Launched in June 2018 by President Faure Gnassingbé, the Agriculture Incentive Financing Mechanism (MIFA) which is based on risk-sharing, celebrated last week its second anniversary. 

Over the period, the MIFA, which is inspired by the NIRSAL in Nigeria, helped distribute more than XOF14 billion to 144,000 actors of the Togolese agricultural sector, of which 125,000 are farmers. This was done through 10 financial institutions, namely Ecobank, Orabank, Sunu Bank, UTB, BTCI, SOGEMEF, FUCEC, African Lease Togo, and Bank of Africa. 

The mechanism also received support from many financial partners including the AfDB, IFAD, and the Khalifa Fund. It also structured viable markets worth XOF124 billion which are related to production and transformation across all agricultural sub-sectors. 

In total, the MIFA created nearly 163,000 jobs in Togo (both direct and indirect) since it began operating. 

More ambition for 2020

The ambitions of the mechanism this year are even greater, despite (or because) the major challenges spurred by the Covid-19 in the agricultural sector. Among others, the MIFA is boosting its actions to improve transportation of agricultural products, contribute to the government’s covid-19 response, and make it easier for farmers active in key sectors to get the inputs they need. 

In effect, the mechanism plans to mobilize XOF50 billion for 400,000 agricultural actors, as well as generate 450,000 jobs in 2020. 

The Togolese public treasury seeks XOF30 billion on the regional financial market. This is the country’s first operation on this market this semester. 

Lomé has, in this framework, launched simultaneously two bond issuances with respective maturity periods of 3 and 5 years. While the bonds for both operations have a nominal value of XOF10,000 per unit, interest rates for the issuances are respectively 6.15% and 6.4% per annum. 

According to the Umoa-securities agency which manages the region's public securities market, the operation aims at “mobilizing funds from individuals and corporations to finance Togo’s state budget.” 

Let’s recall that since the year started Togo, like all the other WAEMU members, has regularly and successfully sought financing on the WAEMU regional finance market.

Fiacre E. Kakpo

In the past few days, many have been wondering about the privatization of the Nouvelle Société Cotonnière du Togo (NSCT). Talks between the Singaporean group Olam and the State are underway and if conclusive, the Asian firm could secure part or all of the latter’s stake in the public company. The privatization was approved on Monday by the parliament. 

Concerns about the transaction are mainly related to the fact that usually in Togo when the State decides to privatize a business, it is due to low financial performances or internal issues. This time, however, sources close to the ministry of finance and economy indicated, it is not the case. The NSCT is doing well and posted a net result of XOF4.6 billion in 2019. 

The decision to privatize the firm aligns with the authorities’ ambition to modernize the cotton sector, create a new chain of value, and take full control of the industry, from the production to the transformation stage, as well as direct, or intermediate consumption. 

Great ambitions and great challenges

Togo thus relies on Olam which has recorded good results in countries such as Chad and Côte d’Ivoire, both in the cotton production and logistics sectors. The government, with the Asian group, plans to get its textile industry afloat and massively create jobs. 

Concretely, the privatization of the NSCT should not negatively affect production at the Nioto oil factory which strongly depends on the former for its input. 

During the previous cotton campaign, 2019-2020, Togo produced 116,000 tons of the crop. This is far from the 200,000 t yearly output which the country expects to reach in the next two years. To improve the situation, the government plans to motivate farmers who were discouraged by the drop in the price of a kilogram of cotton. Some sources suggest that authorities have entrusted Olam the task of significantly raising incomes of cotton farmers in the next three years, and ensuring a yield per hectare of 900-1000 kg in the short term. 

Cotton is Togo’s first export and it contributes to 4% of the country’s gross domestic product (GDP). 

Séna Akoda

Yesterday, France and Togo signed an agreement under which the former will provide the latter XOF2 billion (€3 million) for its Novissi scheme. The document was signed by the Togolese minister of economy and finance, Sani Yaya, France’s ambassador to Togo, Marc Vizy, and the head of the French Development Agency (AFD). 

The Novissi scheme is an initiative launched by the State to help actors of the informal sector who struggle due to restrictive measures put in place to contain the pandemic. So far, 560,000 people -women mostly - received more than XOF11 billion (€16 million), via mobile money, in its framework. 

The funds, which were promised by French President Emmanuel Macron, align with the Santé en Commun initiative which aims at supporting socio-economic actions set under Togo’s national response against covid-19. 

“I am extremely happy and proud of this partnership which supports the response of the Togolese government to this global crisis that has major economic repercussions,” Vizy said.

At the beginning of April this year, Togo announced it would mobilize XOF400 billion to deal with the economic repercussions of the covid-19. 

Out of this sum, XOF200 billion has been secured so far. The figure was disclosed by Ekpao Adjabo, director-general of the public treasury and accountability. He did so on the sidelines of a meeting between Togolese officials and AfDB executives to sign a financing agreement in profit of the Novissi programme. 

The amount mobilized so far - XOF200 billion - came from various sources including 2.5 billion voluntary donations.

Yesterday, June 29, the Togolese parliament greenlit the bill approving the privatization of the Nouvelle Société Cotonnière du Togo (NSCT). 

With this milestone reached, talks with Singapore-based Olam group which eyes the State’s shares should soon begin. The private company could secure up to 51%, if not all, of the State’s 60% stake in the NSCT - the remaining 40% being detained by the National Federation of Cotton Farmers (FNGPC). 

However, the government promised farmers and workers employed at the NSCT will not be laid off as a result of the privatization. “Their interests will be preserved,” said minister of finance Sani Yaya who even added that their income should increase substantially over the next three years.  

Séna Akoda

As part of major infrastructure projects underway or already carried out in Togo, the government plans to build or rehabilitate 400 km of roads and 4,000 km of rural tracks.  

This should make communities affected more accessible and contribute to their development. 

By 2025, Togolese authorities hope to have 60% of roads across the country asphalted. This will be done through projects aimed at rehabilitating the development corridor, crossroads, and access ways. 

To this end, Lomé has launched many road projects. These include the rehabilitation and modernization of the Avépozo-Aneho road, another covering the Lomé-Kpalimé axis, or even road works in Kpalimé. 

Séna Akoda

In Togo, quarantined repatriated citizens will have to pay XOF500,000, against XOF700,000 previously, to the State upon their return.

The government, therefore, takes care of the XOF200,000 difference during the 14-day period during which the returnees will be quarantined. The information was disclosed in a notice issued by the national team in charge of the covid-19 response on June 26, 2020. 

Let’s recall that so far, about 340 Togolese citizens have returned home since the pandemic emerged, via special flights. Most of them came back from the Middle East, Switzerland, and Senegal.

The State will give up its 40% shares in the Nouvelle Société Cotonnière du Togo (NSCT). The government adopted in this framework a bill to transfer the stake to the private sector, in full, if an interested investor is found, or in part.

For the moment, the other stakeholder of the NSCT is the national federation of cotton farmers (FNGPC) which holds 60% of the firm. 

Let it be noted the NSCT has greatly contributed to an increase in Togo’s cotton output. Indeed, from 27,000 t in 2009 (the lowest level ever recorded), the company helped ramp this output to 137,000 t during the 2018-2019 campaign. 

The increase also impacted farmers’ earnings. In 2019, their net income exceeded XOF24 billion, “a performance which no other sector could achieve so far,” said the minister of agriculture, Noël Bataka. 

However, between the 2018-2019 campaign and the 2019-2020 campaign, cotton production shrunk to 116,000 but the country expects this figure to rise to 200,000 t by 2022. 

Séna Akoda