Togo WT/TPR/S/48
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I. THE ECONOMIC ENVIRONMENT
(1) MAJOR FEATURES OF THE ECONOMY
1. Covering 56,800 km2, Togo is a coastal country of West Africa with more than 4 million
inhabitants.  The proportion of the total population living in towns more than tripled between 1970
and 1995 (Table I.1).  Nevertheless, except for the capital, Lomé, all the Togolese towns (including
Sokodé, Kpalimé, Atakpamé and Lama Kara) have less than 100,000 inhabitants apiece.
Table I.1
Basic social data, 1970-1995
Indicators 1970 1990 1995
Population (millions) 2.0 3.5 4.1
Urban population (percentage) 13 29 31
Population growth rate (percentage) 2.5 3 3
Infant mortality rate (for 1,000 births) 153 a88 88
Life expectancy 44 50 56
Public health expenditure (as
percentage of GDP)[…] 1.7 2
Public education expenditure (as
percentage of GDP)[…] 6.2 6.5
Illiteracy (as percentage of the
population)84 57 48
      - Men […] 44 33
      - Women […] 69 63
Human development indicator
(HDI rank/total number of countries)[…] 145/173 147/175
[…] Not available
a1965 figure (110 in 1980).
Source:  World Bank, various publications;  United Nations Development Programme,  Human Development Report , various issues.
2. With a per capita GDP of about US$330 in 19971,  Togo is one of the least-developed
countries.  The economy is essentially dependent on agriculture (cotton, cocoa, coffee and food crops)
which provides about 40 per cent of the GDP, three quarters of the jobs and more than half total
earnings for the export of goods.  Cotton supplies about one quarter of these earnings.  Togo is the
world's fifth producer of calcium phosphate and has large reserves with a high phosphate content.
The Togolese subsoil also contains marble (which is being quarried) and iron ore (which is notworked).  The mining sector supplies more than one third of the earnings from the export of goods,
phosphate contributing about one quarter of the total.  The manufacturing sector represents less than
10 per cent of GDP (Chart I.1).  It is essentially orientated towards the domestic market.  Food
processing is the most important branch in the sector, but Togo also has a modest textile industry, a
small chemical industry and a steel manufacturing unit.
                                                     
1 World Bank (1998).WT/TPR/S/48 Trade Policies Review
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1992Percentage, in constant 1978 prices
Including crop and animal production, forestries, fishing and hunting. 
      IMF (1998), Togo: Selected Issues
, IMF Staff Country Report No. 98/21.Chart I.1
Sectoral distribution of GDP, 1992 and 1996
Services
48.8Mining
5.8 
Total:  CFAF 214.0 billionAgriculturea 
36.11996
Manufacturing
sector
9.3
a
Source :Services
43.7Mining
6.7Agriculturea  
41.5
Manufacturing
sector 
8.0
Total:  CFAF 241.2 billion
3. The tertiary sector originates a significan t proportion of GDP (about 44 per cent in 1996)
mainly as a result of the traditional importance of transit operations through the port of Lomé, from
which an important road network leads to the land-locked countries to the north of Togo.  Thisinfrastructure and the structure of import duties have encouraged the re-export of products such as
alcoholic beverages, "wax" fabrics and edible oils.
4. The Togolese economy is characterized by the coexistence of a modern sector and a
traditional one.  Informal units represent an important outlet for the goods and services supplied by
the industrial enterprises of the modern sector;  these units also act as subcontractors for certainmodern enterprises.  The informal sector is the main supplier of jobs in Togo:  in 1997, this sector
(excluding agriculture) employed 396,000 persons.  The informal sector represents about 33 per cent
of the value added of the manufacturing sector, 52 per cent of that of services and 37 per cent of that
of trade.  Informal trade with Nigeria and Ghana occupies a large number of small merchants.  In
1990, about 15.2 per cent of exports and re-exports and 14.5 per cent of imports were informal.
During the crisis of the years 1991-1993, the informal sector developed considerably:  many
employees from the formal sector, including civil servants whose salaries had not been paid, hadrecourse to this sector.
5. Most of the workers in the informal sector are trained by means of apprenticeship outside the
official circuits of the vocational schools, colleges and technical schools.
