Togo's socio-political situation has been fairly encouraging following the organization of legislative elections accepted by various political forces in the country in October 2007 and the formation of a consensus government in December 2007.  However, the situation remains fragile with a highly impoverished population, which is impatient for its conditions to improve. The country is therefore speeding up ongoing reforms and calming down the population, which is moreover, seriously affected by the rise in the prices of major consumer goods.   However, owing to the improved political situation, the country has gradually returned to path to growth. In 2006, the real growth rate reached 4.1% before falling back to around 2.1% in 2007 due, in part, to many power outages and hikes in oil prices, which seriously disrupted productive activities. The country also experienced some serious flooding in 2007 and 2008 which destroyed road infrastructure and several hectares of plantations. Consequently, the real growth rate in 2008 was not expected to exceed 1% with an inflationary rate which could reach an annual average of 10%.

Development Policy

The country’s two principal sources of wealth, cotton and phosphates, are experiencing difficulties mainly related to governance problems, the obsolescence of productive machinery and supply difficulties in respect of energy.   With regard to the business climate, though Togo has great potential because of its geographical position and its port which is one of the deepest in the West African area, many constraints are preventing the emergence of a strong private sector: an opaque institutional framework, a judicial environment which is ill-adapted to the business climate. Most of the texts require updating. Doing Business 2008 ranks the country 156th out of 178 countries, behind Côte d’Ivoire (155th) and Cameroon (154th).

Over 61% of Togo’s population lives below the poverty line. The incidence of poverty is very high in rural areas where three out of every four households are poor. The situation is exacerbated by the population's undernourishment; with some 64.2% of the poor being undernourished. The poor are also significantly disadvantaged with regard to access to education, health, electricity and drinking water.  The Human Development Index fell from 0.51 in the early 90s to 0.495 in 2006. An analysis of the country’s situation with regard to the MDGs clearly shows that none of the goals will be achieved by 2015 unless something is done.

Bank Group Strategy

Since July 22, 2008, Togo is no longer under Bank Group sanctions. The Bank's boards of directors have approved Togo’s eligibility for the Fragile States Facility (FSF) and a grant of UA 14.57 million under the Arrears Clearance Window of the FSF to clear Togo’s arrears owed to the Bank. An Interim Country Strategy Paper (I-CSP) is being finalized and will be presented to the boards in January 2009.  Furthermore, a recent AfDB mission to Lome is preparing a Governance Reform Support Programme, with a ‘food security’ component. This programme will also be submitted for consideration by the boards in January 2009, following approval of the I-CSP.