Togo wants to lower domestic debt to 54.6% by 2026

Economic governance

Monday, 08 April 2024 17:08

Togo wants to lower domestic debt to 54.6% by 2026

(Togo First) - Togo hopes to lower its domestic debt by 7 percentage points over the next three years, bringing it to 54.6% in 2026. The ambition was disclosed in the public administration's medium-term debt management strategy.

Last year, Togo’s outstanding public debt stood at CFA3.707 trillion–mostly denominated in CFA. External debt represented 61% (CFA2.276 trillion) and domestic debt 38.61% (CFA1.431 trillion). Over the same period, the country’s debt to multilateral partners stood at CFA864.02 billion (23.3% of the total debt or 15.53% of GDP).

Over the next three years, Lomé will focus on reducing its exposure to domestic lenders. According to the recently disclosed strategy, the country will focus on “increasing external debt to further lower refinancing risk and relying on debt raised in the regional market with maturities ranging from 1 to 10 years to meet financing needs”.

Among its fundraising tools abroad, the State plans to emphasize concessional and commercial external borrowings.

Low Foreign Exchange Risks

Regarding foreign exchange risks, it should be underscored that Togo's debt, primarily denominated in CFA and euros, remains less exposed to exchange rate fluctuations than in 2022.

“The outstanding debt consists of 71.30% in CFA and 14.95% in euros, representing 86.25% non-fluctuating debt and 13.75% debt exposed to exchange rate fluctuations.” However, “the country remains vulnerable to fluctuations in major currencies such as the US dollar and the Chinese yuan,” with exposures of 5.42% for the US dollar and 3.62% for the Chinese yuan (CNY), respectively.

From 2019 to 2023, Togo's debt has increased from CFA2.197 trillion to CFA3.707 trillion, at an average growth rate of 17% per annum.

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REFORMS OVERVIEW

STARTING A BUSINESS (more info)

At the fifteenth position, worldwide, and first in Africa, under the Starting a Business index of the 2020 Doing Business ranking, Togo sustains its reformative dynamics with more reforms….

ENFORCING CONTRACTS (more info)

Compared to some years ago when it was one of the lowest rankers under the Doing Business’ Enforcing Contracts indicator, Togo, leveraging many efforts to improve its business climate, was able to jump significantly on the index in the recent years... .

CONTRACT EXECUTION (more info)

Creation of special chambers of commerce for small debts • Creation of chambers of commerce at the Court of Appeal • Civil and commercial cases now handled by distinct clerks • Establishment of commercial courts in Lomé and Kara • Lawyers and bailiffs now have access to the FORSETI COMMERCIAL platform • A maximum period of 100 days was fixed to settle a commercial dispute .

TRADING ACROSS BORDERS (more info)

In comparison to previous years,Togo has significantly improved its ranking under the“Trading across borders” indicator by adopting multiple reforms that focus mainly on the digitization and reduction in delays, for import and export procedures related to import and export.

In comparison to previous years, Togo has significantly improved its ranking on the “Trading across borders” index by adopting multiple reforms that focus mainly on the digitalization and reduction in delays, for import and export procedures related to import and export.

CONSTRUCTION PERMIT (more info)

After moving from the 133rd to 127th place under the 2020 Doing Business’ construction permit index, Togo intends to reiterate this feat in the coming edition of the global ranking. To this end, it has introduced this year multiple reforms.

GETTING ELECTRICITY (more info)

Over the past two years, Togo’s ranking under the Doing Business’ Getting electricity and water indicator has increased consistently. Owing this performance to multiple reforms aimed at making it easier for businesses to access power and water, Lomé plans to introduce even more reforms this year to keep up its improvements.

REGISTERING A PROPERTY (more info)

Out of all the 'Doing Business’ indicators, Property Registration is where Togo has improved the most since 2018. Indeed, after spending years in the lowest part of this ranking, the country now seeks to beat Rwanda which is the best performer on this index in Africa. To do so, Lomé has been introducing many reforms, with the latest batch implemented this year.

PUBLIC PROCUREMENT (more info)

From professionalization to digitization, through legislative regulations, Togo’s public procurement framework is constantly being modernized. Several reforms have been implemented to improve the sector much to the benefit of the private sector, which is the focus of the National Development Plan.

PAYING TAXES AND DUTIES (more info)

To improve its business environment, Togo introduced some important reforms related to the payment of tax and duties. From the replacement of some taxes to the cancellation of others through exemptions, the country has only one objective: offer the most attractive tax framework to investors and economic operators. To achieve this, the authorities relied on digitization.