Togo: Government decides to “prioritize spending” amid global market financing hurdles

Economic governance
Thursday, 25 May 2023 14:31
Togo: Government decides to “prioritize spending” amid global market financing hurdles

(Togo First) - Amidst the increasing scarcity and costliness of international market financing, Togo is set to “prioritize spending” for the current year. As declared at the most recent Ministerial Council held on May 25, the country plans to enact a rectifying finance bill to manage its financial resources more effectively.

The Council acknowledged the challenges posed by the tightening of global lending conditions. It noted that “key central banks such as the U.S. Federal Reserve, the European Central Bank, and the Central Bank of West African States have introduced stricter monetary policies, which made securing funding from financial markets harder.”

Togo's financial plans for 2023 included raising CFA574 billion from the West African Economic and Monetary Union (WAEMU) market. However, like many of its neighbors, the country was unable to meet its funding targets earlier this year. This shortfall prompted some Togolese officials to appeal to banking stakeholders for more support for Lomé's initiatives on the market. Though Togo recently witnessed a string of successes in the market, these victories may be short-lived, since the BCEAO, WAEMU’s central bank, could raise its key interest rates to mitigate inflation.

The specific sectors to be affected by Togo’s impending budget cuts remain undetermined. The initial budget was approximately CFA2,000 billion, with CFA623.4 billion (31.8%) assigned to social sectors. Almost half (48%) of the projected expenditure was earmarked for implementing Axis 1 of Lomé's 2025 roadmap; this axis aims to enhance social inclusion and human capital.

Ayi Renaud Dossavi

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