Togo First
CCIT puts in place a specific entity to help SMEs manage their taxes and accountability
Togo’s Chamber of Commerce and Industry (CCIT) has created, with various partners, the Accredited Management Center (CGA) which helps businesses with a turnover of less than XOF100 million to efficiently manage their accountability, taxes, and elaboration of financial statements.
The firms will in turn pay the institution a percentage of their turnover every month.
"Monthly payments vary according to the turnover amount ranging from XOF5,000 to XOF60,000. In exchange, the CGA produces financial statements which beneficiaries have to submit to tax offices," Germain Meba, CCIT’s chairman told Togo First. Meba added that regional CGAs all over the country will be created by 2020.
In addition to the above-mentioned benefits, businesses adhering to the CGA also benefit from tax incentives. The latter spans five years according to the business tax regime (Single Professional Tax or Simplified Taxation Regime).
"Businesses that adhere to accredited management centers benefit from a 40% reduction in combined tax over the four years following the date of adhesion. In the fifth year, this reduction is brought down to 15%," declared Sandra Johnson, Minister-Counsellor to the President, in charge of Business Climate.
GIABA lauds Togo's efforts in tackling money laundering and terrorism funding
In its latest annual report on fighting money laundering and terrorism funding, released last week, the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) lauded Togo for its improvements in this area.
The country has "demonstrated more commitment than in the past relative to the implementation of anti-money laundering and terrorism funding policies that meet international standards."
The regional institution then urged to pursue this path, to rapidly tackle "persistent shortcomings of its system."
GIABA, however, noted an increase in corruption level in the country, saying it impairs effective implementation of policies to fight money laundering. This despite the adoption of various laws to counter corruption and some condemnations even.
In 2018, Togo's financial information cells registered 323 declarations of suspicious operations over a total of 12,675 across West Africa. Most of these operations, 10,346 to be precise originate from Nigeria.
Ayi Renaud Dossavi
S&P affirms B-/B rating with stable outlook for Ecobank group
Standard & Poors has affirmed its B-/B long and short-term issuer credit ratings on Lomé-based Ecobank Transnational Incorporated (ETI) with a stable outlook. The rating agency issued a B/B ratings to the group's Nigerian subsidiary with a stable outlook as well.
According to S&P, the rating takes into account the group's strong presence in Africa, paired with efforts of its new management to tackle issues impairing the quality of its assets and financial performances.
"We think its unique pan-African franchise has attracted a stable base of institutional investors, including Nedbank, Qatar National Bank and South Africa-based Public Investment Corporation, which have positively affected the group's corporate governance and risk management," S&P stated in its report.
According to the agency's forecast, loans by the group should rise over the new twelve months while risk-related costs are expected to reduce, thus translating into better profits. ETI operates in more than 30 African countries.
Ayi Renaud Dossavi
In Togo, agriculture is still highly under-financed by banks
For the first half of 2019, the proportion of loans to agriculture by banks represented only 0.2% of the institutions' overall lending to the economy over the period. This is in a context where this sector contributes 40% of Togo's GDP and employs 60% of its population, worried Demba Tignokpa, the minister of development planning.
Banks' lending to agriculture thus is at the same level as when the MIFA was launched last year. This is far from the 5% objective set by the minister of agriculture, Noël Bataka, for 2020, leveraging the MIFA.
Overall, Togo, just like many of its neighbors, is under-financed by its banks. Indeed, bank financing represented only 40% of GDP in H1 2019.
"As revealed at our previous sessions, financings are still poorly oriented to housing and agriculture, despite the strong contribution of these sectors to the country's economic and social development," said Demba Tignokpa, last Thursday at the opening of the third national council on credit.
The official then urged banks and relevant authorities to "work to level up lending and amend financing structure for sectors enabling inclusive growth, such as housing and agriculture."
Agriculture: These are the nine most attractive sub-sectors for Togolese youth according to the World Bank
In Togo, the nine most profitable agricultural sub-sectors for the youth are pineapple, beekeeping, aquaculture, shea, sesame, soybeans, mushrooms, fonio, and vegetables.
This was revealed during a meeting that regrouped representatives of the World Bank, GIZ, NGOs, Togolese authorities and agricultural actors last Thursday. It was a workshop held to validate a preliminary study to identify sectors with a high market and job potential. The study which assessed 22 sectors overall was led by the World Bank and co-financed by GIZ. It assessed options fostering the youth's economic inclusion and ultimately aimed to improve their revenues and create new jobs.
In opposition to the above-mentioned sectors, cotton, coffee-cocoa, and cashew are the least attractive sectors for the youth. Regarding cotton, while stating that it is Togo's most exported crop, the study says harvesting it is tedious as it is mostly done manually. For coffee and cocoa which are mainly produced for export, these sectors are less attractive for the youth due to frequent fluctuations in their global prices.
The final results of this preliminary study should in addition to identifying all attractive economic sectors in the country also clearly determine key actors' needs for investment and skill development towards improving youth employment and empowerment. This is in a context where the youth represent 58% of the country's active population and also where 60% of jobs are concentrated in agriculture (which contributes 40% of Togo's GDP).
