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Togo: A Fourth Economic Recovery and Governance Grant

April 5, 2011

WASHINGTON, April 5, 2011 - The financial support granted to Togo would help implement the country’s economic reform agenda, and would further narrow the gap between the cost of implementing key elements of the country’s poverty reduction strategy and resources available from the Government’s own revenues and other donor support.

The World Bank’s Board of Directors today approved a grant amounting to US$28 million for the Republic of Togo to support the implementation of the Fourth Economic Recovery and Governance Grant (ERGG-4). This operation aims to support the implementation of economic governance reforms initiated under previous economic recovery operations granted respectively in 2008, 2009, and 2010. Most specifically, the ERGG-4 focuses on continuing and deepening policy reforms to improve public financial management and governance of key sectors of the economy. In this regard, the new operation would put an emphasis on two main pillars i.e.: (i) the strengthening of governance with the aim of improving budget formulation, execution and controls, and public procurement; and (ii) the consolidation of the bases for strong and sustained growth including through reforms in the phosphate, cotton and energy sectors.

The reforms supported by the new operation are critical to the Government’s ability to use public resources efficiently and effectively to support the country’s economic and social recovery. The approval of ERGG-4 is based on a set of prior actions in the following areas: 

  • Public financial management: (i) preparation of draft decrees and laws to implement the six West African Economic Monetary Union directives pertaining to public finances; (ii) publication of the 2010 quarterly budget execution reports and submission to Parliament, of the draft 2011 budget law with a medium-term expenditure framework for each of the education, health and agriculture sectors; (iii) adoption of a treasury management planning order; (iv) submission by the SOTOCO [1]’s liquidator, CEET [2] SNPT [3] and Togo Télécom of their respective 2007 and 2008 financial statements to the Court of Accounts; and (v) development and operation of the procurement website, and publication and circulation of the Procurement Newspaper.
  • Cotton sector: (i) the implementation of an analytical accounting system for new cotton company NSCT [4] which is consistent with the recommendations of the Assessment Report; and (ii) the provision of training to farmer leaders toward a better participation within the NSCT board. The objectives are to improve the financial management of NSCT, and to strengthen farmers’ representational abilities on the Board of NSCT to ensure their participation in the decision-making process.
  • Phophate sector: adoption of a detailed action plan and budget for the activities that are to be implemented under EITI [5]-Togo; the objective is to strengthen governance by improving transparency and accountability, thus contributing to greater private sector and donor confidence.
  • Energy sector: adoption of the Utility Tariffs Adjustment Order. This prior action will contribute to the improvement of the financial situation of CEET as it passes-through to the consumers the tariff adjustment that CEB [6] made in June 2009.

Upon approval of the project, Madani M. Tall, Country Director for Togo, commended the Togolese government for all the efforts made to implement the prior actions for the new budget support operation, These efforts have led to the consolidation of reforms initiated in 2008 with our first budget support operation. "We strongly believe that the ERGG-4 will help continue the implementation of the country’s reform agenda to support the economic and social recovery, and help address the institutional and economic challenges”  Tall also commended government for efforts made to achieved the HIPC Completion point, and encourage them to pursue and intensify the reforms already started, in order to fully enjoy the benefits of the debt relief, i.e. having more facility to mobilize the resources necessary to achieve growth and reduce poverty.
The program is aligned with the World Bank Interim Strategy for Togo, and also with Togo’s poverty reduction strategy. It is closely coordinated with other World Bank programs for Togo, and with the International Monetary Fund’s ECF [7] program.
The Togolese Ministry of Economy and Finance is responsible for implementing the grant, which will be released in a single tranche.

[1] Société Togolaise de Coton (former cotton company)
[2] Compagnie d’énergie électrique du Togo
[3] Société Nouvelle des Phosphates du Togo
[4] Nouvelle Société Cotonnière du Togo
[5] Extractive Industry Transparency Initiative
[6] Communauté Electrique du Bénin
[7] Extended Credit Facility

Media Contacts
In Washington
Francois Gouahinga
Tel : (202) 473 0696
In Togo
Sylvie Nenonene
Tel : (228) 223 33 00