2  The workers in the
informal sector are financed by institutions of the non-structured mutualist type.  The Groupement
                                                     
2The authorities are thinking of organizing the transmission of this know-how through training courses
established by the Ministry of Technical and Vocational Training and seminars and workshops organized by theGroupement Interprofessionel des Artisans du Togo (GIPATO), the Chambre Consultative des Métiers, trade
unions and non-governmental organizations (NGOs).Togo WT/TPR/S/48
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Interprofessionel des Artisans du Togo (GIPATO) plays a part in financing supplies, the Coopérative
d'Epargne et de Crédit Artisan (CECA) mobilizes savings and grants loans, and the Fédération des
Unions de Coopératives d'Epargne et de Crédit (F UCEC) and the Coopératives d'Epargne et de Crédit
(COOPEC) grant loans on favourable terms.  An info rmal financing system is also present in Togo,
particularly in the form of tontines and money-lending practices.  A down payment is collected by the
customs cordon as part of the business profits tax, with a view to improving the contribution of the
informal sector to the public revenue.
(2) ECONOMIC DEVELOPMENTS
(i) From independence to the end of the 1980s
6. Until the beginning of the 1970s, the Togolese economy was dominated by the exploitation of
phosphates.  In order to limit the heavy dependence of the country on that resource, the Togolese
authorities endeavoured, in the second half of the 1970s, to diversify economic activity by introducing
a policy of public investment in most sectors.  Wi thin a few years, several scores of State-owned or
parastatal enterprises had been established.
7. Mismanagement of the State-owned enterprises, some of which had been uneconomic from
the outset, and the rapid expansion of public expenditure connected with these investments, with the
maintenance of these companies in being and with th e payment of the salaries of civil servants, whose
number had considerably increased in the meantime, very soon contributed to financial difficultieswhich, from 1979 onwards, necessitated the implementation of an adjustment programme supported
by the International Monetary Fund (IMF).  The positive results obtained were compromised in 1986
and 1987 by the fall in export earnings and a considerable increase in public expenditure.  In 1988,
Togo introduced a new structural adjustment programme (with the assistance of IMF) designed to
continue the reforms that had been interrupted in 1987.  This programme consisted of reform of the
public sector, an overhaul of revenue policy and measures to liberalize the economy.  An Enhanced
Structural Adjustment Facility (ESAF) was a pproved by the IMF in favour of Togo in 1989.
8. These programmes enabled Togo to resume economic growth from 1984 onwards (Chart I.2).
The performance achieved in the area of public finance, combined with the restrictive monetary
policy of the Central Bank of West African Stat es (BCEAO) on behalf of its member countries
(including Togo), helped to reduce the rate of inflation, as measured by the Consumer Price Index,
from more than 20 per cent at the beginning of the 1980s to less than 1 per cent at the end of thedecade.  Nevertheless, the effects of these programmes on the foreign balances were generally fairly
slight.WT/TPR/S/48 Trade Policies Review
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-20-15-10-505101520
1970 73 76 79 82 85 88 91 94 1997Chart I.2
Growth rates of real GDP, 1970-1997
Percentage
Source : World Bank (1997), World Development Indicators , and Togolese authorities.
(ii) Economic situation in the 1990s
9. The social and political crisis that Togo went through at the beginning of the 1990s
compromised the continuation of the reforms and economic growth.  The transition to democracy,
which began with the 1991 National Conference, was marked by acts of violence and strikes,
particularly during the years 1992 and 1993.  Real GDP deteriorated sharply (-21 per cent in 1992 and
1993).  The consequences for the public finances were also negative.  Fiscal revenue fell as a result of
the strikes, the prolonged closure of the port of Lomé and the decrease in the taxes paid byenterprises:  the revenue fell from 25.8 per cent of GDP in 1990 to less than 11 per cent in 1993
(Table I.2).  The deficit in the balance on current account (excluding public grants) was about
14 per cent of GDP in 1992.  The adjustment programme supported by the IMF was once again
interrupted in 1993.