Commenting on the validation workshop, the minister of grassroots development, youth and youth employment, Victoire Tomegah Dogbé said: "The validation of this study's findings brings the opportunity to initiate a dialogue with private and public partners on the importance of better economic inclusion of youth in our various agricultural sectors."
For her part, the World Bank's representative in Togo, Hawa Cissé Wagué, declared: "Supporting profitable value chains will enhance the integration of the supply and demand of labor in the agricultural sector which holds great potential for growth and job creation in Togo."
In this regard, it should be recalled that one of the World Bank's flagship projects aimed at boosting the youth's economic inclusion is the Job Opportunity Project for Vulnerable Youth (EPV) in which the Bretton Woods institution poured XOF9 billion.
Despite the economic growth in Togo, it remains highly under-financed
In Togo, while the growth forecast had been scaled up by the IMF twice this year, the banking sector has contributed very little to this situation. This is one of the reflections that emerged from the recent 3rd national council on credit (CNC).
Further marking the paradox is the country's controlled inflation and budget deficit which meets regional standards.
Though not all gloomy, this situation raises concerns especially for the minister of development planning and cooperation, Demba Tignokpa, who said at the recent CNC: "Looking at new credit provisions, they slumped 8.1% over the first six months of this year, in comparison to the same period in 2018."
However, at end-June 2019, stocks of loans to the economy grew by 4.9% year-on-year, 4.2% at March 31, against 4.1% at the end of December 2018. Similarly, the average interest rate on bank loans reduced to 7.65% on June 30, 2019, against 8.52% at the same date the year before.
These improvements drove the ratio of lending to the economy against GDP to 40%. Regardless, Minister Tignokpa maintains, banks still barely support the economy and sectors like agriculture and housing suffer the most from the situation, only receiving "crumbs" from Togolese banks.
Togo records another successful operation on UMOA-securities market, its first issuance in Q4 2019
Last Friday, Togo successfully proceeded to its first issuance on the regional debt market for this quarter. The country which sought XOF20 billion through the operation was able to mobilize more than XOF47 billion, which represents a coverage rate of almost 237%.
However, according to the UMOA-securities agency, Togo's public treasury will retain only XOF22 billion in line with its spending plans, just like it was the case for previous issuances on this market.
Starting from the first year, from October 7, 2019, to be exact, the securities will produce an annual interest of 6.25%. They will mature on September 7, 2022 (36 months). "Reimbursement (In Fine) will be made on the first workday following the maturity date," the agency notes.
The nominal unit value for the securities was XOF10,000.
Séna Akoda
After Uganda, African Lease and Trade expands its activities to Togo
Danish lease firm, African Lease and Trade, obtained last August 16th the approval to operate in Togo.
Last Thursday, during the third national council on credit, Togo's minister of development planning and cooperation indicated that the firm is "allowed to carry out leasing, payment and factoring transactions."
Situated in Lomé, African Lease Togo is tasked with increasing Togo's leasing and factoring portfolio.
"The snowball effect of leasing on other financial products like venture-capital, factoring, and bank loans, has been acknowledged and it is thus a financial tool of choice for SMEs," the minister declared last June as the law on leasing was adopted by the parliament.
In Togo, as well as in all WAEMU countries, leasing remains weak compared to overall lending to the economy. According to data from the BCEAO, the corresponding figure was almost null in 2017. As for factoring, it is still embryonic in the country, even if some financial institutions such as Sogemef have adopted it this year.
African Lease and Trade is also active in Uganda.
Over the past five years, the proportion of Togolese having an account at a bank and similar institutions increased by 24%
From 2014 to 2019, the proportion of Togolese of more than 15 years old having an account at a bank, a microfinance institution and postal services (such as Eco CCP) soared by 24%, from 50% to 74%. This was disclosed last Thursday by Demba Tignokpa, the minister of planning, at the third session of the National Council of Credit (CNC).
The increase was spurred by dynamism in the traditional banking sector, microfinance, Eco CCP, mobile money, and mobile banking. Let's recall that in 2018, Kossi Tenou, national director of the BCEAO said, "data shows that in Togo, a little more than 2/3 of people of 15 years old and more have access to financial services."
Séna Akoda
Energy Cycle will represent Togo at the EDF Pulse Africa finals in Paris next month
At the penultimate stage of the EDF Pulse Africa Tour hosted in Lomé last Tuesday, Energy Cycle was selected to represent Togo at the finals of the EDF Pulse Africa contest.
The startup, founded by Adakpo Boutamekpo, was running against four other local startups for the position. The jury which selected Energy Cycle was composed of Astria Fataki, chairman of Energy Generation, Marc Vizy, ambassador of France to Togo, Elie Lara Santiegou, Managing Director of BBOXX with EDF, and Urbain Amoussou, founder of the incubator CUBE.
Before Togo, other nations that hosted the EDF Africa Pulse Tour this year were Morocco, Senegal, Ghana, South Africa, and Côte d'Ivoire. The last country where the tour took place was Cameroon (Oct. 3). Finals for the contest will take place in Paris on November 21, 2019.
Séna Akoda