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Togo Receives US$13 Million for Private Sector Development

March 29, 2011

Project will reduce business start time and develop capacity of approximately 3,000 small enterprises 

WASHINGTON, March 29, 2011 - Togo will soon be engaged in important activities aimed at promoting private sector development. These activities will essentially focus on (i) reducing the time to start a business from 75 to 5 days in order to encourage entrepreneurship and the registration of businesses; (ii) improving the performance of micro and small enterprises to promote job creation and develop entrepreneurial abilities; and (iii) establishing a legal, regulatory, and institutional framework for public-private partnership applicable to the Free Zone and to special economic zones, to promote investment and generate economic advantages for the country.

It is with a view to facilitating the achievement of these goals that the World Bank’s Board of Executive Directors today approved a US$13 million grant (approximately CFAF 6.5 billion) for Togo, for the implementation of the Private Sector Development Support Project [Projet d’Appui au Développement du Secteur Privé PADSP], the primary objective of which is to improve the investment climate and the performance of micro and small enterprises in Togo.

In order to achieve the desired outcomes, the project will support (i) investment climate reforms; (ii) the development of entrepreneurial capacities; and (iii) the development of a new Free Zone.

  • To support investment climate reforms, the sum of US$3 million (approximately CFAF 1.5 billion) has been earmarked to improve certain important aspects of the investment climate in Togo. This primarily entails focusing on two “Doing Business” indicators, namely starting a business and registering property, which, at present, stymie business development. To be specific, this project component will (i) support the establishment and operationalization of a one-stop shop for the registration of businesses; (ii) support the establishment of a Licenses Management Center to help small businesses with their accounting; (iii) help improve the management and performance of the Land Registry [Direction des Affaires Domaniales et Cadastrales] in order to simplify and accelerate the procedures for acquiring and transferring land titles; and (iv) facilitate public-private dialogue in order to help identify and prioritize key reforms that would improve the investment climate in Togo.
  • To support the development of entrepreneurial capacities, the PADSP has earmarked the sum of US$4 million (approximately CFAF 2 billion) to provide micro and small enterprises with sufficient capacities in order to make them major sources of job creation. A total of 2,000 traditional micro and small enterprises will receive training in accounting, management, marketing, and procedures for preparing financing applications. To complement the training program, 1,000 of these enterprises will receive assistance to help them implement the training received. This component also provides support to 1,000 formal micro and small enterprises, which will receive training tailored to their needs as well as grants. In fact, in addition to the training, any Togolese enterprise (formal or traditional), operating and paying taxes in Togo, with fewer than 50 employees, and being in operation for at least 12 months, will be eligible to apply for a matching grant to finance the purchase of business development services. Business associations may also benefit from these grants. Approximately 500 grants will be provided by the project at an average of US$3,300 each.
  • To support the development of a new Free Zone (US$3 million, approximately CFAF 1.5 billion). In terms of its current structure and performance, the contribution of the Togolese Free Zone (TFZ) to the Togolese economy could be improved. The project will help the Togolese Government to develop a new Free Zone, based on international best practices. A three-phase approach has been proposed: (i) a preparatory phase, during which a number of studies will be conducted and a strategic vision defined; (ii) a second phase for the development of an agreement on the new Free Zone strategy, which also includes the institutional strengthening of the Free Zone Management Company [Société d’administration de la zone franche SAZOF]; and (iii) a strategy implementation phase, which would include technical assistance to identify potential private investors.

Today’s approval of the PADSP by the World Bank’s Board of Executive Directors, marks the culmination of the Togolese authorities’ efforts to make the private sector the real engine of economic growth in the country. The World Bank’s Country Director for Togo, Madani M. Tall, was pleased and stated: “We congratulate the Togolese team for all the efforts made to obtain this financing. The PADSP is a project that we are depending on to eliminate several obstacles and enable the private sector to fully play its role as the engine of economic growth and job creation.”
The PADSP is fully consistent with Togo’s Poverty Reduction Strategy Paper (PRSP), the second pillar of which emphasizes the consolidation of strong and sustained growth. It is also in line with the World Bank’s Interim Strategy Note for Togo, which emphasizes sectors with growth potential.

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