Togo: S&P Upgrades Sovereign Rating to 'B+' on Solid Economic Outlook

Economic governance

Monday, 21 April 2025 16:18

Togo: S&P Upgrades Sovereign Rating to 'B+' on Solid Economic Outlook

(Togo First) - On April 18, 2025, S&P Global Ratings bumped Togo’s sovereign credit rating from 'B' to 'B+', citing steady economic growth and stronger fiscal management. The outlook remains stable.

Togo is now one of West Africa’s fastest-growing economies. S&P projects its GDP will grow an average of 6% annually through 2028. According to the Ratings agency, this growth will be driven by rising private consumption, controlled inflation, and key infrastructure investments. Despite global shocks like the COVID-19 pandemic and the Ukraine war, the Togolese economy remains steady.

“The upward revision reflects our conviction that Togo will make progress in its economic and fiscal reforms, notably via improved tax revenue mobilization,” S&P said. “We forecast average annual GDP growth of 6.0% between 2025 and 2028, a higher level than in similarly developed countries. Business-friendly reforms and public investment in key infrastructure will support economic diversification.”

At the core of this growth is Lomé’s deepwater port, expected to handle 30 million tonnes in 2024, up from 14 million in 2016. Nearly 70% of this is transshipment traffic, cementing Togo’s role as a regional logistics hub. The Adétikopé industrial hub is also attracting local and international investors in cotton, soybean processing, and textiles. “Private investments representing 2.6% of GDP are already underway,” S&P noted, totaling about CFA160 billion.

On the public finances front, Togo is also making improvements. The 2024 budget deficit shrank to 4.6% of GDP from 6.7% in 2023. The government aims to cut it to 3% by 2027 through higher tax revenues and smarter spending. Public debt, which rose sharply after COVID and the Ukraine crisis, should fall to about 52% of GDP by 2028 from nearly 60% now.

Togo is also changing its financing strategy. After years of costly borrowing on regional markets with high interest rates and short maturities, Lomé is shifting to cheaper external funding. This year, it has already secured $200 million from the World Bank and plans two guaranteed commercial loans totaling €350 million.

Still, challenges remain. Per capita income is low, and much of the economy is informal. Security tensions in northern Togo, linked to crises in Burkina Faso and Niger, could add budget pressure, S&P warned.

This article was initially published in French by Fiacre E. Kakpo

Edited in English by Ange Jason Quenum

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.