The BOAD and MIFA’s coordination team will “in the coming days” sign partnership agreements, sources close to the MIFA indicate.

The deals fall in line with support provided by BOAD to the Togolese scheme. In effect, the regional bank should invest €100 million in this project.

In this framework, a guarantee line should be put in place to facilitate farmers’ access to financing.

Also, firms of the concerned value chain should be funded via a dedicated desk. Last, a MIFA project is to be financed under the guidance of MIFA’s coordination team.

The MIFA, let’s recall, is based on a risk-sharing principle. It aims to boost bank loans to the agricultural sector via related value chains.

Séna Akoda

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

Togo will, on next February 17, proceed to the semester payment of profits and partially reimburse capital associated to its “2016-2026 6.50% State Sukuk”, BRVM revealed in a statement.

While no detail filtered about the amount of this first partial payment, the notice released by the Joint Fund for Receivables Securization upon the sukuk’s issuance for its part indicates that a little more than CFA16.309 billion will be paid, over a total of around 217.635 billion.

This would be the first of 16 tranches to be made with the last set on August 17, 2026.

Let’s recall that Togo subscribed, in the framework of this sukuk, a total nominal amount of 150 billion CFA for a projected maturity period of 120 months, with a two-year grace period, at a unit price of CFA10,000.

According to the Islamic Development Bank, “a Sukuk is the Islamic equivalent of the western bond. However, unlike regular bonds where the investor owns a debt obligation owed by the issuer, a Sukuk provides the investor owns part of an asset linked to the investment, and also a portion of earnings associated to the asset, and shares part of the related risks. This complies with the Sharia – Islamic religious law, which prohibits interest billing or payment”.  

Séna Akoda

This year, the International Monetary Fund (IMF) could provide Togo three new financing facilities valued at about $35 million each. However, the funds’ disbursement is conditioned by results of ECF-backed three-year program approved in May 2017 for the country, for an amount of nearly $241.5 million, when the agreement was signed.

This program was reviewed three times, enabling multiple disbursements. Overall, four transactions were conducted since the deal’s signing. The last of these four disbursement operations took place last December bringing total amount provided by the IMF in the framework of the program to 100.68 million SDR (around $139.5 million).

In 2019, three more reviews are expected. Each, depending on their conclusion, should result in a disbursement of 25.17 million SDR (around $35 million). This makes a total of at least $100 million in case all the reviews are conclusive. Respective approvals for the operations are expected in March, September and December.

Let’s recall that the program mentioned aims at reducing Togo’s budget deficit to ensure a long-term sustainability of  its debt and external position, while reorienting economic policy toward an inclusive growth leveraging specific social expenses and viable infrastructure financing. It also intends to fix financial shortcomings of the two public banks.

Fiacre E. Kakpo