# **9 Appendices**

## **Appendix 1: Additional Figures, Tables and Boxes**

**Table A 1: Togo Income Benchmarking**

||<br>2007 GDP<br>per capita<br>(real US $|<br>1980‐<br>Histor|<br>2000‐<br>ical Grow<br>**g**|2006‐<br>th rate<br>**,**|1980‐<br>Years to<br>countri<br>**,**<br>|2000‐<br>achieve pc<br>es at histor<br>rate:<br>**,**|2006‐<br>growth of<br>ic growth|PC Growth rate<br>required to reach<br>2007 GDPpc of<br>resp. countries in|
|---|---|---|---|---|---|---|---|---|
|Country|OF 2000)|2007|2007|2007|2007|2007|2007|20years|
|Togo|239|‐1.4%|‐0.4%|‐0.5%|||||
|Burkina Faso|260|1.8%|2.4%|1.0%|‐6|‐21|‐16|0.4%|
|Benin|328|0.4%|0.7%|1.5%|‐23|‐78|‐58|1.6%|
|Senegal|509|0.4%|1.6%|1.9%|‐55|‐187|‐140|3.8%|
|Nigeria|472|0.2%|3.6%|4.0%|‐50|‐168|‐126|3.4%|
|Ghana|307|1.0%|3.1%|4.2%|‐18|‐62|‐46|1.2%|
|Mauritius|4700|4.1%|3.2%|3.9%|219|736|550|14.9%|
|LICs|415|1.2%|3.2%|4.3%|‐40|‐136|‐102|2.8%|
|Sub‐Saharan Africa|598|0.0%|2.4%|3.7%|‐67|‐227|‐169|4.6%|
|MICs|1997|2.6%|4.9%|6.9%|156|525|392|10.6%|

_Source:_ Authors’ calculations. DDP Data, World Bank.

### **Box A 1: Expected Transmission Channels of the Global Crisis to Togo**<sup>**.1**</sup>

|**_The global crisis is having or may have the following spillover effects on Togo:_**|
|---|

- _Lower demand and prices for exports:_ Lower global growth may adversely impact demand for traditional commodity exports, such as cotton and phosphate. Their share in total exports declined from 50% at the end of the 1990s to just 13% in 2008 and could fall further with the crisis. Cement exports, which represent about 20% of total exports, are expected to continue to increase, but declining regional demand should not be ruled out.

- _Decreasing trade‐related activities:_ The activity of the Port of Lomé and the related transport sector may suffer from lower transit and re‐export of goods to Burkina Faso, Niger, and Mali. Early in 2009 there was no sign of declining activity, but there may be a delayed impact.

- _Lower remittances:_ If economic conditions worsen in host countries, particularly in continental Europe, remittances, which make up 10 to 15% of GDP, could drop off sharply and jeopardize domestic demand (which is particularly important for construction). As of December 2008, no drop‐off was evident, however.

- _Lack of interest of strategic investors:_ Togo is not highly dependent on private capital flows, but delays in attracting strategic investors, which are key to finalizing restructuring of the banking and phosphate sectors, would constitute lost opportunities to enhance growth. For example, low international demand for phosphate may delay investor interest, which is crucial to obtain fresh capital and raise output.

- _Lower aid flows_ : Togo is not heavily dependent on donors flows—its foreign‐financed investment and social spending are among the lowest in the WAEMU—but it is expecting an increase to support economic revival.

- _Declining fiscal revenues:_ A greater than expected slowdown would likely reduce revenues below projections. The resulting financing gap would pose policy challenges.

- **_Togo’s exposure to the crisis may, however, be mitigated by the following country‐specific factors:_**

- _Low international exposure of the financial sector:_ The banking sector is mostly publicly and regionally owned, with low exposure to the most affected markets. Nonetheless, a recent pick‐up in household credit could reverse, if regionally owned private banks—the most active in this market—cut back lending in Togo to rebalance their portfolios. While there is no evidence so far of disruptions in international trade finance or the interbank market, banks are seeing more strict requirements from correspondent banks. Microfinance institutions, which represent 15% of total credits, have experienced decreasing funding from international institutions, however. Second round effects (e.g., rising NPLs) are also expected to be moderate given the recent restructuring, but the authorities are committed to heightened oversight to minimize the risks.

- _No major decrease in committed donor support_ : Public investment in 2009, financed in large part by donor support, is expected to pick up due to new commitments. Togo is largely reliant on multilateral donors—the World Bank, the EU, and the AfDB—whose disbursement is more stable and which together have committed budget support of about 2% of GDP to help Togo meet its 2009 financing needs.

- _Subsistence agriculture that accounts for about 25% of GDP_ might be an important shock absorber. Staff projects a rebound in subsistence production following the floods in 2008.

- _Declining energy and food prices_ are expected to reduce inflationary pressures, improve the terms of trade, and narrow the current account deficit in 2009.

- **___________________ 1** For further details see Selected Issues Paper.

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