Togo Economic Outlook
- The economy expanded 5.5% in 2015, but funding of infrastructure increased government debt to 62.5% of GDP in 2015, up from 46.0% in 2012.
- The time needed to legally set up a business fell from 38 days in 2012 to 19 in 2013, and 10 in 2014 and 2015.
- The country’s land tenure system has not adjusted to the growth of urban areas and trade and an average 288 days are needed for property transactions, making them the slowest in Africa.
Major infrastructure investment begun in 2010 continued more slowly in 2015. Erratic rainfall undermined buoyant agriculture and the economy grew a more modest 5.5%, down from 5.9% in 2014. Agriculture was the main source of economic expansion in 2014, contributing 3.7 percentage points of GDP growth, though this fell by 0.7 points in 2015. Phosphates, clinker and cotton production should improve in 2016, and the Scanmines limestone and cement company is expected to do well. Continuing government reforms to increase competition in hotels, electricity, banks and telecommunications, along with support for agriculture and extractive industries, should drive growth, forecast at 5.9% in 2016 and 6.0% in 2017.
Funding of public investment over the past five years has contributed to growth but also increased public debt, from 46.0% of GDP in 2012 à 62.5% in 2015. Interest on internal debt in 2015 was put at XOF 26 billion (CFA francs), at least three times more than on external debt, and the International Monetary Fund (IMF) says Togo risks further accumulation of public debt. Government revenue has grown significantly in the past two years due to better collection by the new national tax office (OTR). Revenue increased 13.6% in 2014 and 4.8% in 2015 to reach XOF 480.4 billion (20.2% of GDP). Due to the creation of a body to fight corruption and related crimes (la Haute autorité de prévention et de lutte contre la corruption et les infractions assimilées) was set up in 2015. As a result, Transparency International’s Corruption Perceptions Index ranked Togo 19 places higher than in 2014: 107 out of 168 countries.
Some 2.8 million people live in Togo’s towns and cities, a 160.0% increase between 1990 and 2014, representing 39.5% of the total population in 2014. This is up from 28.6% in 1990 and is expected to reach 50.0% by 2030. The steady decline of the share of industries and services in GDP over the past 30 years reflects the meagre structural transformation of the economy. The country’s land tenure system requires 288 days for property transactions, making it the slowest in Africa (the sub-Saharan average is 58 days). The cost of energy and communications since the 1990s, as well as market weakness and limited access to funding, are serious obstacles to the growth of towns and cities and to the country’s structural transformation. These constraints, which must be removed, stem mostly from a land tenure system that has failed to adapt over the past half-century to the growth of urban areas and market demands.