10. On 12 January 1994, the African Financial Community franc (CFA franc), the currency
common to the countries members of the West African Economic and Monetary Union (WAEMU),
including Togo, was devalued:  the parity changed from CFAF 50 to 1 French franc to its present
level of CFAF 100 to 1 French franc (Annex I.1).  Th is devaluation resulted in a depreciation of the
real effective exchange rate which, in 1995, was 23 per cent below its 1970 level.
3  A few months
after the devaluation, in September 1994, Togo concluded another adjustment plan with the IMF forthe period 1994-1997.
                                                     
3The depreciation of the real effective exchange rate from 1997 onwards was the result of adjustment
measures introduced by Togo and, indirectly, of the depreciation of the French franc (until 1986).Togo WT/TPR/S/48
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Table I.2
Basic economic indicators, 1990-1997
1990 1991 1992 1993 1994 1995 1996 1997a
Nominal GDP (billions of CFA francs) 442.5 452.9 433.5 352.3 545.0 652.5 746.8 821.9
Nominal GDP (millions of US$) 1,625 1,605 1,638 1,244 982 1,307 1,460 1,408
Per capita nominal GDP (in US$) 464 446 443 319 245 319 348 327
Per capita GFAFb123.5 76.2 64.6 16.9 32.6 45.6 47.6 49.1
GDP at constant prices (1987 CFA francs;
variation in %)-0.2 -0.9 -6.3 -14.7 13.0 8.2 9.1 3.9
Consumer price (variation in %) 1.0 0.4 1.4 0.0 35.3 15.7 4.7 10.8
Exchange rate (CFA franc/US$) 272.3 282.1 264.7 283.2 555.2 499.2 511.6 583.7
Real effective exchange rate (base 100 in 1990) 100.0 95.0 96.6 93.3 62.1 71.9 71.5 […]
Money supply (M2;  variation in %) 9.5 3.2 -18.0 -15.3 43.5 22.0 -6.8 16.2
Interest rate 16.0 16.0 17.5 […] […] […] […] […]
Foreign debt (in % of exports)c194 215 246 385 363 290 […] […]
Gross international reserves (in millions of $) 358 369 277 161 99 135 […] […]
Gross international reserves (in import months) 5 5 5 4 3 4 […] […]
Use of GDP (in % of  GDP):
P r i v a t e  c o n s u m p t i o n 7 07 47 58 68 08 68 28 4
P u b l i c  c o n s u m p t i o n 1 91 51 71 71 41 21 31 2
Capital investment 22 19 17 6 15 17 14 14
Gross domestic savings 11 10 8 -2 5 1 5 5
Net exports of goods and of non-factor services -11 -8 -9 -9 -9 -15 -9 -10
State accounts (in % of GDP):
Internal revenue (excluding grants) 25.8 18.9 18.2 10.9 14.3 17.3 18.4 15.8
of which:  Import duties 8.3 7.0 5.7 1.4 5.0 5.6 6.1 6.7
Public expenditure 28.7 24.9 22.2 25.6 25.4 22.9 21.8 20.0
Balanced-2.9 -6.0 -4.0 -14.7 -11.1 -5.6 -3.3 -4.2
Primary balancee4.4 0.2 0.3 -8.6 -5.0 -0.7 -0.7 -1.5
Balance-of-payments (in % of GDP):
Balance of trade -5.5 -3.3 -7.8 -2.9 1.4 1.3 -1.7 0.0
Balance on current account (excluding public
grants)-12.6 -10.4 -13.8 -9.0 -8.1 -5.9 -8.3 -6.4
[…] Not available.
aEstimates.
bGross fixed asset formation.
cIn the sense of the balance-of-payments.
dBalance = total revenue (excluding grants) – total expenditure.
ePrimary balance = total revenue (excluding grants) – total expenditure (excluding interest on debt).
Source:  Togolese authorities;  World Bank (1977), World Development Indicators , IMF, International Financial Statistics , various editions.
