**Figure 17: Export prices, Import prices and Terms of Trade in Togo (Base 2000=100), 1960‐2005.**

<!-- Start of picture text --> 300<br>250<br>200<br>150<br>100<br>50<br>0<br>Exports price index (goods and services, 2000 = 100) Imports price index (goods and services, 2000 = 100)<br>Terms of trade (goods and services, 2000 = 100)<br>1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004<br><!-- End of picture text --> _Source_ : WDI data, World Bank.

# **4.6 Conclusions from and Implications of the Development Dynamic Analysis**

- Togo’s immediate post independence period (1960‐1973) of prudent, modernizing‐oriented and market‐ friendly economic policies were followed by a decade of interventionist, protectionist and expansionary policies that ended with the international oil shock and external debt crisis in the early 1980s. Economic reforms under an IMF‐sponsored financial stabilization program in the 1980s did not result in increased and sustained growth, mainly because of the burden of debt, economic mismanagement, and confrontations between population and the government, which ended up in removing the political elite in the early 1990s. Social unrest, public authority dysfunction, economic mismanagement and perception of corruption of public officials remained until late 1990s.

- The 2000s has constituted a decade of market oriented economic reforms that have been commended by international financial institutions (IMF, 2009). Prudent fiscal and monetary policies have been set in place. The structural reforms have stressed fiscal governance, financial sector restructuring and public enterprise reform, all with an emphasis on measures that more directly impact economic growth. Yet, reforms have not yielded the expected growth. Consecutive food, energy price increases and the recent international economic and financial crises have been identified as at least partially responsible for this lack of growth.

- There has been very limited capital investments in Togo since the 1980s and total factor productivity has declined rather than improved. Any positive effect on growth can almost exclusively be explained by growth in labor, explaining the negative growth _per capita_ numbers. A potentially positive effect on growth per capita from an improved dependency ratio was negated by a decline in the labor force participation rate.

- In terms of sector dynamics since 1980, the _employment share_ has increased for services, and decreased for agriculture and industry, while at the same time, the _value added share_ has decreased for services, increased for agriculture and stayed approximately the same for industry. When looked at in its entirety, this indicates that little progress in economic transformation has actually taken place. For instance, the increased labor force either stayed in low productivity agriculture or moved to low‐productivity self‐ employment in the service sector, resulting in a drastic reduction of average productivity in that sector.

- Export growth explains almost half of the increase in aggregate supply since 2000 and the ability of Togo to sustain these recent higher growth rates mostly hinges on its capacity to maintain this sector. Togo’s exports have shown an increasing trend during the last two decades, though not as large as that of its peers from Sub‐Saharan Africa and low‐income countries. In contrast, Togo is the most diversified exports and ranks highly in terms of the growth rate of the export basket’s income value.

- Public capital investments are expected to rise as Togo re‐engages with the international community. The remaining question is whether the government will direct these investments in a way that removes Togo’s binding constraints to growth – not least through continued progress within the export sector.

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