To improve land management in Togo and simplify procedures to obtain land titles, the Office of Domains and Cadastre has decided to rely on digitization.
Falling under reforms initiated to facilitate property transfer, a land digitization operation helped dematerialize 43,880 deeds out of 46,183 issued. Thus, at Dec. 31, 2017, 95% of issued deeds were digitized. This was disclosed in a document released by the Togolese Business Climate Cell (CCA) which was launched last January 30, to coordinate and monitor implementation of the reforms initiated to improve business environment in the country.
Besides the digitization of deeds, property transfer cost was reduced to 6.3% in 2018, against 9.3% last year. Also, a property transfer office was established to accelerate transfer-related procedures. All these measures taken by the government aim at “creating a more conducive environment for operators to thrive in their activities”.
Digital archiving should continue until all land registries are dematerialized.
According to the African Development Bank (AfDB), reforms related to property transfer could raise private investment by 2%. This knowing that so far, this type of investment make up 62% of total investment in the country.
Fiacre E. Kakpo

Seven months after putting in place a State-Private sector consultative committee, the government of Togo just launched the Business Climate Cell (CCA). The latter’s objective is to coordinate ministries’ efforts, in order to insure synergy and efficient follow-up in the implementation of reforms aimed at improving businesses in Togo.
The launching ceremony and validation of global action plan for business climate’s improvement took place January 30, 2018 at Sarakawa hotel in Lomé, in the presence of the Prime Minister, officials and various economic operators. According to M. Komi Selom Klassou, “improving business climate is a major challenge for a prosperous economic development”, in Togo.
In this framework, many reforms were initiated by the government to promote entrepreneurship, attract local and foreign investments, and improve Togo’s governance indicators in global rankings. The final objective being to achieve a strong growth, reduce poverty and improve living standards of the Togolese people.
Subsequent to the implementation of these reforms which have positioned Togo as a commercial and business tourism hub in West Africa, another battery of measures were recently implemented. Behind this move is Sandra Johnson, the national coordinator of the Business Climate Cell, who tells us more about what is being done to transform Togo and ease the lives of entrepreneurs in the country.

Togo First: The recent set of reforms initiated by Togo to ease business creation aims mainly youth and women. What are the sectors, according to you, that provide them with more opportunities?
Sandra Johnson: Youth and women operate mostly in the sectors of trade and agriculture, agricultural processing also. Though at a small scale, they show promising results which deserve to be backed. These two sectors are part of the government’s top priorities, especially knowing that 60% of the population is youth and 52% of this proportion are women. Additionally, data released by the Centre for Business Formalities (CFE) shows that more than 60% of businesses launched are in the trade sector. Finally, even history attests of this as is the case with the Nana Benz, in Togo, who were the first African women to specialize in the commercialization of Wax, a fabric that is symbolic of African women’s value.

TF: What is the role of the business climate cell in this framework?
SJ : The Business climate cell is a strategic tool, placed under the direct authority of the President of the Republic, whose mission is to coordinate ministries’ efforts towards a more synergetic and efficient government action, in regards to business climate’s improvement. So far, about ten reforms have been introduced over the past two months. These include the liberalization of minimum social capital for LLC creation, reduction of registration fees for ownership transfer, 30% reduction in cost associated with power connection. The cell will tightly collaborate with the State-Private sector consultative committee created in March 2017 and headed by the Prime Minister.

TF : In sight of the changes, have you already set a target regarding the number of companies you aim to create?
SJ : The main goal of these measures is to push young businesses to regularize in order to benefit from various incentives and advantages, such as funding mechanisms put in place by the State, in partnership with financial institutions. We hope to double the number of companies, mostly those that were subjected to registration fees and stamps, as well as to legal notices publishing. The cancellation of registration fees, valued at 2% of minimum capital in cash, and 4% as goods, should also encourage the firms that were still hesitant to regularize their situation.
Let it be noted that adopting the 2014 decree on LLC creation by private deed, with no notary fees, and with model statutes available on CFE’s website, helped create twice more LLCs, with more than 70% of those by private deed.