11. Despite the difficulties encountered in implementing the plan, structural reforms were
undertaken in 1997 for the purpose of redefining the respective roles of the public and private sectors
and creating an environment conducive to economic activity.  The first stage of privatization is beingcompleted:  the process of opening up the capital of the Togolese Phosphates Office (OTP) shouldWT/TPR/S/48 Trade Policies Review
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end in 1998.  The management of State-owned enterpri ses has also been improved;  those still active4
must report regularly to the Computer Management System (SIG), submit audits of their accounts and
post prices that enable them to invest out of their own resources.5
12. Import duties have been simplified and their rates are among the lowest in the West AfricanEconomic and Monetary Union (WAEMU) (Chapter  III.2(iii)(a)).  The improvement in the
performance of the tax authorities and customs administration and the tax components of the reforms,including the reduction in exemptions, made it possible to increase the internal revenue from
10.9 per cent of GDP in 1993 to more than 18 per cent in 1996 and to about 16 per cent in 1997
(Table I.2), despite the fall in the rates of import duties.
6  An upturn in real GDP was recorded from
1994 onwards, but the high rate of growth during the first year mainly reflected a catching up
following the major falls especially in the years 1992 and 1993.  Moreover, the Togolese economyhaving already been rendered fragile by the social and political crisis, the strong demand for local
goods induced by the devaluation (substitution effect) sustained the inflation caused by the change in
parity, the level of domestic supply being quite low:  since the devaluation, the inflation rate has not
returned to its earlier level (of the first years of  the 1980s).  However, an improvement in foreign
balances was registered.  In September 1997, the outstanding foreign debt, mainly contracted withmultilateral institutions
7, was estimated at CFAF 815 billion, or 99 per cent of GDP.  Debt servicing
represented 14 per cent of GDP in 1996.
(3) TRADE PERFORMANCE
13. The crisis had a serious affect on imports and exports:  between 1991 and 1993, imports in
current CFA francs fell by 60 per cent and exports by 46 per cent.  Long in deficit (total exports cover
on average about 85 per cent of imports), the Togo balance of trade was in surplus in 1994 and 1995;
a surplus balance is also expected for 1997.  This performance excludes cross-border trade (notregistered) which is subject to considerable variations and the export component of which would
amount to about 15 per cent of the goods exported.  Togo's foreign trade is also characterized by
re-export operations (more than a quarter of the Togo exports by value);  transit is an important part of
these operations (Box I.1).  The chronic deficit in the balance of services sustains that of the balance
on current account – the latter was in deficit even in 1994 and 1995, when the balance of trade was insurplus (Table I.3);  except in 1994 when they fell, unrequited transfers (both official and private) to
Togo varied little in United States dollars or in special drawing rights over the last five years.
                                                     
4These enterprises are essentially public utilities such as the Compagnie Energie Electrique du Togo
(CEET), the Régie Nationale des Eaux du Togo (RNET), TOGO-TELECOM and the Société des Postes du
Togo (SPT).
5Government report on the implementation of the macroeconomic reforms in 1997, December 1997.
6In 1997, customs receipts represented 45.4 per cent of fiscal revenue and import duties 22.3 per cent,
as against 34.6 per cent and 19.6 per cent respectively in 1994.
7In 1996, multilateral debt represented 63 per cent of the total.Togo WT/TPR/S/48
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Box I.1:  Transit in Togo
The transit of goods to countries without a coastline (Burkina Faso, Mali and Niger), to  which Togo is
connected by an important road network, is a major traditional activity for this country.  The customs transit
regime includes direct transit and re-exports after the goods have remained for some time in a bondedwarehouse in Togo.  Direct transit is not subjected to any tax, other than the road tax.  Re-exports are subjectedto a tax of 4 per cent for most products, 1 per cent for rice and sugar and 0 per cent for vehicles.
For the year 1997, total transit amounted to CFAF 189 billion ($324.1 million) and re-exports were
worth CFAF 51 billion ($87 million).  Transport equipment he aded the list of the  products re-exported (23 per
cent), followed by petroleum products (16 per cent), fabrics and clothing (12 per cent), cereals (10 per cent),metals and metal articles (6 per cent), electrical equipment (5 per cent), sugar (4 per cent), tobacco (3 per cent),and machinery (2 per cent), inter alia.
The authorities are endeavouring to restore the competitiveness of the port of Lomé and to regain the
custom of the land-locked countries which fell off cons iderably, to the benefit of the neighbouring countries, as
a result of the prolonged closure of the port of Lomé in the early 1990s.
Source:  Togolese authorities and WTO Secretariat.
