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.