IMF to provide Togo with new $390M extended credit facility

Economic governance

Tuesday, 12 December 2023 13:40

IMF to provide Togo with new $390M extended credit facility

(Togo First) - The International Monetary Fund (IMF) will provide Togo with a 42-month financing of $390 million under a new extended credit facility program (ECF).

According to the IMF, the deal, recently signed by the two parties, aims to help Togo meet its urgent spending needs while fostering economic stability and social inclusion.

The agreement was signed after an IMF team visited Lomé, from November 29 to December 8. The delegation met with the Togolese Minister of Economy and Finance, Sani Yaya.

”The IMF team is pleased to announce that we reached a staff-level agreement with the Togolese authorities on a 42-month program supported by an arrangement under the Extended Credit Facility (ECF) in the amount of SDR 293.60 million, or about US$390 million. The authorities’ economic program aims to preserve economic stability and strengthen debt sustainability while laying the foundations for stronger and more inclusive growth. The staff-level agreement is subject to IMF Management and Executive Board approval,” said the team leader, Hans Weisfeld.

On Togo's part, this new support plan involves reforms aimed at increasing tax revenues by 0.5% of GDP per year, broadening the tax base, and reducing the budget deficit to 3% of GDP by 2025. It will also involve rationalizing public spending while aligning with ambitions to strengthen social protection (notably by extending cash transfers, based on the creation of a single social register and a biometric identification platform).

This new FEC agreement concludes months of talks between Togo and the IMF that started in 2020. Togo expected to close the deal in Q1 2023, but it took a few months more.

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REFORMS OVERVIEW

STARTING A BUSINESS (more info)

At the fifteenth position, worldwide, and first in Africa, under the Starting a Business index of the 2020 Doing Business ranking, Togo sustains its reformative dynamics with more reforms….

ENFORCING CONTRACTS (more info)

Compared to some years ago when it was one of the lowest rankers under the Doing Business’ Enforcing Contracts indicator, Togo, leveraging many efforts to improve its business climate, was able to jump significantly on the index in the recent years... .

CONTRACT EXECUTION (more info)

Creation of special chambers of commerce for small debts • Creation of chambers of commerce at the Court of Appeal • Civil and commercial cases now handled by distinct clerks • Establishment of commercial courts in Lomé and Kara • Lawyers and bailiffs now have access to the FORSETI COMMERCIAL platform • A maximum period of 100 days was fixed to settle a commercial dispute .

TRADING ACROSS BORDERS (more info)

In comparison to previous years,Togo has significantly improved its ranking under the“Trading across borders” indicator by adopting multiple reforms that focus mainly on the digitization and reduction in delays, for import and export procedures related to import and export.

In comparison to previous years, Togo has significantly improved its ranking on the “Trading across borders” index by adopting multiple reforms that focus mainly on the digitalization and reduction in delays, for import and export procedures related to import and export.

CONSTRUCTION PERMIT (more info)

After moving from the 133rd to 127th place under the 2020 Doing Business’ construction permit index, Togo intends to reiterate this feat in the coming edition of the global ranking. To this end, it has introduced this year multiple reforms.

GETTING ELECTRICITY (more info)

Over the past two years, Togo’s ranking under the Doing Business’ Getting electricity and water indicator has increased consistently. Owing this performance to multiple reforms aimed at making it easier for businesses to access power and water, Lomé plans to introduce even more reforms this year to keep up its improvements.

REGISTERING A PROPERTY (more info)

Out of all the 'Doing Business’ indicators, Property Registration is where Togo has improved the most since 2018. Indeed, after spending years in the lowest part of this ranking, the country now seeks to beat Rwanda which is the best performer on this index in Africa. To do so, Lomé has been introducing many reforms, with the latest batch implemented this year.

PUBLIC PROCUREMENT (more info)

From professionalization to digitization, through legislative regulations, Togo’s public procurement framework is constantly being modernized. Several reforms have been implemented to improve the sector much to the benefit of the private sector, which is the focus of the National Development Plan.

PAYING TAXES AND DUTIES (more info)

To improve its business environment, Togo introduced some important reforms related to the payment of tax and duties. From the replacement of some taxes to the cancellation of others through exemptions, the country has only one objective: offer the most attractive tax framework to investors and economic operators. To achieve this, the authorities relied on digitization.