Table I.3
Evolution of the balance of payments 1993-1997
1993 1994 1995 1996a1997b
(in billions of current CFA francs)
Balance of trade -10.2 7.8 8.7 -12.8 0.4
Net services -24.2 -56.6 -52.8 -56.5 -60.3
   Freight and insurance -10.1 -28.3 -40.1 -27 -29
   Travel and tourism -2.7 -3.5 -2.9 […] […]
   Interest on foreign debt -13.3 -27.9 -20.4 -17.4 -16.9
   Other transport -4.8 -6.3 -4.1 […] […]
   Others 21.2 10.9 12.3 -12.1 -14.4
Net private unrequited transfers 2.7 4.7 5.5 7.3 7.2
Balance on current account
(without grants)-31.7 -44.1 -38.6 -62 -52.7
Official grants 8.8 12.9 20.6 16 18.4
Balance on current account
(including grants)-22.9 -31.2 -18 -46 -34.3
Net capital movements -39 -8.3 -13.8 48.3 13.7
Global balance -61.9 -39.5 -31.8 2.3 -20.6
(in percentage of GDP)
Balance of trade -2.9 1.4 1.3 -1.7 0.0
Balance on current account
(without grants)-9.0 -8.1 -5.9 -8.3 -6.4
Grants 2.5 2.4 3.2 2.1 2.2
[…] Not available.
aEstimates.
bProjections.
Source: Togolese authorities.
(i) Trade in goods
14. Apart from the fall in 1993, the share of exports of locally-produced goods in the nominal
GDP has remained at about 16 per cent, even after the devaluation of the CFA franc in 1994WT/TPR/S/48 Trade Policies Review
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(Table I.4).  However, since 1993, the value in United States dollars of the exports of Togolese
products has remained below its 1991 and 1992 levels:  the significant fall in dollar terms of
phosphate exports has not been compensated for by the earnings from products such as cotton, coffee,
cocoa and cement.  Despite this downturn, phosphate is still the chief export product from Togo, just
before cotton:  these two products at present supply a little more than two thirds of the export earnings
of Togolese products (Chart I.3), thus exposing the Togolese economy to the shocks, includingexternal shocks, affecting these products.  This export performance could reflect, inter alia , the
slowness of the recovery of economic activities after the social and political crisis of 1991-1993.
Table I.4
Evolution of exports and imports, 1991-1997
  (Amount in millions) 1991 1992 1993 1994 1995 1996 1997
 (i)  Exports (f.o.b.)
  (a)  Domestic products
  (CFA francs) 71,433 72, 779 38, 512 90 ,153 104,218 122, 090 137, 960
  (In percentage of GDP) 15.8 16.8 10.9 16.5 16.0 16.3 16.8
  (US dollars) 253.2 274.9 136.0 162.4 208.8 238.6 236.4
  (b)  Re-exports
  (CFA francs) 40,800 33,800 21,100 33,100 43, 000 52, 000a50,637
  (ii)  Imports (c.i.f.))
  (a)  For domestic consumption
  (CFA francs) 125,220 104,461 50,810 123,265 191,812 206,563 217,972
  (In percentage of GDP) 27.6 24.1 14.4 22.6 29.4 27.7 26.5
  (US dollars) 443.9 394.6 179.4 222.0 384.2 403.8 373.4
  (b) For re-export
 (CFA francs) 27,600 21,500 13, 900 17,200 37,000 43,300 47,600
aEstimates.
Source: Togolese authorities.
