Togo: Government commits to reducing budget deficit to 1.5% in 2019

Public finance

Monday, 28 January 2019 17:25

Togo: Government commits to reducing budget deficit to 1.5% in 2019

(Togo First) - Lomé committed with the IMF to reduce its budget deficit, grants included, to 1.5%. This was revealed in a letter of intention dated November 20, 2018, from Minister Sani Yaya.

“The government has adopted the 2019 finance law which aligns with the global purpose of the ECF-backed program. The new law eyes a maximum budget deficit of 1.5% of GDP, far below the 3% set within the WAEMU,” Sani Yaya declared.

The government will thus streamline its budget.

“Our budget adjustment will focus on improving collection of revenues, through permanent measures relating to tax management and policy, rationalization of non-priority expenses, following expenditure review,” the official added lauding budget performances of the first half of 2018.

“Revenues exceeded forecast of 1.5% of GDP and expenditures were below 3.4% of GDP set under the budget, mainly because expenses for equipment which were financed by external resources were lower than projected”.

“This unprecedented budget streamlining will help reduce the public debt/GDP ratio in 2019 to 70%, as compared to 77.7% in 2016. Hence, this year, all convergence criteria of the WAEMU should be met,” Yaya further indicated.

While the IMF forecasts a debt ratio of 70% this year, the WAEMU for its part expects the figure to fall to 67.5% of the GDP, spurred by a new debt strategy.

Fiacre E. Kakpo

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