Togo First
Togo: The government just ended its first seminar in 2023
The government of Togo held its first seminar of the year last Friday, in Kpalimé. The 3-day meeting was chaired by President Faure Gnassingbe himself.
During the seminar, the leader and his collaborators assessed how advanced the key projects of the 2025 government roadmap were and their impacts.
The seminar was organized in a particular context. Indeed, Togo will hold regional and legislative elections this year.
The previous seminar was held last September, still in Kpalimé. At the time, participants looked at how advanced some projects were–road, health, urbanism, and investment projects notably.
Esaïe Edoh
Togo: Food Security Agency launches cereal sales campaign
The National Food Security Agency of Togo currently sells cereals at low cost nationwide. The campaign, which will last a month, began on March 20.
The cereals sold are corn, rice, beans, and sorghum, in bags of 50kg and 20kg. According to the ANSAT, each region will receive 200 tons of grains.
The cereals are purchased from farmers during harvest. The operation aims to make sure Togolese populations can readily obtain cereals.
The Togolese government, it should be recalled, plans to commit CFA13 billion to food security this year, in line with its finance bill. This is 25% of the annual budget for the ministry of agriculture, knowingly CFA52 billion.
Esaïe Edoh
Investment: A Canadian business delegation visits Togo to explore opportunities in the mining, energy, and port sectors
A delegation of Canadian businesspeople is currently in Togo, exploring opportunities the West African country has to offer. The visit falls under the “Promoting the Togo destination” initiative carried out by Togolese authorities.
Most of the Canadian businessmen of the delegation are from New Brunswick province. They were led by Gaëtan Thomas, President and General Manager of the Economic Council of the said province. They visited the IFAD-Building in Adidogomé, the Industrial Platform of Adétikopé (PIA), and the Autonomous Port of Lomé (PAL).
After meeting with Togolese government officials, local employers’ associations, and actors of the private sector, the Canadians announced upcoming investments in Togo’s port, mining, environment, and energy sectors.
The investments should bolster the relationship between Togo and Canada, in a context where bilateral trade between both nations was valued at about $65.2 million in 2021, according to data from the Canadian government. That year, Canada exported $51.5 million worth of goods to Togo and imported $13.8 million worth of goods from the African country.
Esaïe Edoh
WAEMU: BOAD launches a $246M securitization operation
As Serge Ekué emphasized last November, securitization is "the only operation" that can help increase the balance sheet of local banks tenfold, an excellent tool that "will enable us to improve the contribution of the financial sector to national development plans.”
The Banque Ouest Africaine de Développement (BOAD) just launched a securitization operation of $246 million (or CFA150 billion). The operation extends from March 20 to April 3, 2023.
Specifically, the securitization operation involves converting sovereign loans that the Bank granted its member States into negotiable securities on the regional financial market. The operation should help the BOAD quickly raise funds to partly finance part of its 2021-2025 Djoliba plan, a strategic investment program, according to Adji Sokhna Mbaye, Director of BOAD Securitization.
The BOAD Securitization was specially created to combine financial claims or debts into a single package and convert the latter into marketable securities. It is in charge of managing receivables securitization mutual funds (FCTC).
The entity’s boss, Adji Sokhna Mbaye, said the funds raised through the securitization will be spent on key projects that are likely to improve employment, road construction, the GDP of States, and boost the production of clean water, rice, energy, as well as curb CO2 emissions.
Mbaye further noted that the recently-launched operation has one of the best risk-to-return ratios on the market. Also, she stressed, the underlying receivables benefit from a privileged status with a very high seniority and an AAA rating. This means that they have priority in case of default. Given that the BOAD is the only bank with an investment grade rating in the WAEMU, investors should trust it more.
Moreover, with the presence of a junior tranche of 1% subscribed entirely by BOAD, which is a category of securities with a lower priority in the order of repayment than the senior tranches, the Lomé-based institution indicates that it wants to strengthen the alignment of interests with investors.
Adji Sokhna Mbaye also revealed that a minimum 5% reserve account will be set up to protect investors against unexpected losses on the underlying sovereign debt.
All these incentives should, according to the BOAD, attract regional investors who "are looking for investments with stable and predictable returns, which is a perfect fit for the characteristics of this operation."
Three management and intermediation companies (SGI Togo, Impaxis Securities, and NSIA Finance) have been selected to form the consortium responsible for placing the bonds (securities) on the regional financial market at an annual rate of 6.10% for a maturity of 2.8 years (84 months).
Good timing?
Does the BOAD’s operation have a chance of succeeding? Especially in the current regional context marked by liquidity stress? The concern is also justified given the recent cancellations of issues on the regional debt market. For example, Benin and Mali recently postponed their latest issues on the public securities market, a day before deliberations.
Answering the question, Kokouvi Etsè, the General Manager of SGI TOGO, one of the three SGIs retained for the operation, declared: "The BOAD is a benchmark issuer on our financial market and all investors interested in diversification always want some of its securities in their portfolios. The securities are issued via a securitization vehicle of sound receivables of BOAD on States [...] given its signature quality, the previous issues of BOAD have been sold and closed successfully on the regional financial market.”
Containing debt ratio
This operation enables the BOAD to raise additional funds without resorting to debt. This is because the Lomé-based Bank wants to increase its equity, to meet the financing needs induced by government development projects, as well as the needs of the private sector–projects that are at the heart of the BOAD’s Djoliba plan.
There is also the Bank’s debt ratio which reached 250% in 2019 – a rate that Serge Ekué has been striving to contain since he took over the lender’s helm.