“The main goal of these measures is to push young businesses to regularize”

TF : What are, according to you, the most important reforms left to implement, to get more informal businesses to regularize?
SJ : All the necessary legal conditions are in place to support the private sector which still is, as we know, economic growth’s driver.
Another good news is the adoption of the bill on the new tax code which will come into effect starting from 2019. This was during a council of ministers held Feb. 1, 2018. Under the new code, corporate tax will be reduced from 28% to 27%, then 25%. Meanwhile, some other taxes and duties will be suppressed, such as wage tax, corporate vehicle tax, or additional tax on income duty. The new code also plans to get rid of surtax on insufficiently built properties, special tax on drinks sale and manufacturing and also of tax on road hauliers’ income.
In the meantime, reforms will keep being implemented in regards to trans-border trade with the reinforcement of the single desk and the upcoming adoption of an application decree for the law on electronic signature, contracts’ execution with the creation, in the short term, of commercial tribunals, access to loans and the establishment of a single land office, among others…

TF : After creating their company, young entrepreneurs often have issues securing financing from banks. Do you believe that Togolese banks are ready to support this government initiative?
SJ : Yes, truly, loan access is one of the many issues denounced by economic actors, and this is the reason for the adoption in 2016 of the law for the creation of the credit information bureau which opened last year. The long-term goal of this move is to bring banks to reduce interest rates on loans, as well as ease conditions for their provision. We hope that its impact will show in the coming months.

TF : Are you looking into setting other measures enabling the development of other funding alternatives (venture capital, crowdfunding, microfinance, development bank…)?
SJ : Indeed, many mechanisms have been put in place by the government, such as the national fund for inclusive finance (FNFI), the Youth Initiatives Support Fund (FAIEJ), the national agency for financing promotion and guarantee. However, more profound talks are underway to develop more adapted tools, or even launch a venture capital fund.

TF : In what way could these reforms attract more foreign direct investments?
SJ : This set of reforms which aims at facilitating the creation of businesses, reduce import delays, alleviating and even suppressing some taxes, adds up to other measures such as the implementation of an investment code that provides significant advantages to both foreign and local firms.

TF : Do you expect Togo’s ranking in the World Bank’s next Doing Business index to rise slightly?
SJ : Obviously, if adequate information is relayed to the Bank. Because, the cell, in the framework of the action plan’s elaboration, has decided to adopt the methodologic approach of the World Bank, which is based on case studies, and is acknowledged and considered as a scientific approach. This approach, based on the various challenges they encounter was completed by actors of the private sector, during the validation workshop held on January 30, 2018.

Interview by Fiacre E. Kakpo.

Soon, a single desk dedicated to youth and women will be opened to federate all operations related to the issuance of administrative documents requested during public tenders. This was revealed in a document signed by the National Directorate of Public Procurements Control (DNCMP).
The desk will help centralize in one place, all operations for the issuance of documents necessary to economic actors who are to benefit from government’s measure involving the provision of 20% of its public procurements.
It will also save time to these entrepreneurs who will no more need to move from one place to another when gathering documents they need.
According to DNCMP’s document, documentation required include the economic operator’s card or an equivalent, tax clearance, non-bankruptcy certificate, extract from trade register and credit register excerpt, certificate from national social security fund, labor and social laws inspection certificate, and finally the proof of payment of royalty on public procurement regulation.

German firm Petrofer which specializes in industrial lubricants, oils and greases, has announced last Saturday it entered the Togolese market.
In effect, it is the Togolese firm, Equilibro Distribution, which will be in charge of selling Petrofer’s products in the country.
With more than 60 years of experience, the German company is the world’s number one industrial oil maker. It provides high-quality engine oils in many countries around the world, including Benin, Ghana, Guinea and Senegal. Its arrival in Togo falls under its strategy to reach more West African nations.
With the move, the firm “kills two birds with one stone” as it is also driven by Togo’s position as business crossroad and transit corridor for all countries with no access to the sea, such as Burkina Faso, Niger and Mali which are served by the Lomé port.
Hosting many headquarters of many sub-regional institutions (BOAD, BIDC), pan-African companies (Ecobank, Asky), Togo presents many opportunities. Those are spurred by its youth, growth, rising middle class, business tourism sector which show bright perspectives, and especially an improved business climate.
Fiacre E. Kakpo

