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Togo: Staff Report for the 2015 Article IV Consultation-Informational Annex

Author(s):
International Monetary Fund. African Dept.
Published Date:
November 2015
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Relations with the Fund

(as of August 31, 2015)

Membership Status: Joined August 1, 1962; Article VIII

General Resources Account:

SDR million% of Quota
Quota73.40100.00
Fund holdings of currency72.8499.24
Reserve Position0.580.79

SDR Department:

SDR million% of Quotag
Net cumulative allocation70.33100.00
Holdings53.4676.01

Outstanding Purchases and Loans:

SDR million% of Quota
ECF Arrangements80.24109.32

Financial Arrangements:

Approval DateExpiration DateAmount Approved (SDR million)Amount Drawn (SDR million)
ECF1Apr 21, 2008Jul 26, 201195.4195.41
ECF1Sep 16, 1994Jun 29, 199865.1654.30
ECF1May 31, 1989May 19, 199346.0838.40

Formerly PRGF.

Formerly PRGF.

Projected Payments to the Fund2

(SDR million; based on existing use of resources and present holdings of SDRs)

Forthcoming
20152016201720182019
Principal5.817.3219.0817.7611.04
Charges/Interest0.000.010.010.010.05
Total5.8117.3319.0917.7711.08

Implementation of HIPC Initiative:

I. Commitment of HIPC assistanceFramework
Decision point dataNov. 2008
Assistance committed
By all creditors (US$ Million)1282.00
Of which: IMF assistance (US$ million)0.32
(SDR equivalent in millions)0.22
Completion point dateDec. 2010
II. Disbursement of IMF assistance (SDR Million)0.22
Assistance disbursed to the member0.08
Interim assistance0.14
Completion point balance0.01
Additional disbursement of interest income2
Total disbursements0.22

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts cannot be added.

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts cannot be added.

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

Safeguards Assessments

The Central Bank of West African States (BCEAO) is a common central bank of the countries of the West African Economic and Monetary Union (WAEMU). The 2013 assessment of the BCEAO was completed on December 13, 2013. The assessment found that the bank continued to have a strong control environment and has, with the implementation of the 2010 Institutional Reform of the WAEMU, enhanced its governance framework. Specifically, an audit committee was established to oversee the audit and financial reporting processes, and transparency has increased with more timely publication of the audited financial statements. The assessment also identified some limitations in the external audit process and recommended that steps be taken to ensure the adequacy of the mechanism through selection of a second experienced audit firm to conduct joint audits.

Exchange Arrangement

Togo, a member of the WAEMU, accepted the obligations under Article VIII, Sections 2, 3 and 4 of the Fund’s Articles of Agreement as of June 1, 1996, and maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions. The WAEMU’s exchange regime is a conventional peg to the euro.

The union’s common currency, the CFA franc, had been pegged to the French franc at the rate of CFAF 1 = F 0.02. Effective January 12, 1994, the CFA franc was devalued and the new parity set at CFAF 1 = F 0.01. Effective December 31, 1998, the parity was switched to the euro at a rate of CFAF 655.96 = €1.

Aspects of the exchange system were also discussed in the report “WAEMU: Common Policies for Member Countries” (Country Report No. 14/84).

Joint World Bank-IMF Work Program, 2015-16

The IMF Togo team led by Ms. Sancak (mission chief) held a discussion with the World Bank Togo team led by Mr. MacWilliam (mission chief) on August 12, 2015, to identify macro-critical structural reforms and coordinate the two teams’ work for the period September 2015-December 2016. Continuous collaboration is taking place, including coordination of timing of missions.

The teams agreed that Togo’s work program should focus on policies and structural reforms to promote sustainable growth through structural transformation and to maintain macroeconomic and financial stability. In this regard, there would be need to reset fiscal policy to ensure fiscal and external sustainability, enhance public financial management, strengthen financial sector stability, and promote financial development. To increase potential growth there is also a need to implement reforms in other key areas such as energy and telecommunications, and to continue improving the business climate and the efficiency of public investment projects. Areas of close collaboration between the Fund and the Bank include the financial sector, debt policy, and poverty analytics and policies. Details on division of labor in other areas are presented below.

