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, clinker) and agricultural (coffee, cocoa, cotton) resources
  • With the only deep-water port in West Africa, has the potential to become a regional hub
  • Public and private investment in infrastructure
  • Structural reforms under way (public finances, banking system, phosphate, and cotton sectors)


  • Heightened socio-political tensions
  • Difficult business climate
  • High levels of poverty and unemployment
  • Underinvestment in education and public health 

Current Trends

Consolidation of Growth

As in 2017, growth in 2018 is expected to continue to reap the benefits of the massive public investment programme during 2012-2016. The reforms negotiated with the IMF on the basis of an ECF programme will, in particular, help to consolidate growth. Activity will continue to be buoyed by the agriculture sector, which represents about 30% of GDP. The dynamism of this sector is attributable to the relatively successful implementation of the National Agriculture and Food Security Investment Programme (PNIASA). Launched in 2011, the PNIASA has, in particular, enabled farmers to adopt technology to improve yields. The ambitions for agricultural development are expected to continue to bear fruit in 2018 thanks to the setting up of the Agricultural pilot project in Kara. In the secondary sector, the start of phosphate mining operations by the Elenilto and Wengfu companies, which could in future generate 5 million tons output per annum, will help the sector to recover. The opening of the cement plant at Awandjelo in July 2017 will take annual cement production to over two million tons from 2018. The transport of goods will continue to contribute positively to growth, despite the expected drop in public investment intended to slow the rise in debt. This sector will, effectively, benefit from efficiency gains resulting from investment in improving the road network and the expansion of the port and airport of Lomé. Better infrastructure, together with the only deep-water port in West Africa at Lomé, will make Togo a preferred destination for private investment in the sub-Region in 2018. The port of Lomé is, however, likely to face emerging competition from the deep-water port of Kribi (Cameroon). Support from the Afreximbank should also help finance infrastructure projects, thus enabling support for the transport and construction sectors to be maintained. Private investment could, however, be hit by the worsening political climate.

In 2018, inflation is expected to rise but will remain moderate, in line with trends in other WAEMU countries.

Efforts to Reduce the Twin Deficits Supported by the International Community

In 2018, the government is expected to continue with the fiscal adjustment begun in 2017 aimed at halting spiraling debt. The tax administration reforms, among which the creation of the Togolese Revenue Authority in 2015, should, in particular, help boost revenues. Above all, capital spending, which sustained growth during the 2012-2016 five-year cycle, should continue to fall back to a more sustainable level. The reforms undertaken and IMF support provided under the ECF worth USD 241.5 million, and by the EU with the payment of budgetary support worth EUR 10 million, could catalyze donations from international financial donors. In 2018, the public debt is expected to confirm the downward trend begun in 2017 and it is hoped that it will fall rapidly below the WAEMU minimum community rate fixed at 70%.

The current account deficit is expected to decline thanks to a fall in the trade deficit. In particular, exports of cement, clinker, and phosphates are expected to rise. The sub-regional context, more favorable overall and recent investments in transport infrastructure will sustain re-exports. The drop in investment spending looks set to bring down the import invoice, thus offsetting the expected rise in oil prices. The transfer balance chiefly transfers from expatriate workers, is likely to continue to make a positive contribution to the current account balance.

The Streets are Increasing Pressure on Faure Gnassingbé's Regime

In power since 2005 and after the death of his father Eyadéma Gnassingbé (president from 1967 to 2005), President Faure Gnassingbé, re-elected for a third term in 2015, still holds all the levers of power and can rest his legitimacy on solid economic performances and improved relations with international financial backers. Enjoying support from the army and the police, Faure Gnassingbé has been able to suppress the growing calls for greater democracy against a background of social tensions which flare up sporadically and are heightened by widespread unemployment and poverty. In summer 2017, protests against the Faure Gnassingbé regime, sometimes violently put down, intensified. Constitutional reform, foreseeing a limit to the number of presidential terms and the introduction of two-round presidential elections, has failed to calm the protestors. Effectively, this non-retrospective text could potentially allow Faure Gnassingbé to stand for two extra terms.

With regard to foreign relations, Togo is benefiting from its WAEMU and ECOWAS membership status to establish itself as a regional hub. Involved in various AU/UN peace missions, Togo is also keen to play a role in improving security on the continent.

Despite the reforms undertaken and notable progress made, the business climate remains inadequate, especially compared with its WAEMU neighbors and competitors, for Togo to establish itself as a regional hub for business.


Coface (01/2018)