Recent data from the BCEAO reveals that the microfinance sector in West Africa, particularly in Togo, experienced growth by the end of December 2023, despite facing some headwinds.

Credit Portfolio Expansion

The outstanding loans granted by Decentralized Financial Systems (DFS) or microfinance institutions in Togo increased by 6.5% in the fourth quarter of 2023 (quarter-on-quarter), marking an absolute increase of 22.5 billion CFA francs. Togo recorded the third-largest increase during this period, behind Senegal (+6.6%) and Benin (+9.5%), and ahead of Burkina Faso (+21.4 billion CFA francs, +6.2%), Côte d'Ivoire (+16.1 billion CFA francs, +2.6%), and Guinea-Bissau (+525.0 million CFA francs, +1.1%). However, there was a decline in Niger (-1.2 billion CFA francs, -8.9%) and Mali (-478.8 million CFA francs, -0.2%).

At the UEMOA level, the outstanding loans increased by 125.3 billion CFA francs, with an average quarterly growth of 5.1%, reaching a total of 2,561.1 billion CFA francs.

Slight Increase in Deposits

On the deposit side, clients' deposits in microfinance institutions in Togo saw a slight increase of 0.5% (+1.8 billion CFA francs in absolute value). This modest growth contrasts with the overall decline in deposits collected by microfinance institutions across the Union. Deposits decreased by 8.8 billion CFA francs (-0.4%) compared to the previous quarter, totaling 2,263.8 billion CFA francs. This quarterly decline was observed particularly in Benin (-6.3%), Côte d'Ivoire (-0.9%), Burkina Faso (-1.2%), Mali (-1.6%), and Niger (-3.1%).

Moreover, as of December 2023, nine microfinance institutions were under provisional administration within the Union, including two in Togo.

Ayi Renaud Dossavi

Moov Africa Togo (MAT) and Togo Cellulaire (TGC) were the WAEMU’s top two mobile internet service providers in 2023. The Togolese telecom watchdog, ARCEP, confirmed this on May 6.

Leading the UEMOA Region

"Both operators' internet connection performances rank them at the top two positions in the region according to the nPerf score," ARCEP noted, citing an analysis of 128 mobile operators worldwide, including 49 in Africa and 16 in the UEMOA region.

MAT and TGC were respectively first and second in the WAEMU (out of 16 mobile operators). They had the best download speeds across the region-31.6 Mbps and 27.8 Mbps, respectively, outperforming their rivals including Moov Africa Benin (23.1 Mbps), Orange Senegal (20.4 Mbps), Orange Côte d'Ivoire (19 Mbps), and Telecel Burkina Faso. (3 Mbps).

Despite their outstanding performance MAT and TGC were far from others like Orange Morocco and EMTEL in Mauritius. "Outside of Africa, MAT and TGC have performance levels well below those of many operators in the European region, which, for example, exhibit download speeds significantly exceeding 100 Mbps, three times faster than the best operator in Togo," ARCEP noted.

Moving Forward

ARCEP commended MAT and TGC for their download speeds and video streaming performance but highlighted areas for improvement in web browsing, upload speeds, and latency.

The regulator "acknowledges the performance of MAT and TGC in download speeds and video streaming as well as the high ranking of MAT and TGC at the UEMOA level," while underscoring that "the quality of experience is much less satisfactory for web browsing, upload speeds, and latency". It thus calls on both operators to "embed this new momentum in a perspective of continuous improvement" to comply with regulatory quality of service requirements and get close to top performers in Africa and worldwide.

Ayi Renaud Dossavi

Togo's new constitution was enacted on Monday, May 6, 2024, by President Faure Gnassingbé. This change stems from a constitutional amendment adopted by the National Assembly on April 19.

The new constitution introduces a transition to a parliamentary system, a pivotal shift in the country's governance. This is accompanied by the creation of the Prime Minister position and the establishment of a State Council.

The official publication of this new constitutional law in the Official Gazette of the Togolese Republic is forthcoming.

Togo recently launched a news simultaneous issue on the WAEMU securities market, seeking to raise CFA30 billion. Set to close on May 10, the operation involves issuing Fungible Treasury Bonds (OAT) and Fungible Treasury Bills (BAT).

According to the tender notice, the BATs have a par value of CFA1 million, with maturities of 91 and 364 days and varying interest rates. The OATs have a par value of CFA10,000, offering a 6.15% annual interest rate over a 3-year period.

These funds will support Togo's balanced budget for the 2024 fiscal year, which amounts to CFA2,179 billion in revenues and expenditures. In April, the country successfully carried out two issues on the regional market.

Esaïe Edoh

There are 126 licensed architects and 58 architecture firms in Togo at the moment. The National Order of Architects of Togo (ONAT) revealed this information last Thursday, May 2, presenting the 2024 Order List to the public and media.

The list catalogs licensed architects authorized to practice within Togo and the UEMOA region. Among the 126 architects, there are 20 women, 106 men, and 12 trainee architects.

Péyébinesso Limazie, ONAT board president, emphasized the importance of this list, claiming it allows clients to choose from the listed professionals for architectural services freely. "Every service seeker should select their architect from this list for project management, supervision, and nation-building. These architects are also authorized to practice within the UEMOA region," said Limazie.

Regular communication about the list reassures the public of the architects' legitimacy, according to the ONAT representative. Non-listed but active architects and architecture firms defy both public trust and existing regulations.

