Togo has an estimated population of 6.2 million, with a demographic growth rate of about 2.8%. Real economic growth accelerated in 2012 to 5.9%, from 4.8 percent in 2011, reflecting dynamism in agriculture, mining, and construction. Growth is expected to decelerate slightly in 2013 to about 5.5% as a result of unfavorable weather and weakening mining activity. However, growth is expected to rebound to about 6% on average over the next three years on account of agricultural and export performance. Inflation in 2012 was low and averaged 2.6%, and the outlook is stable. The external current account balance deficit in 2012 is estimated at 11.8% of GDP, but is projected to decline over the medium term.
The pace of structural reforms slowed significantly since the attainment of the completion point of the Highly-Indebted Poor Country initiative (HIPC), and public debt management weakened. Two banks (out of four) were privatized successfully, and reforms in mining and energy sectors have advanced slowly. The reform of the telecommunications sector had a favorable impact on growth in 2012. In June 2012, Togo connected to the WACS submarine cable, thereby gaining direct access to the world fiber optics network. The cost of telephone calls was reduced from $0.23 per minute in 2011 to $0.18 per minute in 2012, and the cost of Internet access also fell significantly (36%). Government’s fiscal policies aim at significantly increasing revenue mobilization to finance much needed infrastructure and social needs, and revenue collections are expected to improve on the basis of operational reforms which should be facilitated by the establishment of the “Office Togolais des Recettes” (OTR).
An International Monetary Fund (IMF) mission to Togo during August-September 2013 under the Article IV consultation reached a staff-level agreement with the authorities on an economic program that could be supported by a three-year arrangement under the Extended Credit Facility totaling about US$80 million (about CFAF 41 billion). The agreement is subject to review by IMF Management and approval by the IMF Executive Board.
Parliamentary elections were held in July and a new Parliament is operational since early September 2013. Four parties have seats in the new Parliament: the presidential party UNIR (62 seats), the "Collectif Sauvons le Togo" (19 seats), the "Coalition Arc-en-Ciel" (6 seats), Gilchrist Olympio's UFC (3 seats), and Sursaut National (1 seat). After the elections, Prime Minister Ahoomey-Zunu was re-appointed by the President and subsequently formed a new Cabinet, with 27 members (versus 32 previously). The new government is largely dominated by UNIR, and includes 3 ministers from the UFC. The new government policy agenda covers four key areas: (i) intensification of actions already started in priority social sectors (health, education, youth employment, water and sanitation); (ii) strengthening the foundations for an inclusive economic growth (economic governance, fiscal consolidation, fight against corruption, etc.); (iii) completion of institutional and constitutional reforms; and (iv) promotion of a foreign policy based on peace and solidarity.
Togo made considerable progress during the past few years, but significant institutional and economic challenges remain. Poverty has declined, but it remains high (58.7% in 2011). As for the Millennium Development Goals (MDG), Togo has achieved progress in universal primary education and the control of HIV/AIDS. However, the country won’t be able to achieve 6 of the 8 goals by 2015. As pointed out in the 2013 edition of the World Bank report Doing Business, which ranks Togo 156th out of 185 countries, the business climate remains challenging despite progress made on some key indicators (mainly on starting a business).
The recently appointed government-adopted poverty reduction strategy ("Strategy for accelerated growth and job promotion – SCAPE”) includes five main pillars: (i) development of sectors with strong growth potential; (ii) strengthening of economic infrastructure; (iii) development of human capital, the social safety net, and employment; (iv) strengthening of governance; and (v) promotion of balanced, participatory, and sustainable development. This document suggests ways to address Togo’s main development challenges during the period 2013 to 2017.
Last Updated: Sep 30, 2013
The World Bank's Interim Strategy Note (ISN) for Togo was approved by its Board in January 2012 and covers the period 2012-2013. This strategy is aligned with three of the four pillars defined in Togo's poverty reduction strategy (SCAPE). The ISN-2 is outlined so as to: (i) strengthen economic recovery and promoting sustainable development, (ii) improve economic governance and State capacity, and (iii) address poverty reduction and urgent social needs. As of September 30, 2013, the World Bank portfolio in Togo amounted to more than US$300 million and covers the sectors of agriculture, education, environment, infrastructure, private sector development, telecommunications, community development and social protection, and budget support. New operations are currently under preparation in the fields of health and energy.
International Finance Corporation (IFC)
The IFC strategy in Togo is to (i) develop projects in sectors such as agribusiness, infrastructure, and manufacturing; (ii) forge partnerships with local banks to foster joint ventures aimed at supporting these projects with local currency financing, and developing micro and SME finance products to support the microfinance and SME sectors; and (iii) support investment climate improvement by providing technical assistance to the Government for the implementation of reforms aimed at facilitating private investment. IFC’s total committed portfolio for Togo as of August 2011 was US$137.8 million.
