Currency and Capital: Managing Exposure in the Region
Three currency regimes, three IMF postures, and why 'North Africa' is no longer one macroeconomic story.
For firms and investors operating across North Africa, currency and capital account risk is not a background variable. It is the central variable. Exchange rate regimes differ from one border to the next, capital controls are calibrated to political calendars, and IMF programmes shape the fiscal envelope in ways that ripple through pricing, dividend repatriation, and cross border settlement. In 2026, the region is at a moment of unusual divergence, and treating "the Maghreb" or "North Africa" as a single macroeconomic space is a strategic error.
Three currency regimes, three postures
The region's three largest economies operate under structurally different exchange rate arrangements.
Egypt completed one of the most consequential devaluations of the past decade. In March 2024, the Egyptian pound was allowed to depreciate sharply against the dollar as a condition of the IMF's Extended Fund Facility. In February 2026, the IMF Executive Board completed the fifth and sixth reviews under Egypt's Extended Arrangement and the first review under the Resilience and Sustainability Arrangement (IMF). The path is now more predictable, but the pound remains volatile relative to regional peers, and the country is still in active programme conditionality.
Morocco has been on a gradual widening of its dirham trading band since 2018, moving cautiously toward greater flexibility while maintaining a de facto basket peg. The IMF completed the 2026 Article IV consultation mission with Morocco in February 2026, and separately reviewed a medium term of the country's Flexible Credit Line arrangement a facility available only to countries the Fund judges to have very strong fundamentals (IMF Article IV, IMF FCL). The dirham is the region's most stable currency and its most policy managed.
Tunisia occupies a different position. The dinar operates under a de facto managed float. The country has been in extended discussions with the IMF over a follow up programme, but political dynamics have repeatedly delayed conclusion. In practical terms this means the dinar carries structural depreciation pressure, foreign currency liquidity for corporates remains constrained, and dividend repatriation is subject to case by case central bank authorization.
Algeria operates a heavily managed dinar with limited convertibility. Libya operates under a divided monetary authority that reflects the country's political division. Both should be planned around, not planned in.
The IMF programme as the underlying variable
For firms with regional exposure, IMF programmes are the single most useful signal of near term macroeconomic direction. Two dynamics are visible in 2026.
Egypt is stabilizing but tight. The completion of the fifth and sixth reviews unlocked significant disbursement and confirms that programme conditionality remains binding. Fiscal consolidation continues. Corporate exposure to Egypt should assume continued subsidy reform, further gradual currency adjustment, and elevated funding costs. The upside is that policy predictability is now higher than at any point in the past five years.
Morocco is being rewarded for restraint. The Flexible Credit Line arrangement is essentially an IMF endorsement of macroeconomic policy quality. Morocco is also the announced host of the 2026 IMF MENA Research Conference at Mohammed VI Polytechnic University in Rabat on June 29 to 30 (Stimson Center). The signal to investors is unambiguous. For firms deciding where to headquarter a regional treasury function, this matters.
Tunisia is unresolved. The absence of an IMF programme is a policy choice with real costs higher sovereign borrowing spreads, constrained corporate access to hard currency, and dependence on domestic bank financing that crowds out private credit. This is not a sustainable equilibrium, and firms should plan for either a programme conclusion within 12 to 18 months, or a further period of tight foreign exchange availability.
Capital and infrastructure flows
The scale of announced infrastructure investment across the region has few historical parallels. Egypt announced a $500 billion financing plan for 300 infrastructure and development projects across Africa, and separately committed $4 billion to oil refinery upgrades (Stimson Center). These are announced envelopes, not disbursed capital, and the gap between announcement and execution is historically wide. But the direction is real. Egypt is positioning itself as a continental capital exporter, not only a recipient.
Morocco's story is quieter but more institutionalized. Maroc Telecom's $760 million profit for 2025 illustrates the depth of the country's corporate sector, which now regularly outperforms regional peers on returns and governance (Stimson Center).
What this means for treasurers and CFOs
Three practical implications for firms with regional exposure.
First, natural hedging is undervalued. Firms with revenue and cost streams denominated in the same local currency retain optionality. Firms with dollar or euro revenue against local currency cost bases face translation losses that can wipe out operating margin. Structural currency mismatches should be surfaced at board level, not managed only in the finance function.
Second, sovereign risk premia are diverging faster than the market prices them. The gap between Moroccan and Tunisian sovereign spreads is unlikely to narrow in the short term. Corporates with Tunisia exposure should model funding at higher spreads than the current benchmark suggests, and should not assume synchronous regional recoveries.
Third, cross border cash pooling is harder than it looks. Regional cash management structures that work elegantly on paper regularly stall at central bank approval stages. Testing pooling arrangements in advance of stress events, not during them, is prudent.
The takeaway
North Africa in 2026 is not one macroeconomic story. It is three or four, depending on how one counts Libya. The most consequential planning error a firm can make is to treat regional exposure as uniform. The second most consequential is to underweight the signal value of IMF programme status. Both are avoidable with disciplined monitoring and honest scenario work.
That is the discipline Women in C.R.C is built to help institutionalize.
About this paper. This is a working paper. Comments and corrections to info@carthage-consulting.com. Cite as: Women in C.R.C, "Currency and Capital: Managing Exposure in the Region", C.R.C Editorial, September 2026.