In Togo, new entrepreneurs are not fazed by Covid-19

Wednesday, 13 October 2021 12:07
In Togo, new entrepreneurs are not fazed by Covid-19

(Togo First) - Despite the persistent health crisis, the number of businesses started in Togo should reach a new high this year.

By the end of September 2021, official data shows that 10,806 new businesses were registered in Togo. This represents a 13.4% increase compared to the 9,527 businesses registered over the first three quarters of 2020. The upward trend - recorded over the past few years - is attributable to several reforms introduced by the government to boost the business climate.

Business registration keeps rising

Looking at data compiled by Togo First, the upward trend was most noticeable between February and June. At the time, the Central Bank of West African States (BCEAO) put GDP growth above 10% (Q2 2021).

In July, the dynamics slowed but jumped back in August, at a slower pace, however; a situation caused by a resurgence in the number of Covid cases (delta variant), which led the government to take new restrictive measures. According to several observers, business registrations could reduce due to the measure enforcing the presentation of a vaccine pass before accessing administrative buildings.

The life expectancy of businesses

Fifteenth (15th) in the world and 1st in Africa in the 2020 Doing Business (DB) ‘Starting a Business' indicator, Togo maintains its reform dynamic. The country does not plan to stop, according to Sandra Johnson, Minister, Secretary-General of the Presidency in charge of the business climate, the linchpin of the economic reforms initiated since late 2017.

Regarding the life expectancy of businesses in Togo, a recent study carried out by the Center for Business Formalities (CFE) revealed that over 70% of businesses created between 2010 and 2015 were still active in 2018. Half of these firms, the study noted, derived their earnings from 10 clients, maximum, and these clients were either big clients or big companies. However, private individuals remain the most important clients of Togolese companies.

The same report notes that problems relating to outlets and access to financing represent 70% of the difficulties encountered by entrepreneurs.

It is worth emphasizing that over 70% of businesses registered in Togo are small-sized companies, and they were greatly hit by the pandemic and measures taken to counter it. 

Greater support for MSMEs

Last August, the government updated and validated the charter of micro, small and medium enterprises (MSMEs), in a context where they have the most trouble accessing markets (outlets and financing).

The reform should allow these businesses to easily access land, help them secure certifications, and get financing. Regarding the latter, the BCEAO estimates that nearly 70% of bank loans go to the private sector (7% - 8% to individual businesses).

“This charter will allow SMEs to form a strong unit, and this will help them access funding mechanisms,” said the Minister of Communication and Media, Prof Akodah Ayewouadan.

Fiacre E. Kakpo

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