Togo Economy Facts
Togo’s economy is dominated by agriculture. The dependence is large on a few export goods, especially cotton, coffee and cocoa. The extraction of phosphate, and industries linked to it, is also economically important. Another important source of income is the port operations in the capital Lomé. However, Togo is dependent on assistance to bring the economy together.
According to the UN, Togo is one of the least developed countries in the world and poverty is widespread, especially in rural areas where many rely on small scale cultivation for their own use. In cities, unemployment is high and unemployment is high, and many are trying to make up for income from the informal sector. Money sent home from Togolese working abroad is an important contribution to the economy. The dependence on external aid and other financial assistance is great.
- Countryaah.com: Major imports by Togo, covering a full list of top products imported by the country and trade value for each product category.
There is an economic imbalance between the small developed coastal region in the south and the other regions of the country. The inhabitants of the coastal area contribute almost all the tax revenue that comes to the Treasury.
Togo had a very weak economic development right up to the 21st century, mainly due to political unrest and poorly managed government finances. A contributing reason was also that the most important international aid donors withdrew their support in 1993 due to a lack of democracy in the country (see Modern history).
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including TGO which represents the country of Togo. Check findjobdescriptions to learn more about Togo.
Following the approval of a 2007 parliamentary election by international election observers, the EU, the World Bank, the IMF and the African Development Bank resumed assistance to Togo, increasing the country’s ability to receive support from elsewhere. In 2008, Togo joined the IMF and the World Bank’s debt relief program. In 2010, the Paris Club, consisting of 19 major donors, decided to write off just over $ 200 million of Togo’s foreign debt. The following year, France repaid Togo’s entire debt of approximately EUR 100 million. Thus, 82 percent of Togo’s foreign debt had been written off. In the last year of the 2010s, however, indebtedness increased again as a result of the government’s investments in infrastructure and investments in increased social welfare.
In the 2000s and 2010s, economic growth was relatively good, despite new political concerns from 2017. Good harvests combined with investments in infrastructure contributed to the development. New roads were built, and the port and the international airport in Lomé were developed and modernized. Lome’s deep harbor is one of the few natural harbors in West Africa. It has traditionally been of great significance not only for Togo but also for coastal countries such as Burkina Faso, Niger and Mali.
Shaky financial sector
The banking system in Togo has undergone changes. In the 2000s, a financial crisis erupted when some banks experienced an acute shortage of capital due to poor loans to the cotton and phosphate sectors. From 2008, the government has implemented a number of economic reforms, including a review and several privatizations in the banking, phosphate and cotton sectors.
Outside the formal banking sector, microfinance is a way for poor Togolese to borrow money. The IMF has warned that these institutions are poorly monitored and that the regulations are deficient, which increases the risk of fraud. In addition, traditional “tontine” is popular. These are collective funds where you deposit money and receive payments as long as you live, but where the holding amounts to the fund when you die.
Togo’s currency, the CFA franc, is common to the eight countries of the regional economic cooperation UEMOA (Union Economique et Monétaire Ouest-Africaine) whose aim is to form an economic union. The UEMOA countries have a joint central bank in Dakar in Senegal. Ecowas countries have agreed to introduce a single currency, eco, which will replace the CFA franc.
Togo has long been drawn with deficits in foreign trade, that is, imports are larger than exports. The deficit is covered by the money sent home from Togolese abroad and with loans and assistance from abroad.
In March 2018, Togo was one of 44 African countries that signed the AfCFTA regional free trade agreement. The agreement is seen as a historically important step towards increased trade exchange within Africa. The agreement came into force in May 2019 for the 24 countries, including Togo, which then ratified it.
FACTS – FINANCE
GDP per person
US $ 672 (2018)
US $ 5,300 million (2018)
4.9 percent (2018)
Agriculture’s share of GDP
23.6 percent (2018)
Manufacturing industry’s share of GDP
8.0 percent (2018)
The service sector’s share of GDP
29.1 percent (2018)
1.4 percent (2019)
Government debt’s share of GDP
76.2 percent (2018)
US $ 1,631 million (2017)
Central African Franc
US $ 1,016 million (2017)
US $ 1 658 million (2017)
– US $ 96 million (2017)
Commodity trade’s share of GDP
60 percent (2018)
Main export goods
cotton, phosphate, coffee, cocoa (2017)
Largest trading partner
China, France, Japan, Netherlands, Burkina Faso, Benin, Ghana (2017)
The dictator’s son wins the presidential election
In the presidential election, Faure Gnassingbé, son of Togo’s deceased dictator Gnassingbé Eyadéma, wins (see February 2005). The accusations of electoral fraud are extensive and in violent riots following the election, around 500 people are killed. Thousands of Togolese flee to neighboring countries.
President Gnassingbé Eyadéma dies
President Gnassingbé Eyadéma, who has ruled the country dictatorship for more than 40 years, is dying. Contrary to the Constitution, his son, Faure Gnassingbé, is appointed as his successor but after protests he is forced to resign after promising presidential elections.