Established by the Togolese government in 1990, ONAT oversees licensed architecture professionals, ensuring adherence to professional and ethical standards.

Ayi Renaud Dossavi

Togo's National Independent Electoral Commission (CENI) announced the provisional results of the April 29, 2024 legislative elections, revealing a dominant victory for the ruling Union for the Republic (UNIR). UNIR secured 108 out of 113 seats in the National Assembly, claiming nearly 96% of the available seats. The opposition parties collectively won only 5 seats, with two going to the Alliance of Democrats for Integral Development (ADDI), and one each for the National Alliance for Change (ANC), Dynamic for the Majority of the People (DMP), and Democratic Forces for the Republic (FDR).

The announcement was made last Saturday evening at the CENI headquarters in Lomé and broadcast live on national television. Voter turnout was estimated at 61%, with 2,565,623 voters out of 4,203,711 registered.

These elections coincide with a significant constitutional reform shifting Togo from a semi-presidential to a parliamentary system. This change grants the Prime Minister, now holding executive power, to the leader of the majority party in the National Assembly, currently President Faure Gnassingbé of the UNIR party.

While the opposition has raised concerns about irregularities, including alleged ballot stuffing and fraud, international observers have praised the elections as free and transparent. CENI's president encouraged parties with grievances to seek legal recourse, pledging to address any issues encountered during the election. The final results are pending validation by the Constitutional Court.

Fiacre E. Kakpo

The BCEAO injected CFA511 billion at a 5.5% rate into Togolese banks this week as part of its routine liquidity operations. A total of CFA7,400 billion was granted in the auction on April 30, 2024, with 110 financial entities from the eight WAEMU countries participating. Ivorian banks received the most: CFA1,741 billion. They were followed by Burkinabe banks which obtained CFA1,312 billion.

These liquidity injections are crucial for the region's economies, helping banks maintain adequate reserves to meet client needs and short-term obligations.

However, the cost of acquiring these funds presents challenges for banks. While the 5.5% rate has been consistent since the first quarter, it is notably higher than the 3.2% average in December 2023, indicating increased financing costs that could impact credit dynamics in the Union. Faced with these higher rates, financial institutions have adjusted their lending offers slightly to protect their margins. This rise in financing costs is expected to keep the cost of accessing financing in the regional market high for states, limiting budget flexibility.

Fiacre E. Kakpo

It is a first for the Togo-based holding. It achieved the record amidst challenging monetary conditions in key markets like Nigeria and Ghana.

According to the 2023 certified financial results, the Ecobank Group reported a pre-tax profit of $581 million, up 8% year-on-year. This was supported by a net income of nearly $2.1 billion, up 11%.

For the first time since 2015, the group's revenues exceeded $2 billion. However, currency fluctuations in Nigeria and Ghana limited the performance, as the naira and cedi weakened against the dollar. At constant exchange rates, pre-tax profit would have increased by 34%, and net income by 31%.

The revenue growth was driven by a 15.3% rise in net interest income, from $1.014 billion in 2022 to $1.169 billion in 2023. Non-interest income, including fees and commissions, investment income, trading revenue, and foreign exchange gains, also grew modestly by over 5%.

Profit was impacted by significant asset losses, as provisions for financial asset impairment increased by 66.7% to $330 million. Loan losses surged by 1405% to over $145 million, from about $10 million in 2022. The losses were more pronounced in Nigeria, where impairments rose by over 80%.

As a result, the bank's total assets declined for the first time(-6%) since at least 2019, partly due to lower loans and advances to customers, which made up 39% of total assets. As of December 31, 2023, the total gross loans and advances amount to $11.062 billion, with the bank estimating impairments on these loans at $519 million. This represents a 4.2% decrease compared to the $11.003 billion in the previous year.

The financial report analyzed by the Ecofin Agency reveals that loan portfolio quality remained relatively stable, with the non-performing loans (NPL) ratio slightly increasing to 5.4% in 2023, compared to 5.2% in 2022.

Deposits slumped by about 4%, while equity plummeted by 14.4%, from $2.027 billion in 2022 to $1.734 billion in 2023. The fall is mainly attributable to currency conversion losses and asset value adjustments, in a challenging operational environment marked by unfavorable market conditions, economic challenges, or significant fluctuations in exchange rates.

Despite the challenges, Ecobank created value for shareholders, with its tangible return on equity increasing by 3.8 percentage points to 24.9%..

Fiacre E. Kakpo

In 2023, the number of French volunteers in Togo reached a record high of 2,113. This included 1,988 short-term missions, 72 civil service assignments, and 53 International Solidarity Volunteers, according to the France Volontaires (FV) 2023 report.

From one year to the other, the number of volunteers deployed shot up by 176% (766 in 2022). According to FV, the surge reflects "a clear evolution in the dynamics of International Volunteering and Solidarity Exchanges (VIES)..." This illustrates the "effective resumption of French mobility to Togo" after reduced mobility due to COVID-19 restrictions”.

"Togo remains a welcoming destination for French individuals eager to engage in international solidarity," FV wrote in its report.

The reported figures are likely underestimated, as FV's Volunteer Spaces estimate that the 2023 numbers represent only a small portion of the actual number of volunteers in Togo that year.

Ayi Renaud Dossavi