On November 19, 2018, Togo’s national statistics, economic and demographic institute (INSEED) will complete a survey, started last October 18, on living standards of households that benefit from the money transfer program launched by the ministry of grassroot development in 37 selected prefectures.

The survey falls under the Social Nets and Basic Services Project (FSB) launched by the National Agency for Support to Grassroot Development (ANADEB).

According to a statement released in relation to the study, its objective is to “collect data related to education, health, food consumption, housing, sustainable goods, activities and socio-demographic characteristics of targeted household members”.

The survey should also help gather general characteristics of the concerned localities, such as existence, functioning and accessibility of basic social services, and subsequently help proceed to community validation of households’ lists.

Initiated via ANADEB, the money transfer program is part of the social nets and community development project (PDC+). Backed by the World Bank, it aims to reduce poverty in the country’s most vulnerable areas.

Over the next three years, the number of people benefiting from this program should reach 120,000, according to President Faure Gnassingbé.

Séna Akoda

Last Friday, Togo’s parliament adopted a new general tax code. The new regulation replaces a 25-year old one which has been amended multiple times over the years, as new issues emerged, both in the country and worldwide.

Number of taxes imposed slightly reduced

The new code suppresses some taxes which used to make things harder for firms, harmonizes collection with neighboring countries, and encourages those operating in the informal sector to regularize. These aim to boost tax base which is still strongly dependent on consumption (consumption taxes contribute nearly 80% of tax earnings).

The new code not only draws “a distinct line separating tax base regulations and tax procedures, but also emphasizes on taxation guidelines,”  said Sani Yaya, Minister of finance.

Among the new guidelines, there is the “rationalization of the tax system’s structure with new rules to determine earnings per category, reducing corporate tax rate from 28% to 27%, and progressively eyeing 25%, as required by WAEMU”. Around VAT, there is also an indirect tax introduced through “the implementation of a VAT loan reimbursement mechanism, in line with the best practices, and the introduction of a more open synthetic tax for the benefit of SMEs”.

The new code indeed is quite favorable to companies, SMEs especially, as it cuts down many taxes. The latter include taxes on wages, on official vehicles, and taxes complementary to tax on income and wage, surcharge levied on poorly exploited land properties and special tax on drinks manufacturing and sales.

Boosting tax revenues

Through this reform, the government aims to significantly increase tax revenues while developing one of the region’s most attractive business environments.

While tax revenues are still too weak to cover its budget expenses, Togo, by creating a tax revenue office, has succeeded in slightly raising its tax collection level, compared to 2014. According to an OECD study assessing 16 African nations, Togo is the nation that improved the most in terms of tax collection.

Fiacre E. Kakpo

Across the West African Economic and Monetary Union (WAEMU), Togo and Senegal are the countries that diversified their exports the most in 2016. This was disclosed in BCEO’s latest report on external trade.

“Looking at the diversification index for every country of the Union, the report shows…a greater improvement in Senegal and Togo than in the other countries,” the report released last week indicates.   

However, since 2006, Benin, Burkina Faso and Mali are also doing well on the index. Their improvement is attributed to the fact that these nations mostly focus their exports on cotton and gold.

While in Côte d’Ivoire, the index was almost stable over the reviewed period, in Guinea Bissau it fell, as a result of the country’s tendency to focus its exports on cashew. Indeed, over the past five years, the crop contributed on average 95% of all its exports. In the Union, Guinea Bissau is the country with the least diversified exports, thus positioned behind Mali, Burkina and Benin.

It should be noted that in WAEMU, exports diversification is determined through the assessment of the Theil diversification index. This indicator takes into account the volume of goods exported by a given economy and concentration of these exports on a particular product. The lower the values, the more exports are diversified.    

Togo’s index is one, just like Senegal’s. In Mali, it is 2.2; 2 in Burkina; 1.8  in Benin; 1.7 in Niger and 1.2 in Côte d’Ivoire.

Fiacre E. Kakpo

In 2017, the value of goods exported by Togo fell by CF112 billion after rising over the two previous consecutive years.

From CFA644.1 billion in 2016, exports value, excluding transportation, insurance and duty fees, slumped to CFA532.1 billion (-14%) in 2016.

The decrease was spurred by lower re-exportations (-81%) of phosphate (-17.5%), chemical products, clinker and cement, cocoa products, coffee, etc. However it was cushioned by exports of cotton, palm oil, oil products, gold and precious metals.

In parallel, imports reduced as well, just like in 2016, by 14.5%, standing at CFA946 billion. Here, the decrease was mainly due to a slump of equipment goods purchases, from CFA339.4 billion in 2016, to CFA202.1 billion in 2017 (-40%).  

Fiacre E. Kakpo

Last Tuesday, Paykap, mobile money transfer and e-payment solution behind Fricacoin, Africa’s first cryptocurrency, signed various partnership agreements with some ten local microfinance institutions, thus entering the Togolese market.

Under the agreements, the fintech which operates only in Cameroon, Côte d’Ivoire and Canada so far, will create decentralized financial systems (DFS) necessary for its money transfer platform.

In effect, Paykap’s new partners who will become “certified Paykap agents” will act as physical intermediates providing the fintech’s services to populations, against agreed commissions, up to 30% according to credible sources.

According the firm’s CEO, Dalvarice Ngoudjou, a seed fund of CFA3 million will be put in place to ensure the SFDs functionning. This fund will be replenished every time a set alert threshold is reached.

The arrival of the Cameroonian startup in Togo will surely boost financial inclusion and e-commerce in the West African nation. It will help foster fund transfers by the diaspora (valued at almost $500 million last year) as related costs are actually high worldwide.

PayKap Mobile Money is an e-wallet enabling its holder to operate various financial transactions with their bank accounts or other PayKap users, using mobile phones regardless of the networks.  

 Fiacre E. Kakpo

Togo’s power utility, CEET, has launched a tender to rehabilitate and improve its low-voltage and medium voltage distribution networks. The tender will close on December 13, 2018.

Related works are grouped into three distinct lots valued at $638,768 (about CFA366 million). They fall under the Energy Sector Investment and Reform Program (PRISET) which received a $35 million funding from World Bank.

PRISET aims at rehabilitating and improving high-voltage and medium-voltage lines in Lomé, as well as expanding network and installing new connections.

According to the World Bank, the program will help CEET cut its commercial and technical losses but also improve its management while its revenues and financial results as bill payments will increase.

In line with the tender, a preparatory meeting will be held on November 19, 2018 at CEET, after which a visit of various sites is planned.

Togo’s government will order a study on the management of Kara’s new market. This will fall under the Project to Support Reconstruction of Markets and Sellers of Kara and Lomé (PARMCO) which is financed, through a loan and a grant, by the African Development Bank (AfDB).

The study aims to improve the market management and involves a review of how the old market was managed, suggesting necessary changes that can be adapted to the new market.

Moreover, it will assess the mode of allocation and renewal of spots ; admitted sale methods ; determination of technics to store stacked products as well as identification of goods handling methods ; management of sanitization issues, which includes collection and evacuation of waste ; collection of fees to use the market and lead to the revision of rental fees for a given period if needed.

The study will also look at provision of power services ; insurance fee for goods and people and how mobile sellers are handled.

 Séna Akoda