Togo WT/TPR/S/166/Rev.1 
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I. ECONOMIC ENVIRONMENT 
(1) MAJOR FEATURES OF THE ECONOMY  
1. Togo covers an area of 56,600 km2.  The south, which borders on the Atlantic Ocean, has a 
sub-equatorial climate, while the climate in th e north is tropical.  Togo has common borders with 
Burkina Faso to the north, Benin to the east, and Ghana to the west.  With the exception of Ghana, all 
the neighbouring countries belong to the West African Economic and Monetary Union (WAEMU), and share its objective of forming a customs union.  In 2003, Togo's population was estimated to be 
some 4.97 million, of whom 34.5 per cent lived  in urban areas (mainly the capital, Lomé). 
2. As a result of the continuing social and politi cal crisis which began in 1992, Togo has not 
registered any significant improvement in its human development level since th e first review of its 
trade policy in 1999.  It is a least developed country (LDC), which still lies 143
rd (out of 
177 countries) in the UNDP's human development index.1  Average life expectancy is 57 years;  
around 48 per cent of the population is under 15 years of age, and almost 60 per cent of the adult 
population is literate. 
3. Togo's gross domestic product (GDP) at market prices was estimated at around 
CFAF 1,044 billion (about US$1.73 billion) in 2003, including the contribution from the informal 
sector, giving a per capita GDP of US$347 (Table I.1) .  The informal sector accounts for 68 per cent 
of total economic activity:  essentially, agriculture is regarded as formi ng part of the informal sector 
as it is not highly monetized;  the informal sector accounts for around one third of trade and transport 
turnovers. 
4. Togo's economy continues to depend on agricultu re (including livestock and fishing), which 
in 2005 made up almost 38.2 per cent of nominal GDP (Table I.2), and is the main source of income 
and jobs for 63 per cent of the population.  Farms are small, and traditional methods of cultivation are 
used (Chapter IV(2));  this is subsistence agriculture , the main cash crops being cotton and, to a lesser 
extent, coffee and cocoa. 
5. The manufacturing sector is undergoing a peri od of change, with cement-making on the 
increase and a downturn in the phosphate industri es.  Manufacturing continues to be of minor 
importance in the Togolese economy, and its share ha s not progressed significantly since Togo's first 
trade policy review (TPR) in 1999 (Chapter IV(4)).  Togo has introduced a free zone regime in order 
to encourage export-oriented investment (especially  industrial investment) (Chapter II(4)(ii));  supply-
side constraints, which remain substantially uncha nged, have lessened the impact of this policy.  
These relate to the cost and unavaila bility of inputs, and a finance sy stem oriented primarily toward 
import-export activities requiring s hort-term credit (around 60 per cent of credit is short-term).2  The 
social and political crisis is no doubt another factor that has contributed to the low level of foreign 
direct investment in the Togolese economy in general. 
6. Services constitute the other major sector in the Togolese economy (around 48 per cent of 
GDP).  One of Togo's main comparative advantages is  the Autonomous Port of Lomé (PAL), a deep-
water port, which enables the country to play an im portant role in the subregion's transit trade.  
However the infrastructure needed to exploit this asset to the full, in particular the road and rail 
networks, is not adequate to the task.  The State do es not appear to be in a position to remedy these 
failings, given the country's budgetary constraints.  
                                                      
1 UNDP (1999), UNDP (2005). 
2 BCEAO (2005), Annexes. WT/TPR/S/166/Rev.1 Trade Policy Review 
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Table I.1 
Basic macroeconomic indicators, 1998-2004 
 1998 1999 2000 2001 2002 2003 2004 
National accounts (billions of  
CFAF)         
 Gross domestic product (at market 
prices) 936.3 970.3 946.0 955.3 1,006.0 1,044.5 1 071.6 
 Final consumption 905.9 954.4 927.3 955.6 987.2 1,018.4 .. 
      Household 597.7 681.1 667.1 849.2 884.8 909.3 .. 
      Government authoritie s  308.2 273.3 260.2 106.4 102.4 109.1 .. 
 Investment 152.0 114.6 145.7 158.6 164.9 203.2 .. 
      Gross fixed capital formation 152.6 115.4 139.1 147.9 158.1 198.7 .. 
      Changes in stocks -0.6 -0.8 6.6 10.7 6.8 4.5 .. 
