva commented on the progress being made by Zambia and Ghana, both of which have experienced debt defaults, within their respective IMF programs.

She also noted that while Tunisia doesn't require a restructuring at this point, the country should take prompt actions to strengthen its economy.

“Ghana is doing actually quite well. You have seen that their position has improved over the last month, the economy is in a much better place.

"I would very much hope that we can have the disbursement,” she said referring to a $600 million tranche of IMF money that’s due to be disbursed in November.

“That is part of the confidence building that we are projecting,” she said regarding Ghana's economic stability.

In her broader comments, Georgieva underscored the importance of tackling unsustainable debt crises as a "high-priority" issue.

She offered a defense of the G20 Common Framework for debt resolution, even in the face of criticism regarding its perceived slow response in providing relief to eligible nations.

Georgieva noted that as more countries seek assistance, the process has become more streamlined, with Chad, Zambia, Sri Lanka, and Ghana all showcasing shorter timeframes for achieving progress.

She highlighted specific examples, noting that Chad took 11 months from the initial staff-level agreement to financial assurances, Zambia accomplished this in nine months, Sri Lanka in six months, and Ghana in just five months.

“I hear lots of people saying, oh this doesn’t work,” she said.

“My question to them is, ok, you forget about it. What do you have instead?”

In the meantime, the IMF Managing Director emphasized that Egypt's precious reserves will continue to dwindle unless the country opts for another currency devaluation. She commended other measures that Egypt, the IMF's second-largest borrower, has taken to address its struggling economy.

Since early 2022, Egypt has devalued its currency three times, resulting in a nearly 50% depreciation against the US dollar.

Georgieva argued that delaying another devaluation is only postponing the inevitable, and the longer Egypt refrains from taking this step, the more challenging the situation will become.

“The sooner we can reach an agreement on the road map for this the better,” she said.

“The issue here is very simple. Egypt would bleed reserves protecting the pound and neither the country nor overall the environment is such that this is desirable. That’s a problem that has to be solved.”

Egypt's net international reserves experienced a decline last year, reaching their lowest point since 2017, before showing signs of stability in recent months and reaching $35 billion in September. However, this figure remains more than one-fifth lower than its peak in 2020.

The decision to maintain the stability of the Egyptian pound has come at a cost, as it has led to a depletion of foreign exchange in the economy through a reduction in commercial banks' net foreign assets. In August, these assets shrank by over 5%, reaching $13.1 billion, as calculated by HC Research based in Cairo.

Nevertheless, Kristalina Georgieva mentioned that progress is being made in the IMF's assessment under Egypt's $3 billion rescue program.

“In the last couple of days there have been some constructive engagements,” the IMF head said ahead of a speech she made in Abidjan, Ivory Coast.

“There will be more systematic work of our team with Egypt. So stay tuned. Let’s see what would come out in the next weeks.”

Egypt’s long-term foreign debt rating was downgraded late Thursday by Moody’s to Caa1 from B3, seven levels into junk.

The ratings agency cited the government’s “worsening debt affordability trend and the persistence of foreign currency shortages in the face of increasing external debt service payments over the next two years.”

The economic situation in Tunisia, another North African country facing challenges, is not as severe as some others, but it still requires immediate attention to finalize the agreements related to a $1.9 billion rescue package from the IMF, according to Georgieva.

A debt restructuring is not required as “they are not yet hanging at the cliff,” she said.

Nevertheless “the sooner the country takes some measures to strengthen their fiscal position, to strengthen their overall economic performance the better.”

Egypt and Tunisia are grappling with some of the highest bond yields globally, highlighting investor caution towards holding their debt. Egypt's dollar notes yield an average of 18.5%, as per Bloomberg indexes, while a Tunisian bond maturing in 2025 is trading at a yield of over 40%.

Moving to the southern part of the continent, Zambia and Ghana, both countries that have experienced debt defaults, are in line to receive additional support, as stated by Georgieva.

She noted that a memorandum of understanding with Zambia's bilateral creditors has been tentatively agreed upon and will be signed once a few remaining details are resolved.

Additionally, in recognition of the challenges faced by many of the world's poorest nations in repaying debt, Georgieva expressed her support for the concept of suspending debt payments when countries are hit by climate-related disasters.

“I’m very much in favour of including clauses in debt, be it bonds or loans, that put debt service suspension in place. So if a natural disaster happens, the country is not forced to choose between saving lives and paying creditors,” she said.

“We all need to think about how we go about debt service in a world of more frequent and devastating climate disasters.”