Togo: IMF lauds reforms but says economy will restart only if political crisis is resolved
Wednesday, 11 April 2018 16:19 
(Togo First) - Last Tuesday, the International Monetary Fund lauded reforms initiated by Togo’s government, saying it disburse in the coming months another tranche of its 3-year loan to the country. This tranche amounts to $241 million.
In Togo since last March 27, the IMF delegation led by Ivohasina Razafimahefa has deeply assessed reforms undertaken by the Togolese government in the framework of the extended credit facility (ECF) approved in May 2017.
“Results falling in the framework of the three-year program were good. All quantitative performance criteria at the end of December 2017 were met. Similarly, all structural benchmarks were reached,” the delegation concluded.
“Budget goals regarding internal primary balance and internal financing were met by far,” it added.
Economy’s restart depends on crisis end
However, the Fund noted that economic activity in Togo has slowed in H2 2017, due to the sociopolitical crisis that the nation has been experiencing since August, that year. This caused growth to fall to 4.4% this year, from 5.1% in 2017.
Actually, IMF’s delegation leader said economic growth should near 5% in 2018 and stand close to that figure in the long term. By 2020, Togo’s economy should fully restart with growth expected to reach 5.2%. Of course, this is subject to a successful dialogue between Togolese political actors. “Socio-political tensions represent a risk for economic growth and could negatively impact real economy and tax earnings,” the mission’s head intimated.
According to him, looking at its exports, Togo’s economy should strengthen further but for now, political unrest still threatens that.
Public debt slumps
According to IMF, public debt, State firms’ debts and arrears which made up 82% of GDP at the end of 2016, reduced to 77% of GDP at the end of 2017.
This is one of the best performances worldwide, Ivohasina Razafimahefa said. This improvement was spurred by a good control of budget expenditures, despite tax collection being less satisfying than expected.
No budget cuts
In order to keep afloat amid the persistent crisis that impairs results of OTR, the agency in charge of collecting tax and customs revenues, Togo’s government plans to amend 2018 budget which exceeds CFA1,320 billion. In addition, authorities aim to diversify the tax base. In this regard, a land tax reform supported by IMF is being prepared at OTR. And while this suggested some budget cuts, the minister of finance reassured, indicating that the move is just a simple harmonization and rationalization process, and in no way would involve budget cuts.
Fiacre E. Kakpo
REFORMS OVERVIEW
STARTING A BUSINESS (more info)
At the fifteenth position, worldwide, and first in Africa, under the Starting a Business index of the 2020 Doing Business ranking, Togo sustains its reformative dynamics with more reforms….
ENFORCING CONTRACTS (more info)
Compared to some years ago when it was one of the lowest rankers under the Doing Business’ Enforcing Contracts indicator, Togo, leveraging many efforts to improve its business climate, was able to jump significantly on the index in the recent years... .
CONTRACT EXECUTION (more info)
Creation of special chambers of commerce for small debts • Creation of chambers of commerce at the Court of Appeal • Civil and commercial cases now handled by distinct clerks • Establishment of commercial courts in Lomé and Kara • Lawyers and bailiffs now have access to the FORSETI COMMERCIAL platform • A maximum period of 100 days was fixed to settle a commercial dispute .
TRADING ACROSS BORDERS (more info)
In comparison to previous years,Togo has significantly improved its ranking under the“Trading across borders” indicator by adopting multiple reforms that focus mainly on the digitization and reduction in delays, for import and export procedures related to import and export.
In comparison to previous years, Togo has significantly improved its ranking on the “Trading across borders” index by adopting multiple reforms that focus mainly on the digitalization and reduction in delays, for import and export procedures related to import and export.
CONSTRUCTION PERMIT (more info)
After moving from the 133rd to 127th place under the 2020 Doing Business’ construction permit index, Togo intends to reiterate this feat in the coming edition of the global ranking. To this end, it has introduced this year multiple reforms.
GETTING ELECTRICITY (more info)
Over the past two years, Togo’s ranking under the Doing Business’ Getting electricity and water indicator has increased consistently. Owing this performance to multiple reforms aimed at making it easier for businesses to access power and water, Lomé plans to introduce even more reforms this year to keep up its improvements.
REGISTERING A PROPERTY (more info)
Out of all the 'Doing Business’ indicators, Property Registration is where Togo has improved the most since 2018. Indeed, after spending years in the lowest part of this ranking, the country now seeks to beat Rwanda which is the best performer on this index in Africa. To do so, Lomé has been introducing many reforms, with the latest batch implemented this year.
PUBLIC PROCUREMENT (more info)
From professionalization to digitization, through legislative regulations, Togo’s public procurement framework is constantly being modernized. Several reforms have been implemented to improve the sector much to the benefit of the private sector, which is the focus of the National Development Plan.
PAYING TAXES AND DUTIES (more info)
To improve its business environment, Togo introduced some important reforms related to the payment of tax and duties. From the replacement of some taxes to the cancellation of others through exemptions, the country has only one objective: offer the most attractive tax framework to investors and economic operators. To achieve this, the authorities relied on digitization.