Increasing equity should, however, make things easier for the Bank. At present, the institution needs a capital increase of CFA554 billion to mobilize a total financing of €5 billion over the period 2021-2025 which is necessary to implement its roadmap.
Fiacre E. Kakpo
Togo: Government urges local banks to support the treasury’s issues on the regional money market
The Togolese government held last Tuesday, March 21, a meeting with actors in the local finance industry. The goal was to encourage the actors to support the country’s issues on the WAEMU market more.
"I would like to ask the President of the Professional Association of Banks and Financial Institutions of Togo (APBEF-Togo) to urge banks to further support the Treasury in the mobilization of resources on the regional market of public securities," Pré Simfeitcheou, the Presidential advisor and minister, said as he was chairing the meeting.
Simfeitcheou stressed the importance of having the Togolese more involved in the financing of Togo’s economy.
So far this year, the Togolese treasury has raised CFA103 billion on the regional money market. This is about a fifth of its annual target–CFA574 billion. The proceeds are used to finance the national budget which stands at CFA1,957 billion.
Esaïe Edoh
Togo: Inflation expected to fall to 6.8% in 2023
The inflation rate should stand at 6.8% in Togo, by the end of December 2023, against 7.6% last year. The figure was disclosed by the National Credit Council (NCC) during its first annual meeting, held on March 21.
According to the NCC, economic activity will be resilient, with economic growth rising by 80 basis points to 6.6%, compared with 5.8% in 2022 and 6% in 2021. It further indicated that all sectors should contribute to economic growth and that the tertiary sector, especially, would contribute 4%.
Looking back to 2022, the Council noted an improvement in the financing of the economy, as more businesses received loans. Over the period, lending rates decreased, by 20 basis points, which corresponds to 7.4% year-on-year.
Moreover, the credit portfolio of banks and decentralized financial systems kept improving, according to the NCC, with the gross deterioration rate of this portfolio falling to 4% at the end of December 2022, from 5% in 2021.
Esaïe Edoh
Togo and Niger create a mixed cooperation commission to bolster their relationship
Following the recent work visit of Niger’s President in Togo, the two countries have decided to create a mixed cooperation commission to boost their relations in various sectors.
The commission will mostly focus on security and transport issues. It will hold its first meeting in the last quarter of this year, in Lomé.
Ahead of the commission’s operationalization, however, the ministries of transport, trade, and finance of the two nations will hold a meeting in Niamey next month. The preliminary encounter will focus on issues related to goods transport and the Lomé-Niamey corridor.
Another meeting will follow, in Niamey again, but between the ministries of security and defense of Togo and Niger. On the occasion, participants will share their experiences in fighting against terrorism and extremism.
By establishing the new commission, Togo and Niger are committed "to working together to ease the free movement of people and goods within ECOWAS and to the full realization of goals of the African Continental Free Trade Area (AfCFTA)." They are also committed to fighting transnational organized crime, terrorism, and illicit trafficking, which they both face.
Esaïe Edoh
Togo: President Gnassingbe kicks off extension works at the Blitta solar plant
The President of Togo, Faure Gnassingbé, recently launched works to extend Blitta’s solar plant, which is located 230km from Lomé. The works should help increase the plant’s capacity, from 50MW to 70MW.
This is the third phase of the project. "This third phase started today will increase the capacity of the Blitta power plant from 50 MW to 70 MW, in line with our national strategy to boost renewable energy and provide reliable, affordable, and clean energy to all localities," Faure Gnassingbé said on his digital channels.
Once completed, the Blitta plant should supply power to 222,000 households. This is against 158,000 at present. The plant is one of the biggest in West Africa.
Regarding the recently-launched extension works, they were financed by the United Arab Emirates, through a $25 million facility announced last November.
Ayi Renaud Dossavi
The Port Management Association of West and Central Africa holds a meeting in Lomé
The Port Management Association of West and Central Africa, PMAWCA, is holding a meeting in Lomé, Togo, on March 21-24.
“Finance experts and legal affairs practitioners in ports will reflect on key issues like a follow-up of port concessions, procedures of liaising portions of ports domain,” the Association wrote on its website.
The meeting aims to bolster regional cooperation relative to port management and port competitiveness. This is in a context where the port of Lomé is among the top 100 ports in the world, the fourth best port in Africa, and the first in West Africa, in terms of container traffic.
The PMAWCA was established in October 1972 under the auspices of the Economic Commission for Africa (ECA). It covers ports in West Africa, Mauritania, and Angola. It takes into account a coastline of about 12,000 km and ports that handle about 300 million tons of maritime import/export trade for the subregion (excluding crude oil).
In 2018, the number of members of the association was 40, up from 9 in 1972.
Ayi Renaud Dossavi
South Africa-Togo: A group of South African economic investors is in Togo
Togo and South Africa are working on bolstering their relationship. Last Thursday, the two sides opened a meeting to this end. The meeting was held between a ministerial delegation from South Africa and the Togolese ministry of investment promotion.
Specifically, both sides are working on action plans for investment projects to develop in Togo. Projects of interest fall under Togo’s 2025 government roadmap and they are in the following sectors: agribusiness, energy, water, telecom, roads, ports, and airports infrastructure.
According to the ministry of investment promotion, the South African initiative will restart cooperation between the two countries, after it slowed due to Covid-19.
The meeting follows many similar ones held with investors from Africa, Europe, and Asia. It aligns with Togo’s ambition to attract more investors and contribute to its economic development.
Esaïe Edoh