How has the Covid-19 impacted businesses in Togo?

Economic governance

Tuesday, 15 September 2020 17:15

How has the Covid-19 impacted businesses in Togo?

(Togo First) - Around one out of four (23.1%) of businesses ceased operations in Togo after the government imposed restrictive measures to contain the spread of Covid-19. Out of those, only 2% of them had to shut down completely.

The World Bank revealed this in its latest report of the economic situation in Togo, published on Sept. 8. The related study was conducted at the beginning of June and businesses surveyed had been closed for about 10 weeks.

Impact of shutdowns: Size matters

According to the document, small and big businesses responded to the closure differently. Big firms were more resilient than small ones.

“Closing rates vary depending on the size of businesses and are higher for micro and medium businesses (22-30%) than for big businesses (around 13.6%),” the report states. No big business was shut down at the time of the study.

Additionally, the World Bank noted that SMEs that closed down were those without appropriate protection against the crisis. According to the institution’s pundits, they were already going through tough times or had difficulties getting emergency funding, unlike big companies.

Fewer local businesses closed

Similarly, there is a disparity between businesses owned by Togolese citizens and foreigners.

“Almost 42% of the private companies owned by foreigners have closed, against around 20% of local private firms.”

A significant impact on earnings

In terms of revenues, according to the WB, the pandemic had a significant impact on businesses' earnings.

Here, however, the fall did not vary based on the size or the sector of activity of businesses.

Data available indicates that “96.2% of businesses reported a drop in sales in the past 30 days.” Let’s recall that according to the report, around 62% of jobs were affected, including 49% in services and 13% in the industrial sector.

Ayi Renaud Dossavi

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.