 Exports of goods and non-factor 
services 292.7 283.1 301.7 314.5 358.4 441.7 .. 
 Imports of goods and non-factor 
services 414.4 381.7 428.8 473.5 504.4 618.9 .. 
Consumer prices (index 2000 = 100) 98.2 98.2 100.0 103.9 107.1 106.1 106.5 
External sector        
Balance of current transactions 
(percentage of GDP) .. .. .. .. .. .. .. 
Nominal exchange rate (CFAF per US$ 
- period average) 590.0 615.7 712.0 733.0 697.0 581.2 528.3 
Real effective exchange rate (period average) 110.7 106.5 100.0 103.3 107.1 132.3 156.4 
Government finance  (percentage of 
GDP - at 31 December)        
Total revenue, including grants 15.1 15.2 12.8 15.8 12.9 16.4 .. 
Expenditure and net loans 20.2 17.9 17.6 15.9 13.4 14.0 .. 
Net loans 0.1 0.0 -0.3 -1.0 0.0 0.0 .. 
Deficit/surplus(+) -5.0 -2.7  -4.8 -0.2 -0.4 2.3 .. 
Financial indicators         
Money supply (M1) (billions of  
CFAF – end period) 131.8 144.8 176.9 161.6 148.4 154.8 192.9 
M2 (billions of CFAF – end peri od) 197.2 213.7 246.3 239.8 234.6 260.0 307.1 
Interest rate (12-month average) 3.5 3.5 3.5 3.5 3.5 3.5 3.5 
.. Not available. 
Source: IMF, IFS CD-Rom;  an d Togolese authorities. 
7. Togo belongs to the West African Monetary Union (WAMU), whose acquis  is incorporated 
in WAEMU (Chapter II(3)(ii)(c)).  All the members of WAEMU have common monetary and 
exchange policies administered by the Central Bank of West African States (BCEAO), a WAMU institution.
3  The currency unit, the African Financial Community (CFA) franc, has fixed parity with 
the euro:  CFAF 1,000 =  €1.52449017.4 
                                                      
3 Monetary cooperation between WAMU member countr ies and France dates back to the colonial era. 
It was given formal status in 1962, with a new Treaty being signed in 1973.  The BCEAO is the result of a 
monetary cooperation agreement signed with France in  1972 and supplemented by the transactions account 
agreement of 1973. 
4 The CFA franc had fixed parity with the French franc until the introduction of the euro on 
1 January 1999, which did not lead to any substantive changes as far as the arrangements in the franc zone are 
concerned (Decision of the Council of the European Union of 23 November 1998 concerning exchange matters relating to the CFA franc and the Comorian franc (98/683/EC). Togo WT/TPR/S/166/Rev.1 
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Table I.2 
Breakdown of GDP by sector, 1998 and 2005 
(Percentage) 
 1998 2005 
Agriculture (including fishing and 
livestock) 36.4 38.2 
Mining 5.3 2.7 
Manufacturing 10 11.5 
Services 48.3 47.6 
   Construction and public works 2.2 2.5 
   Trade 11.7 12.2 
   Transport, warehousing, communications 4.7 5.6 
   Banking and insurance 2.1 2.1 
   Other 27.6 25.2 
Source: Togolese authorities. 
8. Togo accepted Article VIII of the IMF's Articl es of Agreement on 1 June 1996.  The main 
common restriction on foreign exchange relates to the outflow of capital to countries outside 
WAEMU, which is subject to verification based  on the submission of supporting documentation 
(attestation and issue of a transfer authorizati on by the services of the Ministry of Finance).5 
(2) RECENT ECONOMIC DEVELOPMENTS  
9. Togo's rate of economic growth in real terms, which averaged 1.06 per cent a year for the 
period 1999-2003, has been slowed by the social and political crisis.  Its average economic growth rate is below its average annual demographic grow th rate of 2.4 per cent over the same period, 
indicating that real per capita GDP fell by around 5 per cent between 1999 and 2003. 
10. Despite the absence of external financing,  Togo has begun the process of developing its 
poverty reduction strategy (Chapter II(2)), and has pursued a macroeconomic stabilization and 
structural reform programme.  The authorities' pr incipal objective has been to control government 
finance in order to support the common monetary policy of the West African Monetary Union (WAMU);  notable progress has been made in this regard (Table I.1) as well as with structural 
reforms, and in particular the gradual withdrawal  of the State from the management of State-owned 
enterprises (Chapter III(4)(iv)). 
