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 (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 with 59% of the votes 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.
Real GDP growth reached 5.4% in 2013 and in 2014. Growth in 2014 was bolstered by strong agricultural yields, trade activities and, to a lesser extent, by private investments in the secondary sector. The low levels of inflation in 2013 and 2014 (respectively 1.8% and 0.2%) reflected low prices for food and imported capital goods, as well as declining oil prices. Growth is projected to decrease to 5.1% in 2015 with inflation to remain at less than 2%. The initial 2015 budget projected a deficit of 5.3% of GDP, higher than the 2014 budget deficit of 5.0%. However, 2015 revenue projections are currently being revised but the overall deficit could be higher. This situation results in the difficulties in completing the operationalization of the newly created Togolese Revenue Office and in the excessive optimism of the 2015 initial revenue projections.
Togo’s business regulatory environment recorded significant improvements in the Doing Business 2015 (DB15) report compared to prior years’ rankings. The country gained 15 places in its ranking (from 164th in DB14 to 149th in DB15) and also ranked the third best reformer in the world in DB15. However these effort need to be sustained and accelerated as many DB indicators still need improvements. The government has initiated important reforms to further improve the business climate, including the preparation of a DB roadmap identifying key short term measures that could help improve the country’s performance, the revision and adoption of the new investment code to better align it with international best practices, and a new Free Zone law to strategically reposition the Free Zone.
Poverty remains widespread in Togo although national poverty rates declined from 61.7% in 2006 to 58.7% in 2011. Despite this declining trend, poverty is mostly a rural phenomenon with 73% of rural households living below the poverty line in 2011. Moreover, female-headed households experience lower poverty rates than male headed households (57% against 54% in 2011). That notwithstanding, vulnerability is higher amongst women and they seem to 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 17.4% and 8.2% were allocated to the education and health sectors respectively over the past 4 years). 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 used in the most efficient and effective manner.
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 the end of 2015. Also, despite the important progress noted in the DB15 report, the business climate remains challenging and efforts need to increase to scale up all 10 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. 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: Sep 22, 2015