Driven in particular by the agricultural sector, the extractive industry and trade, Togo recorded strong growth of 5.3% in 2019, against 4.9% in 2018, without inflationary pressure, with an estimated inflation rate of 0.7%. Togo owes this performance to the government’s policy of improving the business climate. This policy is one of the strategic axes of the National Development Plan of Togo (PND 2018-2022) launched in 2018. The PND aims in particular to make the country a logistics hub of excellence in the sub-region. However, forecasts predict a significant slowdown in growth in 2020, due to the Covid-19 pandemic.
The economic dynamic
Like other countries in the WAEMU, agriculture, mining and trade are the pillars of the Togolese economy. The Togolese economy has been dynamic over the past two years after a slowdown in 2017. The economic growth rate rose from 4.4% in 2017 to 4.9% in 2018 before reaching 5.3% in 2019.
This economic dynamism is the result of the strength of cotton production and phosphate extraction, of which the Republic of Togo is the fifth largest producer in the world, as well as the good performance of the tertiary sector. The country owes the acceleration of its economic growth to the various works carried out in the buildings and public works sector, namely the extension of the port of Lomé and the Lomé International Airport.
However, in 2020, Togo’s economy will not be spared the impact of the COVID-19 pandemic. According to IMF forecasts made in April 2020, the country’s growth will slow to 1.0%.
The importance of the tertiary sector
The tertiary sector remains the engine of growth of the Togolese economy with an estimated contribution to GDP of 61.5% in 2019, followed by the primary sector. The tertiary sector grew by an average of 6.3% over the 2014-2019 period, while the primary sector grew by 3.8%. The importance of the tertiary sector results in particular from the weight of port and airport activities in Togo’s economy. In addition, the sector has benefited from significant investments in recent years due to the improvement in the business climate.
The National Development Plan (PND) 2018-2022
After successive socio-political crises, the Togolese Republic adopted structural reforms in 2006 to revitalise its economy and improve the living conditions of its population. The government has implemented development policies including the Strategy for Accelerated Growth and Employment Promotion (SCAPE) covering the period 2013-2017, thanks to which the poverty rate fell from 58.7% to 55.1% between 2011 and 2015. Following the SCAPE, the government launched the National Development Plan (PND) for the period 2018-2022. This development plan is underpinned by the ambition to accelerate growth, reduce poverty and inequality and preserve the environment. The implementation of the PND is based on three strategic axes. These are
- The establishment of a logistics hub and a qualified business center in the sub-region
- The development of agricultural and manufacturing processing centers as well as extractive industry centers; and
- The consolidation of social development and the strengthening of inclusion mechanisms.
The structural reforms of the PND should raise Togo’s GDP growth to 7.6% by 2022. They should also enable the country to move up 10 places in the global Human Development Index (IDH). Indeed, the PND mainly aims to develop human potential through various programs such as vocational training, social protection, corporate social responsibility, and continued improvements in general education, health, nutrition, energy services, and water and sanitation.
The results of Togo’s efforts have helped revitalise its economy in recent years and the outlook remains favorable in the medium term despite an expected slowdown in 2020 due to the impact of COVID-19. However, growth is expected to accelerate from 2021 onwards.
For more information on Togo’s economic situation, download the country briefing note prepared by the UMOA-Titres, click here.
Source : Togo country Information note / UMOA-Titres – September 2020
