Overview

Togo is a Sub-Saharan West African country that shares borders with Ghana to the west, Burkina Faso to the north, and Benin to the east. It has an estimated population of 7.3 million inhabitants, with a demographic growth rate of about 3%.

Political Context

Togo’s political landscape is dominated by the five following main parties, all of which have seats in the parliament: the presidential party, Union for the Republic (UNIR) has 62 seats; the National Alliance for Change (ANC) has 19 seats; the Action Committee for Renewal (CAR) has six seats; the Union of Forces for Change (UFC) has three seats; and Sursaut National has one seat.

On April 25, 2015, President Faure Gnassingbe was re-elected for a third five-year term. Jean-Pierre Fabre, the leading candidate of the opposition, obtained 35% of the votes. The new government formed in June 2015 counts 24 ministers and is led by a new Prime Minister, Komi Selom Klassou.

Economic Overview

Togo’s economy has been growing at an average rate of about 5% over the past five years. Growth in 2015 is estimated to have reached 5.5% and is projected at 5.4% in 2016. The major growth contributor in 2015 was the secondary sector (2%) due to the performance of extractives and manufacturing industries, followed by the service sector (2%) resulting from increased trading volumes at the Lomé sea port and the Lomé International Airport.  Growth has also been significant but volatile in agriculture, ranging between 0% in 2013, to 14% in 2014, and 2% in 2015 year on year. The building and public works sector comprises only 7% of the GDP, but the rate of growth has been highest in this sector attaining 15.5% in 2015. Growth is projected to be sustained at a moderate rate over the next three years due to continuous government investment in infrastructure. Inflation remained under control at 1.8% in 2015 and will certainly remain below the 3% West African Economic and Monetary Union (WAEMU) threshold in 2016. On the external front, a more than proportionate increase in exports compared to imports is expected to reduce the current account deficit from -10.1% in 2015 to -9.8% in 2016.

Togo’s business regulatory environment recorded improvements in the Doing Business (DB) 2016 (ranked 150th) compared to prior years’ rankings. The country has made starting a business easier by enabling the one-stop shop to publish notices of incorporation and eliminating the requirement to obtain an economic operator card. The government has initiated important reforms, including the preparation of a Doing Business roadmap, identifying key short term measures to improve Togo’s performance, the revision and adoption of the new investment code to better align it with international best practices, and the new Free Zone law to strategically reposition the Free Zone. Togo has also made progress in privatizing state activities including an insurance company, two banks, hotels, power distribution, and port container-handling activities.

Social Context

Poverty remains widespread in Togo although national poverty rates declined from 59% in 2011 to 55% in 2015. Despite this declining trend, poverty is mostly a rural phenomenon with 69% of rural households living below the poverty line in 2015. Moreover, female-headed households experience higher poverty rates than male headed households (57.5% against 55% in 2015). Also, vulnerability is higher amongst women and they suffer from lack of economic opportunities and are equally underrepresented in high-level decision making positions. The education and health sectors represent a significant share of annual public spending (an average of 14% and 7% were allocated to the education and health sectors respectively from 2009 to 2014). However, more needs to be done to make sure that high level regional disparities in resource allocation are narrowed and the resources allocated to these two sectors are increased and used in the most efficient and effective manner.

Development Challenges

Togo needs to increase efforts in terms of achieving the seventeen Sustainable Development Goals (SDGs) given that the country was not able to achieve six of the eight Millennium Development Goals (MDGs). At the end of 2015, Togo had registered progress only in universal primary education and the control of HIV/AIDS. Also, despite the important progress noted in the 2015 and 2016 Doing Business reports, the business climate remains challenging and efforts need to be done to scale up all 10 Doing Business indicators, namely: starting a business, dealing with construction permits, access to electricity, registering property, access to credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Overall, the key development challenges for Togo as stated in the country’s poverty reduction strategy include: (i) developing sectors with strong growth potential; (ii) strengthening economic infrastructure; (iii) developing human capital, social safety nets, and employment; (iv) strengthening governance; and (v) promoting a more balanced, participatory, and sustainable development.

Last Updated: Oct 11, 2016

World Bank Group Engagement in Togo

The World Bank's second Interim Strategy Note (ISN-2) for Togo approved in 2012 is aligned with three of the five pillars of the Accelerated Growth and Employment Creation Strategy (more commonly known by the French acronym SCAPE or Stratégie de Croissance Accélérée et de Promotion de l’Emploi). ISN-2 is outlined so as to strengthen economic recovery and promote sustainable development, improve economic governance and state capacity, and address poverty reduction along with urgent social needs. As of March 2016, the World Bank’s portfolio in Togo amounts to over $300 million and comprises of 14 active projects.

The World Bank Group has recently started the process of preparing a new strategy to support Togo’s development efforts. This includes launching the preparation of a Systematic Country Diagnostic (SCD) to identify the key constraints and opportunities to achieving poverty reduction and a shared prosperity. The SCD will provide the diagnostic basis for a Country Partnership Framework to be defined later this year in consultation with the government and other stakeholders.

International Finance Corporation (IFC)

The IFC strategy in Togo is centered on projects in agribusiness, infrastructure, and manufacturing. It seeks to forge partnerships with local banks in order to foster joint ventures aimed at supporting these projects with local currency financing. The IFC is also developing financial products to support the microfinance sector and small and medium enterprises. It likewise supports investment climate improvement by providing technical assistance to the government for the implementation of reforms aimed at facilitating private investment. The IFC’s total committed portfolio for Togo is around $138 million.

Last Updated: Oct 11, 2016

Social Protection and Social Safety Nets

The $26.1 million Community Development and Safety Nets Project launched in July 2012 provides poor communities with better access to basic socio-economic infrastructure and social safety nets. The project is achieving important results, some of which have exceeded initial targets. In the area of basic infrastructure, a total of 200 structures were built. These included 325 primary school classrooms, 19 health centers, and 63 potable water boreholes. In addition, the project built about 159 complementary infrastructures including latrines, incinerators alongside schools and health posts, and also feeder roads and market sheds. A new wave of community sub-projects is currently underway with the goal of exceeding the overall project target of 320 community infrastructures.

Through its labor intensive public works component, the project supported 152 labor-intensive works projects which provided temporary income generating opportunities to 12,590 beneficiaries (of which about 40% are female), thus exceeding the end of project target of 10,000 beneficiaries. Given the success of this program, possibilities are being explored for additional training activities for the beneficiaries in order to increase the sustained impact of the program.  

With IDA and government resources, the school feeding program is being pursued in 308 schools located in very poor areas of the country, benefitting about 80,000 students who receive a free lunch at school during the school year. In addition, more than 5,000 beneficiaries (against 2,250 initially expected) benefitted from the income generating activities planned under the project.

As for the cash transfer program being implemented on a pilot basis in the Kara and Savanes regions, 14,016 beneficiaries (of the 21,500 planned) from the most vulnerable households are receiving a monthly amount of 5,000 FCFA to help them bear the costs of supporting under-five children suffering from severe malnutrition. Supported by the Government of Japan, the Government of Togo, and IDA, the program is also reinforcing human capital through soft conditionalities, such as having birth certificates for children, attending training and growth monitoring sessions, and schooling older siblings.

Last Updated: Oct 11, 2016

Since donor re-engagement in 2007, external financial assistance has gradually increased. The European Union has increased its financial and technical support to the country, and the African Development Bank prepared and implemented a Country Strategy over the period 2011-2015 (a new AfDB strategy is currently under preparation and should be finalized by June 2016). 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, sectorial aid coordination committees have been formed under a government initiative.

Last Updated: Oct 11, 2016


LENDING

Togo: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments