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 6.2 million inhabitants, with a demographic growth rate of about 2.8%.
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 (Union pour la Republique or UNIR) has 62 seats; the National Alliance for Change (Alliance Nationale pour le Changement or ANC) has 19 seats; the Action Committee for Renewal (Comité d’Action pour le Renouveau or CAR) has six seats; the Union of Forces for Change (Union des Forces du Changement or UFC) has three seats; and Sursaut National has one seat.
The government, largely dominated by UNIR with the exception of three ministers from the UFC, has a policy agenda that covers four key areas: (i) intensification of actions already started in priority social sectors such as health, education, youth employment, water and sanitation; (ii) strengthening the foundations for an inclusive economic growth to advance economic governance, fiscal consolidation, and the fight against corruption; (iii) completion of institutional and constitutional reforms; and (iv) promotion of a foreign policy based on peace and solidarity. Local elections have been postponed many times, however presidential elections are now slated for April 25, 2015.
Real GDP growth reached 5.4% in 2013 and in 2014. Growth in 2014 was bolstered by strong agricultural yields, and to a lesser extent, by private investment in the secondary sector mainly consisting of small and medium size enterprises and industries. Abundant rainfall in 2014, following a drought the previous year, significantly boosted agricultural production. Inflation stood at 1.8% and 1.5% in 2013 and 2014 respectively. These low levels of inflation reflected low prices for food and imported capital goods. An initial 2014 budget projected a deficit of 3.6% of GDP—higher than 2013’s budget deficit of 1.8%. However, 2014 revenue projections were revised downward and the overall deficit is now estimated at 4.8% of GDP in 2014.
Two important economic events may have a positive impact on future economic developments in Togo. The first relates to the inauguration of a new clinker production factory (SCANTOGO, a subsidiary of Heidelberg Cement) in March 2015. The cost of the project is approximately 140 billion CFA and the project will generate 200 direct jobs and about 1,000 indirect jobs. The second event is the inauguration in April 2015 of the Lomé Container Terminal (LCT). The World Bank Group, through the International Finance Corporation (IFC), has supported LCT (a company affiliated with Mediterranean Shipping Company (MSC) to build and operate a new transshipment container handling terminal in Togo. This important infrastructure will serve as a transshipment hub for west and central African countries and is expected to provide economies of scale benefits to the country and the region while generating more than 2,500 jobs.
The business environment has improved as Togo’s business regulatory environment recorded significant improvements in the Doing Business 2015 ranking. The country gained 15 places and ranked 149th (compared to 164th in the Doing Business 2014). Togo has also made progress in privatizing state activities including an insurance company, two banks, hotels, power distribution, and port container-handling activities. The privatization of two out of four state owned banks as initially planned was completed in 2013. There is however some direct state intervention in the form of price controls in selected sectors of the economy including petroleum products, fertilizer, flour, carbonated drinks, and cement.
Poverty has declined, but it remains high at 58.7%, according to the 2011 Core Welfare Indicators Questionnaire Survey (CWIQ). Concerning the Millennium Development Goals (MDGs), Togo has achieved progress in universal primary education and the control of HIV/AIDS. However, the country will not be able to achieve six of the eight goals by 2015. Despite the important progress noted in the Doing Business 2015 report, the business climate remains challenging and efforts need to be sustained to scale up all ten indicators that include starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
To address the country’s key development challenges, the government has adopted the Strategy for Accelerated Growth and Job Promotion (SCAPE) 2013-2017, a poverty reduction strategy whose five main pillars include: (i) development of sectors with strong growth potential; (ii) strengthening of economic infrastructure; (iii) development of human capital, social safety nets, and employment; (iv) strengthening of governance; and (v) promotion of balanced, participatory, and sustainable development.
Last Updated: Apr 14, 2015