15. The average propensity to import (the rati o of imports to GDP) of goods intended for
consumption in Togo was in the neighbourhood of 25 per cent for the period 1991-1997.  Except for
the sharp downturn in 1993, the year in which the social and political crisis reached its climax, theshare of GDP devoted to such imports varied very little in general:  the effect of the crisis on this type
of demand was greater than that caused by the devaluation of the CFA franc in 1994.  Except for
products such as fish, textiles and clothing, which could have been re-exported in the context of cross-
border trade, imports, including the United States dollar values whose shares have increased, relate to
goods for which the demand is largely inelastic.  Under the combined effects of the devaluation
(substitution effect) and the crisis, the imports of goods such as foodstuffs, pharmaceutical products
and electrical equipment have fallen (Chart I.3).  However, food products represent almost a quarter
of Togolese imports.  The other major imports are petroleum products, textiles and clothing and
metals and metal articles.Togo WT/TPR/S/48
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Chart I.3
Exports and imports according to main product groups, 
1992 and 1997
1992 1997
(a)    ExportsPercentage
Coffee
6.5
Phosphates
45.7Cotton 
20.3
Others
23.8Cocoa
3.7
Timber
1.9Coffee
10.5
Phosphates
34.8Cotton 
33.5
Others
13.4Cocoa
5.9
Petroleum products
6.2Pharmaceutical 
products
6.6
Electrical 
equipment
9.5Transport 
equipment
13.1Metals and 
metal 
articles
3.6Others
23.7Fish
4.0
Textiles and 
clothing
9.4Other food 
products
23.9
Transport 
equipment
4.4Electrical 
equipment
5.8Metals and 
metal articles
7.2Other food 
products
18.3Fish
5.2
Others
32.9Pharma-
ceutical 
products
3.8
Petroleum 
products
11.3
Textiles and 
clothing
11.1
Total:   394.6 million dollars Total:   373.4 million dollarsTotal:   274.9 million dollars Total:   236.4 million dollars
Source :  Togolese authorities.(b)    ImportsWT/TPR/S/48 Trade Policies Review
Page 10
16. A diversification of the destinations for Togolese exports was recorded between 1992 and
1997:  Togolese exports to countries such as South Africa, Malaysia and Indonesia, which had been
virtually nil in 1992, rose to between 4 and 9 per cent in 1997 (Chart I.4).  Apart from the increase in
such exports to Benin and Burkina Faso, the devaluation of the CFA franc does not seem to have had
any major substitution effect in favour of Togolese products within WAEMU.8  The phosphates are
principally exported to Canada (main destination for Togolese products) and South Africa.  Thecotton is mainly intended for Chinese Taipei and Brazil and coffee for the European Union.
17. Despite a decrease in its share of Togolese imports, France is still the main supplier of Togo
(one quarter of 1997 imports).  Except for the increase in imports from Côte d'Ivoire (Chart I.4) and,
to a lesser extent, from Senegal, the devaluation of the CFA franc does not seem to have favoured the
substitution of goods from WAEMU countries for those of other suppliers.  In all, about one fifth ofTogolese imports come from countries in the West African subregion.
(ii) Trade in services
18. The balance of services is chronically in deficit.  This deficit has increased since devaluation
as a result of the increase in the interest on foreign debt and expenditure on insurance and freight
(Table I.3).  The evolution of the insurance and frei ght services costs is in part due to the increase in
the value of such imports in CFA franc terms (on account of the devaluation) which the fall in their
volume was not sufficient to absorb.
9  Likewise, the increase in the interest on foreign debt is mainly
the result of the increase in CFA franc terms of the amounts of dollar loans contracted before the
devaluation.
                                                     
8Cross-border trade may have masked such an effect.  Moreover, the non-diversification of exports
could be an explanation of this result.
9See Degbelo (1994) for further details of such effects in the context of developing countries.Togo WT/TPR/S/48
Page 11
Chart I.4
Exports and imports according to trading partner, 1992 and 1997
1992 1997
(a)    ExportsPercentage
Others Africab
55Nigeria
9.3
Others Asia
6.7Chinese Taipei
8.5India
5.7
Japan  4.2
Côte d'Ivoire
6.3United States
4.9Others Africa
16.8France
25.2
Others
14.4
Others, 
Eastern 
Asia  4.2
Others
EU15a
24.0
Total:   394.6 million dollars Total:   373.4 million dollarsTotal:   274.9 milli on dollars Total:   236.4 milli on dollars
(b)    ImportsPoland
5.6
EU15a
20.4Others
17.9Canada
20.4Others Africab
55South Africa
8.9
Others Asia
12.1Chinese Taipei
8.9Brazil
7.1
Malaysia
5.5
EU15a
17.8Others
11.0Canada
12.1Indonesia
4.1
Poland
5.8
Japan  5.2
Côte 
d'Ivoire
3.0United States
8.8Others Africa
7.9France
34.2Others
14.5
Others, 
Eastern 
Asia  5.2
Others 
EU15a
21.2
The countries taken into account in the European Union are those for which statistics are available.  Thus, trade with the Euro pean Union 
consists of commercial exchanges with France, Spain, Itay, the United Kingdom, Belgium-Luxembourg, the Netherlands, Germany and  
Greece.  In view of France's importance in the structure of Togolese imports, that country has been treated separately from the  others.  The 
European Union, including France, provided over half of Togo' s imports in 1992 (55.4 per cent)  and 49.2 per cent in 1997.
