After almost a decade of strong growth, the WAEMU region is facing severe challenges from a triple crisis impacting the health, economic and security situations. Both fiscal and monetary policies were relaxed significantly in 2020 to contain the pandemic and support the economy. A gradual fiscal consolidation is expected to start in 2021 and bring back the aggregate fiscal deficit towards the 3 percent of GDP regional ceiling within three years. Growth is expected to recover swiftly in 2021–22 to pre-crisis levels, but the economic outlook is still uncertain.
A technical assistance (TA) mission led by Mr. Fahd Ndiaye, Resident Adviser in Real Sector Statistics for AFRITAC West, visited Lomé from January 27 to 31, 2020, to assess the national accounts for the new base year 2016 with the National Institute of Statistics and Economic and Demographic Studies. (INSEED). These accounts were prepared in accordance with the System of National Accounts 2008 (2008 SNA). The proceedings took the form of a workshop with representatives of the World Bank, the United Nations Economic Commission for Africa (ECA), the African Development Bank (AfDB),the Statistical and Economic Observatory of Sub-Saharan Africa (AFRISTAT), the Commission of the West African Economic and Monetary Union (WAEMU) and the Central Bank of West African States (BCEAO). This report is largely based on the aide-memoire signed with the country and partners.
This paper discusses Togo’s Sixth Review Under the Extended Credit Facility (ECF) Arrangement and Request for Augmentation for Access. Togo’s performance under the ECF-supported program has been broadly satisfactory. While the economic recovery was firming up, it has recently been hindered by the coronavirus disease 2019 pandemic. The macroeconomic outlook is subject to a high degree of uncertainty. Structural reforms are progressing on revenue administration and public financial management. Progress has been made on collection of tax arrears, online submission of customs declarations, and steps toward program-based budgeting. It will be important to implement recommendations from a recent Tax Administration Diagnostic Assessment Tool, address remaining deficiencies in essential customs functions, and bolster voluntary compliance to ensure strong permanent revenue. Togo is amongst the best performers in the improvement of the business environment in recent years. It will be important to pursue such reforms, including strengthening governance, and to implement the measures outlined in the National Development Plan to support strong and inclusive growth. Completing the delayed reforms of the two state-owned banks is paramount to safeguarding financial stability and preventing risks to the state budget.
The economic recovery seems to be taking hold. Inflation stood at 0.6 percent at
end-July 2019. The fiscal consolidation was sustained through the first half of 2019; the
overall fiscal deficit is estimated at 0.2 percent of GDP at end-June 2019. Reforms are
progressing on revenue and customs administration as well as public expenditure
management. While the authorities are committed to privatize the two public banks, the
tenders for both banks were launched with a delay in September 2019 (prior action).
Socio-political tensions have abated but uncertainty remains high, particularly considering
the presidential election scheduled for 2020.