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Togo Overview

    Context

    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%.

    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 (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.

    Economic Overview

    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.

    Development Challenges

    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

    LENDING
    Togo: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Strategy

    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 SCAPE. 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 2015, the World Bank’s portfolio in Togo amounts to nearly $300 million and comprises of 15 projects.  

    The World Bank Group has recently started the process of preparing a new strategy to support Togo’s development efforts. Preparations are currently underway to conduct a Systematic Country Diagnostic to identify the key constraints and opportunities to achieving poverty reduction and a shared prosperity.

    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 (SMEs). 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 $137.8 million.

    Multilateral Investment Guarantee Agency (MIGA)

    In 2011, MIGA issued a guarantee of $4.3 million to cover a Swiss investment in Cotecna Inspection S.A. Bureau de Liaison du Togo (COINS-Togo). This five-year guarantee provides coverage against the risks of transfer restriction, expropriation, war, civil disturbance, and breach of contract.

    World Bank Institute (WBI)

    The 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 best practices in their budget oversight.

     

    Last Updated: Apr 14, 2015

    LENDING
    Togo: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Results

    Implementing Social Safety Nets for Togo’s Vulnerable Households

    The Community Development and Safety Nets Project (mostly known as “PDC plus”) launched in July 2012 with the goal of providing poor communities with better access to basic socio-economic infrastructure and social safety nets. As of March 2015, the project has achieved important results, particularly in area of basic infrastructure where a total of 155 structures were built. These included 90 primary school buildings with 248 classrooms, 13 health centers, 44 potable water boreholes, four community latrines, two feeder roads, and two market sheds. These structures represent half of the infrastructure planned under the project.

    Through its labor intensive public works component, the Community Development and Safety Nets Project has provided nearly 10,000 temporary works (97% of the works planned) that provided financial resources to beneficiaries, of which about 43% are women. The school feeding program is also well underway in 308 schools located in very poor areas of the country, benefitting 80,000 students who receive a free lunch at school during the school year. In addition, 3,275 beneficiaries (compared to the 2,250 originally expected) benefitted from 99.3% of income generating activities planned under the project.

    Finally, the cash transfer program which is being implemented on a pilot basis in the Kara and Savanes regions, is making progress. 13,000 beneficiaries (of the 21,000 planned) from the most vulnerable households are now receiving a monthly amount of 5,000 CFA to help them bear the costs of supporting children under the age of five suffering from (or vulnerable to) malnutrition. The cash transfer program is also aimed at 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: Apr 14, 2015

    LENDING
    Togo: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Partners

    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 has prepared a new Country Strategy for the period 2011-2015. 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: Apr 14, 2015

Country Office Contacts
In Togo:
Sylvie Nenonene
Communications Officer
+229-21-30-5857

B.P. 3915
Lome, Togo

snenonene@worldbank.org
In Washington:
Katrina Sharkey
Country Program Coordinator
+1-202-473-6288

1818 H Street, NW
Washington, DC 20433

ksharkey@worldbank.org