Multilateral Investment Guarantee Agency (MIGA)
In 2011, MIGA issued a guarantee of US$4.3 million to cover a Swiss investment in Cotecna Inspection S.A. Bureau de Liaison du Togo (COINS-Togo). This coverage is for five years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract.
World Bank Institute (WBI)
WBI assisted Togo in the context of its parliamentary program, which supports the West Africa Association of Parliamentary Public Accounts Committees (WAAPPAC) with South-South knowledge exchanges among its members in Ghana, Liberia, and Sierra Leone. Togo became a member of WAAPPAC in 2011 and participated in knowledge exchange dialogues with other members on how parliamentary finance committees can adopt international good practice in their budget oversight.
Last Updated: Sep 30, 2013
Universal primary schooling and improvement of educational services
The Education and Institutional Strengthening Project (PERI), financed by the Global Partnership for Education (US$45 million) and implemented under the World Bank’s supervision, supports Togo in (i) the construction of 815 primary school classrooms, 611 in rural areas and 204 in urban areas; (ii) the building of three teacher training schools; (iii) the subsidy of eligible schools; (iv) the provision of textbooks and primary school curriculum guides; and (v) the building of community capacities to implement the school construction strategy, and the training of staff of the ministry in charge of primary education to carry out the sectoral education plan. To date, all 48 classrooms planned for the pilot phase of the project have been completed in the rural areas and have been fitted out with the necessary infrastructure (a block of six latrines, separated for girls and boys; principal’s office; storage rooms). These classrooms are equipped with student desks and the necessary teaching materials.
The building of these classrooms was directed and supervised by the local communities themselves (through primary school management committees (COGEP)), which have received the necessary training to carry out this task. As this work moves forward, agreements have already been signed with 116 COGEP for a total of more than CFAF 3 billion with the aim of building 348 additional classrooms in rural areas. Classroom construction works have also started in urban areas, and work is in progress regarding the building of the 3 teachers’ training school (“École normale d’instituteurs”). To improve the quality of teaching, nearly 3 million textbooks and teachers’ guides have been purchased and made available to pupils and teachers in public primary and locally initiated schools throughout the country. Moreover, in the last two school years (2011-2012 and 2012-2013), allocations for subsidies amounting to nearly CFAF 1.8 billion have been provided to targeted schools to help them cover eligible operating expenses.
Modernization along the Abidjan-Lagos Corridor
In Togo, public works are now being completed under the Abidjan-Lagos Trade and Transport Facilitation Project (ALTTFP) and have significantly altered the appearance of the city of Aného, the primary beneficiary of these works. In terms of road infrastructure, ALTTFP has made it possible to widen the national road “Inter-Etat No. 2,” which runs from the entrance to the city to the border with Benin (about 9 km). The project also financed the rehabilitation, expansion, and cleanup of a motorway within the city, thereby providing a definitive solution to the problem of flooding in several neighborhoods.
The project also supported the widening of the only existing bridge in order to ease the flow of traffic. In addition to these road works, ALTTFP has also financed (i) the building of a parking lot for nearly 200 heavy trucks to prevent the traffic jams caused by these vehicles on the border; (ii) rehabilitation of the frontier bus station to improve its efficiency; (iii) the building of a trading platform on the border to shield vendors from accidents and keep them from blocking the road; and (iv) the building of a new customs warehouse (Magasin d’Ecor). The project took the necessary steps to appropriately compensate all persons affected by these works.
Efforts are continuing on another important facet of the project, known as “Facilitation of trade and reduction of barriers along the Corridor,” with the following objectives: (i) to reduce the time that goods are kept at the port of Lomé; (ii) to train persons involved in the transport chain; (iii) to support the customs modernization plan; (iv) to review procedures; (v) to support the creation of a single window for foreign trade; and (vi) to support the establishment of juxtaposed border posts.
Last Updated: Sep 30, 2013
Since donor reengagement in 2007, external financial assistance has gradually increased. The European Union has scheduled a disbursement of 123 million euros for the period 2008-2013, including 7 million euros of budget support per year. The African Development Bank prepared a new Country Strategy for the period 2011-2015, including a total of US$15 million for annual budget support. Bilateral partners (including France, Germany, the United States, and China) are also increasing their support for Togo’s development. In order to channel this growing aid more effectively, sectoral aid coordination committees have been formed under the initiative of the Government.