Togo’s national council of employers has just released a report assessing the economic impacts of the government’s Covid-19 response. The document also contains some recommendations to revamp the economy. 

The report is in effect the results of a survey of 110 companies. The latter reveals that 41% of the surveyed firms have paused their activity while the rest function at a slow pace. The survey also shows that only 6% of the surveyed have sent their employees on paid leave or allow them to work from home. Meanwhile, 91% of the companies have opted for temporary lay-offs. 

The employers' council demands that penalties for the delayed execution of public contracts are canceled during the crisis. At the same time, the council asks the government to pay internal debts, with priority given to SMEs and SMIs, to create a guarantee fund that will help finance the recovery of SMEs and SMIs especially. 

Séna Akoda

US rating agency Standard & Poor’s maintained its ‘B’ long-term and short-term sovereign credit ratings on Togo. “The significantly adverse effects of the COVID-19 pandemic will take a toll on the Togolese economy and public finances in 2020. Nevertheless, the country's solid economic performance and the fiscal consolidation over past years should contribute to a rapid economic recovery from next year,” the agency said in its latest update for the country released on April 24. 

Uncertainties

S&P hence expects a slow restart of economic activity starting from the second half of this year. Just like the IMF, the agency forecasts a 1% growth rate for the rest of 2020 but unlike the Bretton Woods institution it emphasizes that “our economic projections are uncertain, however, since they depend on how the pandemic evolves.” S&P attributes this uncertainty to the large informal sector, “unaccounted for in official data.” This sector, experts say, makes it very difficult to estimate the pandemic’s economic impact. 

Regarding the budget deficit, it should dip to 4%, despite international actors mobilizing funds to help Togo cope with new spending spurred by the Covid-19 and losses of tax earnings. This is quite unfortunate given all the efforts the country had made to improve its public finances in recent years.

“The stable outlook on Togo reflects our view that the adverse economic and budgetary impact of the COVID-19 pandemic will be contained without lasting and structural damage to credit metrics,” S&P says adding that “once the impact of COVID-19 is contained, we expect the authorities to continue with further structural economic and budgetary reforms, leading to improved economic and budgetary performance.” 

Socio-political risks

In addition to its uncertainties, S&P, based on recent facts (mid-2017) and the regional context, talks of socio-political and security risks in the short and long term. These “could be a disincentive for private investors and make foreign investment flows more uncertain.” Quite a dire premonition for the country which depends on these investors to provide 65% of the funds needed for its national development plan (PND). 

Here again, the report’s authors believe that once the pandemic is contained, investments in export sectors (phosphate and cotton mainly) and infrastructures, in line with the PND, should restart. 

WAEMU, a fortunate protection

A good point for Togo, according to S&P, is that it is part of the West African Economic and Monetary Union (WAEMU). Indeed, the latter is for the country a safety net protecting it with the regional stock market, solid reserves, and the possibility to use part of the cash liquidity it (Togo) has at the BCEAO to plug the budgetary deficit. However, this might not be possible if pressure on the zone’s foreign reserves rises, especially considering that the imbalance between import and export bills keeps growing. 

Fiacre E. Kakpo

Last week, Pan-African lender Ecobank disbursed about $3 million to help African nations fight the Coronavirus pandemic. 

The support, which was provided in cash and health equipment, also involves sensitization campaigns and money transfers to the most vulnerable people, via the bank’s digital platform. 

In the same framework, Ecobank has canceled some fees on its digital platforms. 

“We believe in the importance of creating awareness in our communities, while also empowering them to protect themselves and their families as we battle the pandemic,” said Ade Ayeyemi, Group CEO, Ecobank Group. 

Ecobank, which operates in more than 30 African countries, also collaborates with the African Union’s development agency (AUDA-NEPAD) to help African SMEs in coping with the economic impacts of the Covid-19 pandemic.

France will back Togo’s Covid-19 response with €3 million. The funds should be part of the European nation’s support to Africa, relative to the pandemic’s impacts on health, people, economies, and even debt. 

The news was announced by President Emmanuel Macron himself along with congratulations to his Togolese counterpart, Faure Gnassingbé, on the sidelines of the 60th independence day anniversary of Togo.  

The money promised will, among others, help Togo acquire lab equipment and better monitor and take care of the Covid-19 patients. 

According to Macron, “the French Development Agency (AFD) and other operators will remain focused on other priorities falling under the Togo-France partnership, concerning basic social services especially.”  

Séna Akoda

In the latest World Press Freedom index, Togo gained five places... 

The report released by Reporters Sans Frontières (RSF) places Togo at the 71st position (against 76th last year). While the country's rank is better this year, it should be noted that between 2018 and 2019 it gained 10 places in the ranking. 

In Africa, Togo holds the 14th position, far behind the top three which are Namibia (23rd in the world), Cape Verde (25th), and Ghana (30th). 

Worldwide, Norway, Finland, and Denmark top the ranking while Eritrea, Turkmenistan, and North Korea occupy the last seats. 

Ayi Renaud Dossavi

Togo has joined the African Trade Insurance Agency (ATI). It is a pan-African financial institution that provides credit and political risk insurance products to support African investments. 

The adhesion of Togo was backed by the European Investment Bank (EIB) through a $12.5 million concessional loan. This was disclosed by the government of the West African country. 

The move was accelerated due to the coronavirus pandemic, which African countries believe will put pressure on their capacities to insure investment and commercial risks.

“As we are preparing to handle the economic impacts of the Coronavirus, African governments are trying to curb its short and long term effects,” said Togo’s minister of finance. “We believe that joining the ATI is necessary for us to reinforce our economy and face this storm.” 

Other West African nations that are already part of the ATI are Ghana, Niger, and Nigeria. They completed their adhesion in the past nine months. 

Ayi Renaud Dossavi

In Togo, it is now possible to request land transfers online through the e-foncier platform specifically designed for this purpose. 

Citizens, notaries and economic operators can pay fees for land transfers, ask questions, and submit copies of descriptive statements on the platform. 

The initiative falls under the will of the Togolese Revenue Office (OTR) to “dematerialize land deed archives and save time in processing land transfer requests,” according to the institution’s head commissioner, Philippe Kokou Tchodié. 

The OTR has so far dematerialized 99.32% of its land deeds. This is against 45% five years ago. 

Séna Akoda

Ecobank and AUDA-NEPAD will establish together a continental framework to support micro and small-medium African enterprises (MSMEs) in overcoming social and economic challenges posed by the Coronavirus pandemic. 

In effect, the two organizations will create a one-stop platform that will address businesses’ needs and issues during and after the pandemic. The platform should be “an all-encompassing, flexible, and comprehensive one-size-fits-all tool for MSMEs in the formal and informal sectors across the continent.” 

“AUDA-NEPAD and Ecobank Group intend to jointly build a continental platform based on our initial ‘100,000 SMEs by 2020’ campaign which will provide an immediate response to the potential impact of COVID-19 on SMEs and job creation on the continent,” said AUDA-NEPAD’s Chief Executive Officer Dr. Ibrahim Assane Mayaki  

Moreover, the two partners will identify opportunities and new ways to support and protect MSMEs (operating in the agribusiness, technology, health sectors, and also those operating along with supply chain operations).

AUDA-NEPAD was established in 2010 to integrate the NEPAD in the African Union’s processes and structures. The new framework aims at ensuring that more attention is given to MSMEs across Africa while prioritizing short, medium, and long term responses to the Covid-19 pandemic.