TitleProductsProvisional Timing of missionsExpected Delivery Date
A. Mutual information on relevant work programs
World Bank work program in the next 12 monthsLending/ Grants:
Community Development Project and Social Safety NetsOngoing
Education for AllOngoing
Emergency Infrastructure Rehabilitation & Energy ProjectOngoing
Financial Sector and Governance ProjectOngoing
Private Sector Development ProjectOngoing
Agriculture Sector ProjectOngoing
West Africa Productivity ProgramOngoing
Emergency Urban Rehabilitation Additional FinancingOngoing
Integrated Disaster and Land Management ProjectOngoing
Infrastructure Additional FinancingOngoing
Community Development /Youth EmploymentOngoing
WARCIP Broadband connectivityOngoing
DPO VI—Economic Governance and Growth CreditNovember 2014
Maternal and Child Health operationOngoing
Economic and Sector Work:
Economic Governance Diagnostics
(Strengthening public investment and public financial management)May 2016
PEMFARJuly 2016
Technical assistance/other analytical:
Promoting Public-Private PartnershipsMarch 2016
ICT Strategy DevelopmentJune 2015
Mineral Rights Cadastre ReformMay 2016
Post- basic EducationJune 2016
Statistical Capacity BuildingMay 2014
Others: Country Partnership StrategyMarch 2016
Systematic Country DiagnosticOctober 2015
IMF work program in the next 12 months
Technical assistance:
Debt Management (MCM)October 2015October 2015
Public Financial Management (Elaboration of DPBEP & DPPD) (FAD)November 2015November 2015
Tax Administration (FAD)November 2015December 2015
Government Finance Statistics (STA)February 2016February 2016
Regional Workshop on SFP (AFRITAC West)February 2016February 2016
Tax Administration (FAD)November 2016December 2016
B. Requests for work program inputs
Fund requests to Bank
Bank request to FundTechnical support and collaboration in the areas of public finance management and the banking sector.
C. Agreement on joint products and missions
Joint Bank-Fund products in the next 12 monthsJoint LIC Debt Sustainability AnalysisSeptember 2015

Statistical Issues

1. Data provision is broadly adequate for surveillance, but weaknesses in the quality and timeliness of data hamper staff’s analysis.

  • National accounts: are compiled based on very limited information, with only few surveys and scarce data on primary agriculture and private sector services. National accounts are published with considerable delays and are only available on annual frequency. Base year for constant price GDP is 2007.
  • Price statistics: Base year for CPI index is 2008, with coverage of only the capital city.
  • Fiscal sector statistics: Government finance statistics are derived from a weak accounting and reporting system. There are often large discrepancies between the transactions that yield net lending/borrowing and its financing, and large inconsistencies between stock and flow data. Also, there are significant delays in compilation and dissemination, and limited or no data on public entities outside of (budgetary) central government.
  • Balance of payments statistics: Data are reported on an annual frequency with long lags. Data corresponding to 2012 were published in February 2015, and the balance of payments data for 2013 were published in June 2015.
  • Monetary data: are reported by the BCEAO and sent to AFR within 45 days.

2. The country has participated in the General Data Dissemination System (GDDS) since November 2001. Metadata on the national statistical system, including plans for improvement posted to the Fund’s Dissemination Standard Bulletin Board, were last updated in December 2004.

National accounts and consumer price index (CPI)

3. Like other West African Economic and Monetary Union (WAEMU) member states, Togo embarked in late 2002 on implementing the System of National Accounts 1993 (1993 SNA), using the ERETES software. The national accounts for the new base year (2007) were completed in 2012. In 2013 the Direction Générale de la Statistique et de la Comptabilité Nationale (DGSCN) published the National Accounts GDP numbers covering the period 2000-2007. Respectively, in 2014 and 2015 the 2009 and 2010 National Accounts GDP numbers were finalized and published. The national statistics institute, INSEED (Institut National de la Statistique et des Etudes Economiques et Démographiques), established in February 2015, is currently executing a plan, with the support of AFRITAC West, to clear the delay in the elaboration of National Accounts corresponding to the period 2011–15 by 2017. Given that limited resources are available plans to build quarterly NA have been cancelled to prioritize the work on closing the delays in the publication of National Accounts, and on the transition of National Accounts to SNA 2008.