11. Since its first TPR, Togo has improved the institutional framework for drawing up, 
implementing and monitoring the budget following the introduction of the new budgetary 
nomenclature and the harmonized accounting plan on  1 January 2003, pursuant to the relevant 
WAEMU regulations.
6  This reform enhances transpar ency and good governance in government 
finance, as well as budgetary management as a whole, by combining operating and investment 
expenditure in a single budget.  The basic budgeta ry position (including grants) progressed from a 
deficit of CFAF 13.7 billion in 1999 to a surplus of  CFAF 26.7 billion in 2003 (2.3 per cent of GDP at 
market prices).  The improvement is attributable, inter alia , to a 30.7 per cent increase in revenue in 
2003, as a result of computerization by the General Di rectorate of Taxation, and the requirement that 
companies pay the taxes due for 2002 plus advan ce tax for 2003.  However, the accumulation of 
                                                      
5 According to the provisions of Article 6 of Regulation No. 09/98/CM/UEMOA on financial relations 
among member States of WAEMU, investment, loans, deposits and in general all capital movements among member States of WAEMU are free and unrestricted, pursua nt to Articles 76, paragraph (d), 96 and 97 of the 
WAEMU Treaty and Article 4 of the WAMU Treaty. 
6 Directives Nos. 5/97/CM/UEMOA, 6/97/CM /UEMOA, 4/98/CM/UEMOA, 5/98/CM/UEMOA and 
6/98/CM/UEMOA, as amended. WT/TPR/S/166/Rev.1 Trade Policy Review 
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internal and external payments arrears in 2003 refl ects the fragility of Togo's government finance.  In 
2004, Togo's outstanding internal and external de bt was equal to 96.5 per cent of its nominal GDP.7 
12. The BCEAO establishes the monetary policy of its  members, including Togo.  Money supply 
and credit objectives are fixed on an annual basis, ta king into account the general financing needs of 
the economy concerned and the resources needed to meet them, as determined by each national Credit 
Committee.  The BCEAO's articles of incorporation set a ceiling for advances to national treasuries, which are subject to an interest rate fixed by the BCEAO with a penalty if the ceiling is exceeded. 
Advances were frozen in each member State at thei r 31 December 2002 levels and then consolidated 
over 10 years at an interest rate of 3 per cent. States are called upon to issue public securities on the 
WAMU financial market.  This restrictive BCEAO  monetary policy has enabled Togo to curb 
inflation: in fact the inflation rate was negativ e in 2003 thanks to a good harvest.  Inflationary 
pressure has subsequently been recorded, as a resu lt of soaring world prices for petroleum products 
(local prices are administered, but they have been partially adjusted) and increased food prices.
8 
13. Togo was able to satisfy two of the four fi rst-tier WAEMU economic convergence criteria in 
2004.  These criteria were established under the Conver gence, Stability, Growth and Solidarity Pact, 
and are subject to regional monitoring.9  Togo has not complied with the criteria relating to 
outstanding debt and payments arrears.10  The WAEMU Commission considers that the results have 
been limited because of a lack of external financia l support to complement the internal effort and that 
improvement will depend on the con tinuation of efforts to resume harmonious cooperation with the 
international financial community.  The time-lim it for convergence, planned for 2000, was postponed 
until end 2005 because of the problems encountered by WAEMU member States in meeting the first-
tier convergence criteria  - an objective which has yet to be achieved.11 
(3) TRENDS IN TRADE AND INVESTMENT  
14. The ratio of merchandise trade to GDP, which st ood at 78 per cent in 2003, is a measure of 
the importance of trade to the Togolese economy.  Th e long-standing deficit in the balance of trade 
has increased significantly since Togo's first TPR, although exports of goods (on an f.o.b. basis) have 
risen of late. Togo is a net importer of services (Table I.3).  Tourism has lost ground as a result of the crisis, preventing the services sector from generating enough foreign currency. 
                                                     
 
7 Meeting of Ministers of the Economy and Finance of the Franc Zone,  Convergence Committee: 
Report to Ministers, 19 and 20 September 2005.  Ava ilable at:  http://www.izf.net [28 April 2006].  According 
to the authorities, at the end of 2002 Togo's external debt stood at US$1.423 billion (approximately 
CFAF 890.35 billion), and payments arrears at US$268 million (CFAF 167.6 billion).  Togo's internal debt was 
CFAF 270.64 billion (US$433 million), and payment arrears were CFAF 170.6 billion (US$273 million). 
