In Togo, new entrepreneurs are not fazed by Covid-19

Investments

Wednesday, 13 October 2021 12:07

In Togo, new entrepreneurs are not fazed by Covid-19

(Togo First) - Despite the persistent health crisis, the number of businesses started in Togo should reach a new high this year.

By the end of September 2021, official data shows that 10,806 new businesses were registered in Togo. This represents a 13.4% increase compared to the 9,527 businesses registered over the first three quarters of 2020. The upward trend - recorded over the past few years - is attributable to several reforms introduced by the government to boost the business climate.

Business registration keeps rising

Looking at data compiled by Togo First, the upward trend was most noticeable between February and June. At the time, the Central Bank of West African States (BCEAO) put GDP growth above 10% (Q2 2021).

In July, the dynamics slowed but jumped back in August, at a slower pace, however; a situation caused by a resurgence in the number of Covid cases (delta variant), which led the government to take new restrictive measures. According to several observers, business registrations could reduce due to the measure enforcing the presentation of a vaccine pass before accessing administrative buildings.

The life expectancy of businesses

Fifteenth (15th) in the world and 1st in Africa in the 2020 Doing Business (DB) ‘Starting a Business' indicator, Togo maintains its reform dynamic. The country does not plan to stop, according to Sandra Johnson, Minister, Secretary-General of the Presidency in charge of the business climate, the linchpin of the economic reforms initiated since late 2017.

Regarding the life expectancy of businesses in Togo, a recent study carried out by the Center for Business Formalities (CFE) revealed that over 70% of businesses created between 2010 and 2015 were still active in 2018. Half of these firms, the study noted, derived their earnings from 10 clients, maximum, and these clients were either big clients or big companies. However, private individuals remain the most important clients of Togolese companies.

The same report notes that problems relating to outlets and access to financing represent 70% of the difficulties encountered by entrepreneurs.

It is worth emphasizing that over 70% of businesses registered in Togo are small-sized companies, and they were greatly hit by the pandemic and measures taken to counter it.

Greater support for MSMEs

Last August, the government updated and validated the charter of micro, small and medium enterprises (MSMEs), in a context where they have the most trouble accessing markets (outlets and financing).

The reform should allow these businesses to easily access land, help them secure certifications, and get financing. Regarding the latter, the BCEAO estimates that nearly 70% of bank loans go to the private sector (7% - 8% to individual businesses).

“This charter will allow SMEs to form a strong unit, and this will help them access funding mechanisms,” said the Minister of Communication and Media, Prof Akodah Ayewouadan.

Fiacre E. Kakpo

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.