The share of exports to Benin has increased from 2.2% in 1992 to  4.1% in 1997;  and those to Burkin Faso from 1.8% to 2%.a
bS
Source:    Togolese authorities .WT/TPR/S/48 Trade Policies Review
Page 12
(4) Investment
19. The social and political crisis, with the loss of credibility resulting therefrom, caused a serious
fall in investment in Togo from 1990 to 1993 (Table I.5).  In 1997, private investment had still not
returned to its 1990 level.  Contrary to expectations, no recovery of foreign investment was observed
in 1996.  Since 1994, CFAF 17 billion have been invested in enterprises in the free zone.  No
enterprise has been approved under the Investment Code since 1993, the advantages given in thecontext of the free zone regime being much more favourable.  Moreover, the authorities are hesitant to
grant approval because of the preparation of the WAEMU Community Investment Code
(Chapter II.4(ii)).
Table I.5
Investment, 1990-1997
1990 1991 1992 1993 1994 1995 1996 1997
(in billions of CFA francs)
Total gross national investment 117.7 77.5 63.3 18.7 72.5 93.3 102.4 123.3
of which: public investment 32.3 20.4 15.6 8.5 13.1 22.8 21.7 26.3
private investment 85.4 57.1 47.7 10.2 59.4 70.5 80.7 97.0
Note:
Accumulated investment in the free zones 1.4 6.8 5.2 6.8 7.2 10.4 17.2 29.7
Source: Togolese authorities.
20. Public investment in 1997 was distinctly less than the amounts invested at the beginning of
the decade.  This investment, amounting to CFAF 26 billion, belongs within the framework of the
1996-1998 public investment programme (PIP).  It is financed from domestic resources(CFAF 4 billion) and foreign res ources (CFAF 22 billion).  In this three-year programme, the
authorities are giving priority to the development of the education and health sectors and to the
rehabilitation of the economic infrastructures, which accounted for 53 per cent and 26 per cent
respectively of the sums invested in 1997.
21. Togo does not keep statistics on foreign investments.
(5)
OUTLOOK
22. The authorities estimate that the growth in real GDP will be 4.7 per cent in 1998 and
6.7 per cent on average annually for the period 1999-2001.  The secondary sector should have the
greatest increase (10.4 per cent per annum on average).  The rate of investment should continue to
increase:  a rate of increase of 18 per cent is forecast for 1998.  The improvement and diversificationof productive activities and the development of the services sector should make it possible to absorb
the deficit in the balance-of-payments;  a surplus of CFAF 11.3 billion is forecast for 1998
(12.7 billion for 1999).
23. Continuation of the reconstruction of public finances is also envisaged.  This should make it
possible to reduce the public deficit (on the basis of commitments) to less than 3 per cent of GDPfrom 1998 onwards;  a portion of public expenditure will be redirected towards the basic social and
economic investment designed to reduce poverty.  The inflation rate measured by the Consumer Price
Index should be reduced to 3 per cent from 1999 onwards.  Togo intends to strengthen the integration
of its economy into WAEMU:  acceleration of growth in the Union and the harmonious integration of
its members into the world economy are recommended by the WAEMU Council of Ministers.Togo WT/TPR/S/48
Page 13
ANNEX I.1:  EXCHANGE REGULATION10
24. Within the franc area, Togo forms part of the West African Economic and Monetary Union
(WAEMU) and of the West African Monetary Union (WAMU), the issuing institute being the Central
Bank of West African States (BCEAO).11  The currency used inside the Union is the African
Financial Community (CFA) franc, attached to the French franc at a fixed rate.  This parity was raised
from CFAF 50 to 100 to 1 French franc in January 1994.  The BCEAO, like the Bank of Central
African States (the equivalent of the BCEAO in Central Africa), has an "operations account" with theFrench Treasury into which is paid at least 65 per cent of its foreign currency holdings;  it uses this
account to make transfers outside the franc area.
