Togo lies sandwiched between Ghana and Benin—a long, thin sliver of territory running
President Faure Gnassingbe was re-elected in 2015 for a third, five-year term: his government, led by Prime Minister Komi Selom
Togo’s economic growth decelerated in 2017, a reflection of political tensions and fiscal consolidation, slowing to an estimated 4.4% from 5.1% in 2016—its growth rate
Inflation in Togo has remained under control, averaging -0.7% in 2017 thanks to the prudent monetary policy followed by members of the Central Bank of West African States (BCEAO), and low food prices. But higher food and beverage prices pushed inflation back into positive territory at 0.4% in August 2018. Due to a fall in capital goods’ imports and robust exports, the external current account deficit dropped from 11.1% of GDP in 2015 to 9.3% in 2016 and 8.2% in 2017. The internal public deficit, though, remained large—reflecting the undiversified nature of Togo’s economy; it was financed by non-concessional government borrowing from local banks and Foreign Direct Investment. Following an IMF-extended credit facility, approved in May 2017 to restore fiscal sustainability while protecting social sectors, the government initiated a fiscal consolidation program that allowed a reduction in the public debt-to-GDP ratio from a peak of 81.6% in 2016 to 75.7% in 2017. The fiscal deficit narrowed from 9.6% of GDP in 2016 to 0.3% in 2017.
Poverty remains widespread, though poverty rates declined from 61.7% to 55.1% between 2006 and 2015 and were estimated at 47.4% in 2017. Poverty in Togo is mostly a rural phenomenon, with 69% of rural households living below the poverty line in 2015. Female-headed households experience higher rates of poverty than male-headed households—57.5% against 55%. (Vulnerability is higher among women because they have fewer economic opportunities and are underrepresented at high levels of decision making.)
Togo’s education and health sectors represent a significant share of its annual public spending, with an average of 14% and 7% allocated respectively to each of them from 2009 to 2014. More needs to be done, however, to make sure that regional disparities in resource allocation are narrowed and the resources allocated are increased and used in an efficient, effective way.
Togo needs to strive hard to reach the 17, global Sustainable Development Goals by 2030; it had made progress on only 6 of the 8 Millennium Development Goals by 2015. And, despite the economic progress noted by the World Bank’s 2016 and 2017 Doing Business reports, its business climate remains challenging, and more needs to be done for business indicators to improve. Its key development challenges (as stated in its five-year National Development Plan 2018–2022) include: developing sectors with strong growth potential, including agribusiness; strengthening economic infrastructure; developing human capital, social safety nets, and youth employment; strengthening governance; strengthening basic social services in health, water, and power; promoting financial inclusion, gender equity, and social and environmental protection; and promoting more balanced, participatory, and sustainable development.
Last Updated: Nov 16, 2018