Togo’s economic actors are complaining about how fast taxes of regional and sub-regional integration institutions are being implemented. In fact, they denounced this to the government’s delegation presenting new provisions of the 2018 finance law.
This was last Wednesday, during a meeting organized by the Employers’ association national council.
The private actors ask the government to create a real supportive framework before implementing African Union’s tax.
Concerning the WAEMU and ECOWAS taxes, the operators demand more harmony and supporting measures for their implementation. “Customs? It applies Togolese laws when it is supposed to apply those of the ECOWAS,” deplored one of the economic operators present.
General Treasury officer of coffee-cocoa exporters’ association for his part complained about the government’ zeal, saying it inhibits the Togolese market’s performances. “What we don’t understand, at the WAEMU’s level, when laws are adopted, it seems that other nations do not immediately apply them. But in Togo, it is done and this generally penalizes economic operators. Ours customers often claim we are too expensive because they compare our prices to those used in neighboring countries, where the WAEMU tax is yet to be applied,” he said.
Other complaints include challenges related to free movement of people and goods within the integration zone and the strong presence of foreign actors (with Bolloré group openly pointed fingers at) at the Autonomous Port of Lomé.

Fiacre E. Kakpo

Presently, telecommunications contribute 8% to Togo’s gross domestic product (GDP) and according to Pyramid Research’s forecasts, this sector should record an average annual growth rate of 6.5% in 2015-2020, thus generating $617 million over the period. This performance will be driven by mobile voice and fixed internet services, which are expected to grow at a rate of 19.9% per year average, over the period considered. 

Moreover, with the potential arrival of a third operator, competition will surely get ruder. So far, rates of Togocel and Moov Togo for mobile services are among the highest in West Africa. As a result, the government capped the rates to make communication easier and more affordable, relatively.

Still, rates for international call in Togo are relatively high compared to those of neighboring countries. Indeed, a comparative study conducted by the sector’s regulatory organ shows that Togo’s rates for international calls (ECOWAS, France and other European countries, Canada and US) are slightly higher than rates applied by Burkina Faso, Côte d’Ivoire or Senegal. The arrival of a new operator could thus effectively bring these mobile communication rates down. In this regard, there are talks about the intentions of South African giant MTN, already leader in Benin and Nigeria. However, let’s recall that process for awarding of a third mobile telephony license has been announced since 2009.

In the sector of posts, restructuring should result in private management of postal services.

As for information and communication technologies, the government still works to improve access to IT equipment and consumables to all. In this framework, an exoneration was applied to IT equipment imports, in the 2017 fiscal year. However, government had to go back to its initial tax policy, since last Jan. 1, as the measure produced mixed results.

Concerning internet connectivity, Togo records a good performance but there is still much work to do. Data transmission (Internet) is mainly dominated by Togo Telecom and Café Informatique who provide up to 100Mb/s bandwidth and supply most of the other providers (Moov, Togocel, etc). Two other operators, including Téolis, should start operating in February 2018.

Agriculture contributes 40.7% of Togo’s GDP, according to recent statistics released by OECD. It generates 15% of the country’s exports and employs 65% of its active population. However, the nation exploits only 45% of its arable land, that is 3.4 million hectares, and its agricultural processing sector is still embryonic.

Sectors

Togo’s main agricultural exports are coffee, cocoa, cotton and cashew. Cotton generates the most export revenues in the agricultural sector, contributing about 4.3% of GDP. In 2016-17, nearly 108,000 tons of cottonseed were produced. An output that the country wishes to increase to 200,000 tons by 2022. Cashew, which is mainly grown in the central and plateaux regions, recorded an output of 9,000 tons in 2017. In WAEMU, Togo is the second largest producer of the crop, after Côte d’Ivoire. It produces about 8,000 tons of cashew in a year. Concerning coffee, Togo’s output is still below 20,000 tons.

Regarding subsistence farming, the country cultivates cereals (rice, maize, millet, sorghum and fonio), roots and tubers (cassava, yam, sweet potatoes and potatoes) as well as legumes, fruits and vegetables.   

Policies

For some years now, Togolese authorities have been giving a particular attention to agriculture. In fact, after Rwanda, Togo became in July 2009, the second sub-Sahara African nation, and the first in West Africa, to sign up for the Comprehensive Africa Agriculture Development Programme (CAADP).

In 2010-2015, Togo adopted the national program for agricultural investment and food security (PNIASA in French). This program which aimed at boosting farmers’ productivity and earnings, helped satisfy 110% of the country’s demand in cereals, between 2013 and 2016.

Also, in the framework of the 2017-2026 program for agricultural investment, food and nutritional security (PNIASAN), more than CFA1,250 billion were committed for investments, to bring agricultural GDP up 10%.