8 BCEAO (2006). 
9 Additional Act No. 4/99. 
10 That is, the ratio of the basic budgetary position to nominal GDP (which should be greater than or 
equal to zero) and the average annual inflation rate (which  should not exceed 3 per cent) have not been met.  See 
Meeting of Ministers of the Economy and Finance of the Franc Zone, Convergence Committee:  Report to 
Ministers, 19 and 20 September 2005.  Ava ilable at:  http://www.izf.net [28 April 2006]. 
11 Meeting of Ministers of the Economy and Finance of the Franc Zone,  Convergence Committee:  
Report to Ministers, 19 and 20 September 2005.  Available at:  http://www.izf.net [28 April 2006]. Togo WT/TPR/S/166/Rev.1 
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Table I.3 
Balance of payments, 1998-2003 
(US$ million) 
 1998 1999 2000 2001 2002 2003 
A. Current account balance -140.1 -127.1 -139.6 -169.1 -139.9 -161.9 
      Trade balance -133.2 -98.0 -122.8 -158.9 -151.4 -156.8 
         Exports, f.o.b. 420.3 391.5 361.8 357.2 424.2 597.7 
         Imports, f.o.b. -553.5 -489.4 -484.6 -516.1 -575.6 -754.5 
      Trade in services, net -73.2 -62.2 -55.7 -58.1 -58.1 -109.4 
         Credit 76.1 68.4 61.8 71.8 90.0 94.8 
         Debit -149.3 -130.6 -117.5 -129.9 -148.1 -204.2 
      Current transfers, net 89.6 71.4 68.0 77.2 91.2 127.7 
         Credit 101.8 73.6 73.4 88.3 113.0 161.4 
         Debit -12.2 -2.2 -5.4 -11.1 -21.8 -33.8 
      Income, net -23.3 -38.4 -29.1 -29.3 -21.6 -23.3 
         Credit 44.4 40.2 32.9 25.9 26.2 26.8 
         Debit -67.7 -78.6 -62.0 -55.2 -47.8 -50.2 
B. Capital transfers, net 6.2 6.9 8.7 21.4 13.6 20.6 
C. Financial account, net 114.1 155.5 162.8 151.2 150.8 142.9 
      Direct Togolese investment overseas -10.6 -2.9 -0.5 7.3 -2.7 6.3 
      Foreign direct investment in Togo 30.2 42.6 41.9 63.6 53.7 33.7 
      Portfolio investment, inflow -5.2 -1.3 0.8 5.3 -1.1 -4.8 
      Portfolio investment, outflow 11.4 8.6 6.1 5.8 13.0 18.6 
      Other investment, inflow 16.2 13.0 8.8 8.2 -3.8 -28.7 
      Other investment, out flow 72.3 95.8 105.7 61.0 91.8 117.7 
D. Net errors and omissions 2.7 -3.7 5.0 -5.4 5.1 -10.2 
E. Change in reserves  (minus = increase) 17.2 -31.6 -36.8 2.0 -29.6 8.6 
Source: IMF, BOP CD-Rom. 
15. The structure of Togo's exports has changed significantly since 1998 (Chart I.1, and 
Tables AI.1 and AI.2).  Phosphates, which were th e leading export in 1998, now lie in third place;  
this is one consequence of the reorganization of the subsector, and of the OTP in particular 
(Chapter IV(3)(i)).  With the ending of phosphate ex ports to Canada and the Philippines, the share of 
exports to North America and Asia has collapsed. In 2001, cement took over first place in the export 
structure.  Cement exports go to countries of the subregion, namely, 42 per cent to Burkina Faso (now 
Togo's main customer), and 33 per cent to Ghana.  This explains the growing importance of Africa 
(particularly the WAEMU countries) in Togo's exports , with Africa's share rising to about 60 per cent 
in 2004 (Chart I.2 and Tables AI.3 and AI.4).  Cotton lies in second place, with a share which is generally dropping because of the collapse of global prices, especially in CFA francs (Chapter IV(2)(iii)(a)).  As at the time of Togo's fi rst TPR, cotton is exported pr imarily to the Separate 
Customs Territory of Taiwan, Penghu, Ki nmen and Matsu, and to Indonesia. 
