Country Risk Rating

A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behavior. Corporate default probability is high. - Source: Coface

Business Climate Rating

The business environment is difficult. Corporate financial information is often unavailable and when available often unreliable. Debt collection is unpredictable. The institutional framework has many troublesome weaknesses. Intercompany transactions run major risks in the difficult environments rated C.


  • Mineral (phosphate, limestone, and clay transformed into clinker) and agricultural (coffee, cocoa, cotton) resources
  • With the only deep-water port in West Africa (Lomé), Togo has the potential to become a regional hub
  • Public and private investment in infrastructure
  • Structural reforms underway (public finances, banking system, phosphate, and cotton sectors)
  • WAEMU and ECOWAS member
  • External debt mainly on concessional terms


  • Heightened socio-political tensions
  • Difficult business climate
  • High levels of poverty and unemployment
  • Inadequate education and public health infrastructure
  • Inadequate banking sector soundness; high NPLs ratio (especially in public banks)

Current Trends

The National Development Plan will boost growth through investment

Growth will remain dynamic in 2020, driven by private consumption and investment (both domestic and foreign). Investment will be stimulated by the 2018/2022 National Development Plan (NDP), of which the primary objective is to transform the country into a regional hub for logistics, finance, and tourism, but also to modernize the agricultural, extractive and manufacturing sectors and to reduce poverty. With two-thirds of the funding coming from private investors, the plan includes infrastructure projects aimed at both transport development – through improvements to the port of Lomé as well as the road and air transport network – and the extractive sector. Investment should also benefit from Togo's decision to join the G20 Compact with Africa in order to attract foreign private investment and improve the business environment. Private consumption, which represents almost 80% of GDP, will be stimulated by the social component of the NDP (including the creation of 500,000 jobs), but above all by increased agricultural yields, mainly in cotton and cocoa crops. Production in the sector, which employs 60% of the population, is set to benefit from the impact of the National Programme for Agricultural Investment and Food Security (PNIASA), carried out between 2012 and 2015, while Togo's New Cotton Company expects cotton production to increase by 30% in 2020. Public consumption is expected to decline slowly, as the country is committed to an IMF program, although the upcoming presidential elections in March 2020 may exert upward pressure. Efforts in the agricultural and extractive sectors, as well as the expected recovery in some trading partners, notably Niger, should allow a net positive contribution to growth from the trade balance, with export growth exceeding the more contained increase in imports. Togo's membership of WAEMU should keep inflation stable at around 2%, despite inflationary pressures on the demand side.

Consolidation of public and external accounts

On the recommendation of the IMF, which granted the country a three-year Extended Credit Facility of USD 244.8 million in 2017, the government is expected to further consolidate the public accounts in 2020. After increasing significantly in 2019, the fiscal deficit should come down as a result of reduced public spending, as the government looks to scale back its own contribution to NDP financing in favor of private investors. The upcoming presidential elections in March 2020 could slow the pace of budgetary efforts. According to the 2019/2021 multiannual budget plan, tax revenues are expected to increase by 7.9% thanks to the modernization of the tax administration and a wider tax base. The budget deficit is to be financed by borrowing within WAEMU. Debt (27% foreign), remains on a downward trajectory and should fall within the WAEMU convergence criteria (70% of GDP) in 2020.

The current account deficit is expected to narrow as a result of the reduction in the structural trade deficit (about 20% of GDP). Export growth, lifted by the strength of the extractive and agricultural sectors, will outperform import growth, which will be lower due to reduced government purchases of capital goods. Improvements to the country’s transport infrastructure (specifically the road network and the port of Lomé) should lead to an increase in re-export activities. Remittances from expatriate workers represent 6.8% of GDP. Foreign direct investment (more than 3% of GDP, net) related to the launch of the NDP is expected to be the main counterpart to the current account deficit.

Socio-political instability but continuity of power

The 2018 parliamentary elections, which were boycotted by the coalition of opposition parties (C14), strengthened the position of Faure Gnassingbé, who has held power since 2005 after succeeding his father (himself President from 1967 to 2005). The boycott followed demonstrations since 2017, in some cases violently repressed, calling for constitutional reforms and changes to the electoral code. In May 2019, the Togolese parliament finally passed a constitutional amendment limiting the number of consecutive presidential terms to two, but without retroactive effect. Faure Gnassingbé will therefore be able to stand for re-election in the next elections, scheduled for March 2020, during which political instability is expected to increase, despite the fact that the coalition is weakened by internal divisions. Clashes would have a harmful effect on the private investment, particularly foreign investment needed to finance the NDP, and would hinder the development of tourism. In general, socio-political tensions at the national level and regional security problems (terrorist acts in neighboring countries) will weigh on the business environment. The government’s efforts have enabled the country to move up 40 places in the Doing Business 2020 ranking (97th position). Nevertheless, governance remains very poorly ranked by the World Bank. As a member of various UN and AU peace missions, Togo also wishes to play a role in improving security on the continent.


Coface (01/2020)