Located on Africa’s west coast, Togo is bordered by Ghana, Benin, and Burkina Faso and is home to approximately 8.5 million people. The poverty level is twice as high in rural areas (58.8%) as in urban areas (26.5%).
This is due in large measure to concentrated economic growth in the modern sectors and limited access to quality services. Poverty is higher in female-headed households (45.7%) than in male-headed households (45.2%). Women remain more vulnerable, as they have less access to economic opportunities, education, health, and other basic socioeconomic facilities.
Togo’s score on the human capital index (HCI) is 0.43. This means that children born in Togo today will be only 43% as productive when they grow up as they could be if they had access to good health, education, and nutrition.
Political Context
The ruling Union pour la République (UNIR) party has dominated the political scene for several years and won 59 of the 91 seats in the National Assembly in the 2018 elections. Victory in the presidential elections held on February 22, 2020, returned Faure Gnassingbé to power for a fourth five-year term as Head of State.
On September 28, 2020, Victoire Tomégah-Dogbé was appointed prime minister, the first woman to hold this office in Togo. Togo held municipal elections in June 2019 for the first time in 32 years, and the UNIR secured 878 of 1,490 seats.
Economic Overview
After a post-COVID rebound in 2021, growth slowed in 2022 owing to war-related disruptions in Ukraine, leading to lower export earnings and an increase in the cost of living that was only partially offset by increased government spending. A sharp increase in food and energy prices pushed headline inflation to a 20-year high of 7.5% in 2022, contributing to a significant slowdown in consumer spending. Rising energy and fertilizer costs have also had a negative impact on the agriculture sector. In this context, extreme poverty has increased to 30.6% nationally and 45.9% in rural areas.
Rising inflation and insecurity in the Savannah region have led the government to implement emergency spending in a revised 2022 budget, including higher subsidies for fertilizers and fuel, tax exemptions, wage and pension increases in the public sector, amounting to 1.3% of GDP, and new investment spending for security purposes amounting to 2% of GDP. These emergency measures contributed to an increase in the fiscal deficit to 8.3% of GDP in 2022, up from 4.8% in 2021. Public debt also increased from 63.6% of GDP in 2021 to 68% of GDP in 2022.
Growth is projected to stabilize at 4.9% in 2023. With the global economy recovering in 2024-25, growth is also expected to strengthen in Togo, reaching 5.3% in 2024 and 5.5% in 2025. However, fiscal consolidation measures and tighter financing conditions will dampen domestic demand. While extreme poverty is expected to remain high at 30.7% in 2023, it is projected to gradually decrease to 30.1% in 2024 and 29.5% in 2025 thanks to moderating inflation and the recovery of agricultural production.
The government’s fiscal consolidation plan, which includes reduced investment spending and increased revenue mobilization, is expected to narrow the deficit to 4.5% of GDP in 2025, which is still above the WAEMU convergence criterion of 3%. While external debt distress risks are moderate, high domestic debt, continued refinancing pressures, and tighter global financing conditions are a source of vulnerability. Downside risks to the outlook also stem from regional security threats.
Last Updated: Mar 31, 2023