Finally, there is the Programme for Governance Support and Agribusiness Promotion (PAGPA) which aims at helping “create necessary conditions for a strong and inclusive agribusiness-driven growth”.

Togo has an electrification rate of 45.7%, according to the World Bank. This represents a significant surge compared to 2005’s 18%.

The country has an installed capacity of 229MW for a local consumption which stood at 1,213GWh, in 2015. Due to its power deficit, Togo has to import 40% of what it consumes from its neighbors, Ghana and Côte d’Ivoire.

Since 2014, Togo set as goal to raise its electrification rate, to 50% by 2020, and 90% by 2030, on its path towards emergence.

To this end, it will focus mainly on boosting electrification rate in rural areas, from 7% in 2017, to 40% in 2022.

Hence, in the framework of the regional programme for renewable energy development and power efficiency, Togo plans to build a wind farm and provide electricity to 22 villages, with PV installations. This project is developed in partnership with India and should help electrify 150 rural communities.

Additionally, the government also plans to supply power to 2 million people, in the framework of the CI-ZO project under which domestic solar kits will be provided to rural populations.

Togo’s mining sector is still very little developed. Indeed, despite the riches of its underground, the sector contributes little to the economy and investments are far from meeting expectations.

Some figures…

According to ITIE report released Dec. 2017 for the 2015 fiscal year, extractive industry contributed CFA17.910 billion to State revenues, including CFA13.208 billion (82%) generated by mines. Hence, extractive sector represents a little more than 2% of overall State revenues, and about 3.7% of GDP. Most of the sector’s revenues come from phosphate. Along with this mineral, Togo’s other main mining products are clinker and gold. They respectively represent 13%, 6% and 3% of the country’s total exports. In regards to employment, data shows that the extractive industry employs 0.6% of active population.

Mining exploitation and outlook for the sector in Togo

As said earlier, Phosphate is Togo’s most exploited mineral. It is mined by a single firm, SNPT, which is active in Hahotoé and Kpogamé at two mines with reserves estimated at 50 million tons.

The country also produces limestone at the Taligbo deposit which is currently operated by WACEM and Scantogo Mines. Other companies got an exploitation license to mine iron, marble and manganese.

Togo has many resources and if those are fully exploited, it would significantly boost its economy. For example, iron resources are valued at 500 million tons in the Bassar region, while chromite, phosphate and manganese resources are estimated at 50,000 tons (Kabyè deposit), 55 million tons (Bassar) and more than 6 million tons (Nayéga) respectively.

Government’s strategy will thus mainly be to attract more foreign investments in the sector, both in its exploration and exploitation segments.

Mining Code and useful links : see here

During the last ministers’ council, held on Febuary 1, 2018, the government has adopted a bill on the new tax code.
According to the minutes of the meeting, the need to reform the general tax code is to be attributed to a number of reasons; the main one being that Togo’s general tax code which results from a law passed on December 30, 1983 and has been amended repeatedly, has become obsolete. This also is due to the emergence of new challenges related to taxation, especially when it comes to improving business climate.
The proposed reform will focus on many aspects and follow some guidelines, the council of ministers said.
First of all, corporate tax will decrease from 29% to 27%, and progressively to 25% which is WAEMU’s standard. Presently, this figure is at 28%.
The announced reform also fosters indirect taxation, which is based on VAT and excise duties whose neutrality is reinforced by the organ for VAT loan repayment, in conformity with good practices.
Also, aiming to downsize informal sector’s weight in the economy, the adopted bill plans for tax incentives targeting small and medium enterprises. Among these, there is turnover-based taxing with rates of 8% and 2% for service providers and merchants, respectively.
SME and SMIs support will occur through the consecration of tax relief measures for tax payers overseen by Certified Management Centers (Centres de Gestion Agréés), and other public organs in charge of monitoring informal sector.
An incentive-based tax regime will also be established for SME and SMIs that are not covered by the new investment code due to the imposed level of investments.
The government also plans to broaden tax base to promote tax revenues collection and better finance State and local communities’ budgets.
Moreover, many taxes have been cancelled. These include: wage tax, company vehicle tax, additional tax on revenue tax, surcharge levied on poorly built properties, special tax on drinks manufacturing and sale, tax on road hauliers’ income. In addition, a new modality will be integrated in the new formula to compute business tax.