**Togo’s post‐independence economic performance has mostly reflected the country’s economic policies, with international and local shocks playing a secondary but not unimportant role in outcomes.** The country registered a trend of decelerating growth since independence, with long periods of negative growth rates that were briefly interrupted by a period of small pick‐up in the mid 1990s after the 100% devaluation of the CFA franc **.** As can be seen in Figure 2, average real per capita income growth was 5.8% in the 1960s, a period characterized by “prudent and market‐friendly policies macroeconomic policies with efforts to modernize the (economic) administration and to adjust the economy from colonial to post‐independence structures and a stable international environment” (Gogué and Evlo, 2004). In the 1970s, a decade that witnessed major shift in economic policy, growth fell to 0.1% as a commodity price boom resulted in increased government revenues, which, in turn, prompted a higher participation and intervention of the public sector. Specifically, higher public revenues were used to increase public investment, implement ill conceived projects, and expand the parastatal sector by creating publicly owned manufactures behind heavy import protection. During this period, government expansionary policies and a liquid international capital market led to a substantive increase in public debt. Togo was heavily affected by the onset of the oil shock and debt crisis in the early 1980s. During this period, and despite economic reforms sponsored by the international financial and development community, real per capita income shrank further at a pace of 2 percent per year. The 1990s was a period characterized of high political instability and continued stop‐and‐go in the reform agenda, as the stabilization and adjustment program faced severe obstacles for implementation. Government effectiveness was severely compromised, not only by people’s opposition to reforms, but also to increased and widespread corruption. During this period, per capita income recovered at a rate of 0.7% per year. A relatively high population growth rate in Togo (2.3% between 1970 and 2000) contributed to the observed low or negative per capita growth rates during the period. Another factor to be considered is the turbulent political situation that characterized the country since the early 1990s<sup>4</sup> and resulted in the withdrawal of international aid until mid 2000s. The lack of aid together with the meager government revenues, resulted in a long period of very low public investment and hence deterioration of public goods.

**Figure 2: GDP and GDP per capita growth rates and Development of GDP per capita in Togo, 1961 to 2008 (LHS), and Per capita GDP growth rates, Togo and selected ECOWAS countries 2004‐2008 (Real US dollars of 2000) (RHS).**

<!-- Start of picture text --> 12% 400 7%<br>10% 350 6%<br>5%<br>8% 300<br>4%<br>6% 250 3%<br>4% 200 2%<br>2% 150 1%<br>0%<br>0% 100<br>‐1%<br>‐2% 50 ‐2%<br>‐4% 0<br>GDP per capita (constant 2000 US$) Tota real GDP growth (US$ of 2000). HP filter<br>Per capita real GDP growth (US$ of 2000) HP filter<br>US$ of 2000 per capita<br>annual growth from Real US$ 2000<br>1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Cape Verde Ghana Sierra Leone Nigeria Liberia Gambia, The Niger Burkina Faso Mali Guinea Senegal Benin Guinea‐Bissau Togo Cote d'Ivoire SSA LICs MICs<br><!-- End of picture text --> _Source:_ DDP data, World Bank.

**Togo’s more recent real per capita income growth rate of ‐0.1%, 2004‐2008, was the second lowest of the ECOWAS countries**<sup>**5**</sup> **and much lower than the average growth rate of Sub‐Saharan Africa (3.2%) as well as that of**

> 4 After the one‐party system, people started their fight for democracy in the beginning of the 1990s. President Gnassingbe Eyadema died in February 2005 after 38 years in power and immediately replaced by his son Faure Gnassingbe. International pressure forced him to hold an election, but his victory was soon disputed by the opposition and some international observers. This triggered violence, hundreds of lives were claimed and tens of thousands fled to neighboring countries. In August 2006 an agreement, Accord Politique Global (APG) was signed and parliamentary elections were held in October 2007, starting a new period of reconciliation and focus on economic reforms.

> 5 The Economic Community of West African States (ECOWAS) is a regional group of 15 West African countries founded in 1975, with the main mission of promoting economic integration among its members. It includes: Benin, Burkina Faso, Cape Verde, Côte d'Ivoire, Gambia, Ghana, Guinea (suspended after 2008 coup d’etat), Guinea‐Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo. Out of this group, seven Francophone countries (Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal,

5