16. An analysis of the structure of imports reveal s some product diversification, with petroleum 
products (petrol, diesel oil and fuel oil) accountin g for a relatively large share, which has risen 
recently as a result of an increase in both the volu me imported (+77 per cent) and prices (+55 per cent 
in CFA francs) (Chart I.1 and Table AI.5).  To go's sources of supply for petroleum products were 
disrupted by the Côte d'Ivoire cris is in 2002, but normal channels we re re-established in 2003.  France 
remains Togo's biggest supplier.  The structure of  Togo's imports from France remains stable, with WT/TPR/S/166/Rev.1 Trade Policy Review 
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pharmaceuticals, cars and cereals continuing to head the list.12  WAEMU's share of total Togolese 
imports has declined overall since the fi rst TPR (Chart I.2 and Table AI.6). 
17. According to UNCTAD, FDI accounted for 15.5 per cent of Togo's gross fixed capital 
formation in 2004, with total FDI standing at 31.4 per cent of GNP.13  The investments concerned 
related primarily to free zone enterprises (Chapter II(4)(ii)). 
(4) OUTLOOK  
18. Togo's economic performance remain s dependent on the consolida tion of social and political 
stability in the country, a process which began wi th the presidential election in 2005 and should 
permit a return to conditions conducive to the acceler ation of the reforms needed for the resumption 
of cooperation with development partners;  a decisive factor would be the successful holding of 
legislative elections, for which no date has yet been fixed. 
19. Subject to such stability, the BCEAO consider s that economic growth could reach 2.6 per 
cent in 2006, rising to 4.5 per cent in 2007 and 2008,  on the strength of the economic programme to 
be drawn up under a Poverty Reduction Strate gy Paper (PRSP).  According to the BCEAO,  the 
stabilization of the political situation and the resump tion of cooperation with development partners are 
the key factors in speeding up the reforms which s hould enable the private sector to play a more 
active role in exploiting the count ry's inherent capacities for growth .14 
20. The resumption of cooperation with development partners, effectively interrupted since 1992, 
would represent a real turning-point in Togo's econom ic and social prospects.  For example, unlike a 
number of LDCs, Togo does not yet have a PRSP a nd does not have access to the HIPC Initiative, 
which explains its high level of indebtedness a nd the accumulation of arrears.  Without political 
stability it would be difficult for the reforms introd uced by Togo in themsel ves, in the absence of 
support from the international community, to prov ide the means for the country to enhance its 
economic performance, and in that eventuality the current, depressed economic climate would be 
likely to persist. 
                                                      
12 MINEFI-DREE (2004). 
13 UNCTAD (2005), Annex B.3. 
14 BCEAO (2006), page 71. Togo WT/TPR/S/166/Rev.1 
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0%10%20%30%40%50%60%70%80%90%100%
1998 1999 2000 2001 2002 2003 2004
0%10%20%30%40%50%60%70%80%90%100%
1998 1999 2000 2001 2002 2003 2004Chart I.1
Structure of merchandise trade, 1998-2004
(a) Exports, not including re-exports (f.o.b.)
(b) Imports (c.i.f.)
Source: WTO Secretariat calculations, based on data taken from Comtrade, UNSD (SITC, Rev.3).Other wheat and rye Chemicals Automotive industry
Other semi-manufactures Other products Other transport equipmentIron and steel Other foodstuffsCalcium phosphate Cocoa Machinery and 
transport equipment
Cement Cotton Other
Non-electrical machines Fuels Textiles and clothing
Electrical machines § Iron and steel Other
 WT/TPR/S/166/Rev.1 Trade Policy Review 
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%1998199920002001200220032004Chart I.2
Direction of merchandise trade, 1998-2004
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%1998199920002001200220032004(a) Exports
(b) Imports
Source: WTO Secretariat calculations, based on data taken from Comtrade, UNSD (SITC Rev.3).Other countries 
of EuropeAmerica Benin Mali China Other countries of Asia
Burkina Faso France Ghana India Other
Burkina Faso France GhanaOther countriesof Africa  IndiaOther countries 
of EuropeAmerica Benin Côte d'Ivoire ChinaOther countriesof Asia
OtherOther countries 
of Africa