12  The special feature of this account is that it may
become a debit account, without any limits set a priori, because of the French Government's
undertaking to guarantee the convertibility of CFA francs to an unlimited extent.
25. The exchange rate of the CFA franc with other foreign currencies is fixed on the basis of the
corresponding exchange rate for the French franc.  The rates include a commission of 0.25 per cent
levied by banks and post offices on all transfers outside the WAEMU, and this sum is paid to the
Togolese Public Treasury.  There is no tax on the selling or buying of foreign currencies.  Forward
exchange operations are subject to authorization by the Ministry of Finance, which is responsible for
exchange controls.  Payments (except for gold tran sactions and the issuing, advertising and offer of
financial instruments) and transfers of capital within the area are completely free.  All the countries of
the area have, in principle, common regulations rega rding exchange with third countries.  Payments of
the WAEMU countries to Gambia, Ghana, Liberia, Mauritania, Nigeria and Sierra Leone are usually
made through the West African Clearing House.  Togo, like the other WAEMU countries, accepted
Article VIII (Sections 2, 3 and 4) of the Articles of Agreement of the International Monetary Fund on
1 June 1996.
26. Imports and exports in amounts exceeding CFAF 500,000 must obligatorily be domiciled
with an authorized bank.  Residents must, within  one month following the date on which they become
due, collect the amount payable to them by foreign countries (including the countries of the franc area
and WAEMU), for goods exported and repatriate them to the bank of domiciliation;  payment for
exports to all foreign countries (including those in the franc area) is due within 180 days following the
arrival of the goods at their destination.  Receipts from invisible transactions must be collected andpassed on within two months of the date they are due or encashed.
27. Payments for invisible transactions (except those carried out within the franc area), transfers
of profits, dividends and royalties to non-residents, capital transfers outside the franc area,
investments abroad by residents, foreign direct investments in Togo, loans taken out abroad and the
issuing, advertising and offer for sale in Togo of foreign transferable securities, are subject to prior
                                                     
10Exchange regulation within the franc area is described in IMF (1997) and WTO (1997).  This
presentation will be largely based on these two sources.
11The countries of WAEMU are Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger,
Senegal and Togo.  The BCEAO has its headquarters at Dakar and branches in each member State.  In additionto the WAEMU countries, the franc area includes France and its overseas departments and territories, Monaco,
the countries members of the Economic and Monetary Community of Central African States (CEMAC),namely, Cameroon, the Central African Republic, Chad, Congo, Gabon and Equatorial Guinea, whose central
bank is the Bank of Central African States (BEAC), and Comoros.
12Operations Account Convention, Dakar, 1973.  Each central bank also has a French Treasury
ordinary current account in places where it has its own establishment;  the Operations Account is debited orcredited with the amount of the transfers resulting from the levelling down or topping up of this account
(Article 3).WT/TPR/S/48 Trade Policies Review
Page 14
approval by the Minister of Finance.13  All payments made from abroad to Togo with a view to direct
or any other investment must take place through an authorized agent and must involve either the
surrender of foreign exchange on the currency market or the debiting of a foreign account in francs.
28. Foreigners working in Togo may transfer up to 50 per cent of their salaries abroad if they live
with their families in the country and up to 80 pe r cent if their families are living abroad.  The
amounts that residents travelling abroad may take outside the franc area are limited to CFAF 1 millionper person and per tourist trip and to CFAF 200,000 per day and per person for a business trip of more
than one month.  Travellers may bring into Togo an unlimited number of bank notes issued by the
BCEAO or the Bank of France.  Foreign bank notes  brought in by residents must be sold to an
authorized bank within eight days.  Since Augu st 1993, following a flight of capital, BCEAO has
suspended the automatic purchase of bank notes it had issued which have been exported outside theWAMU.
                                                     
13In practice, the approved intermediary banks and post offices are empowered to carry out transfers up
to CFAF 500,000.