4. The CPI basket was revised in 2010. The WAEMU commission, supported by AFRISTAT and the BCEAO, launched a revision of the harmonized CPI basket in the region in 2008. The reform included expanding CPI surveys, and updating the weights of various sub-components to reflect consumption habits. In line with WAEMU directives the INSEED is constructing a consumer price index with national coverage. The collection of the first observations started in January 2015, and the index will be published in January 2016 when the first 12 month variation becomes available.

External sector statistics

5. Balance of payments statistics and international investment position data are compiled based on bank reports, a survey of enterprises, and customs data. Statistics are compiled following the principles of the 6th balance of payment manual. The Central bank continues its efforts for a better coverage of informal trade notably with the sub-regional unit for the reconciliation of intra-WAMU trade.

Government accounts and public debt data

6. The Government finance statistics are compiled by the Ministry of State from customs, tax, and treasury departments and consolidated in the form of government financial operations tables (TOFE). The new WAEMU budget nomenclature now permits the economic and ministerial classification of expenditure, with functional classification under development. The monthly TOFE is based on a mixture of administrative and accounting data and is sent to AFR with a two-month lag. The debt database weakened since the HIPC completion point at end 2010. Government recognition of old domestic arrears and their liabilities has further complicated the compilation of a reliable and consistent database. Only budgetary central government data are reported for publication in the Government Finances Statistics Yearbook (GFSY), government finance high frequency data are not reported for publication in the IFS. In the context of the 2013 Article IV consultation, with assistance from STA, the authorities established a bridge table allowing transposition of TOFE data, which is based on the 1986 Government Finance Statistics Manual (GFS86), to the 2001 Government Finance Statistics Manual (GFSM01). An updated table on Government Financial Operations for 2011-20 based on GFSM01 principles is presented in Appendix III.

Monetary statistics

7. Monthly data for Togo, along with data for other members of the West African Monetary Union are regularly disseminated by the Central Bank of the West African Monetary Union (BCEAO) with a lag of about two months. Data on lending and borrowing rates, charged by domestic banks, are compiled and available monthly.

Togo: Table of Common Indicators Required for Surveillance(as of August 2015)
Economic VariableDate of latest observationDate receivedFreque ncy of Data2Frequency of Reporting2Publication
Exchange RatesJuly 2015August 2015MMPublished
International Reserve Assets and Reserve Liabilities of the Monetary AuthoritiesJune 2015August 2015MMPublished
Reserve/Base MoneyJune 2015August 2015MMPublished
Broad MoneyJune 2015August 2015MMPublished
Central Bank Balance SheetJune 2015August 2015MMPublished
Consolidated Balance Sheet of the Banking SystemJune 2015August 2015MMPublished
Interest RatesJune 2015July 2015MMPublished
Consumer Price IndexJuly 2015August 2015MMPublished
Revenue, Expenditure, Balance and Composition of Financing – General Governmentn.a.n.a.n.a.n.a.Not published
Revenue, Expenditure, Balance and Composition of Financing– Central GovernmentJune 2015July 2015MMPublished
Stocks of Central Government and Central Government–Guaranteed DebtJune 2015July 2015MMNot published
External Current Account BalanceDecember 2013June 2015AOMPublished
Exports and Imports of Goods and ServicesDecember 2013June 2015AOMPublished
GDP/GNPDecember 2012August 2013AOMNot published
Gross External DebtJune 2015July 2015MMNot published
International Investment Position3December 2013June 2015AOMPublished

The general government consists of the central government (budgetary funds, extra-budgetary funds, semi-autonomous government agencies and institutions, and social security funds) and state and local governments.

Monthly (M), Quarterly (Q), Semi Annually (SA), Annually (A), on mission (OM).

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

The general government consists of the central government (budgetary funds, extra-budgetary funds, semi-autonomous government agencies and institutions, and social security funds) and state and local governments.

Monthly (M), Quarterly (Q), Semi Annually (SA), Annually (A), on mission (OM).

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

2When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

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