Togo plans to raise around CFA550 billion to finance its economy this year

Public finance

Saturday, 05 February 2022 13:14

Togo plans to raise around CFA550 billion to finance its economy this year

(Togo First) - As in recent years, Togo will rely heavily on the regional financial market to fund a large part of its 2022 budget. The country will mainly rely on long-dated bonds, based on a successful issue of a 15-year bond at the end of 2021.

While the amount set in Finance Act for the issues it plans to carry out on the regional money market in 2022 stands at CFA533 billion, the Togolese treasury will attempt to seek more. Scheduled dates for the bond issues were unveiled last week at the 4th edition of the Public Securities Market Meetings, organized by the UMOA-securities Agency.

Five hundred and fifty billion CFA. That’s the actual amount the treasury hopes to secure from regional investors throughout the year. While significant, the figure, which was revealed by Kname Bouaré, Head of the Forecasting Division at the General Directorate of the Treasury and Public Accounts, is lower than the CFA570 billion Lomé raised on the same market last year.

Last month alone, the country, let’s recall, closed two successful rounds on this market, in a context where its target for Q1 2022 is CFA180 billion.

Out of the CFA550 billion targeted, Togo intends to secure CFA450 billion or 81% of the total by issuing fungible treasury bonds. Half of this amount should come from 7, 10, and 15-year bonds. This is in line with the country’s debt strategy which aims to reduce its financing risk related to its domestic debt, by favoring long maturities.”

“With UMOA-securities, this year, we are going to carry out one, or more, large operations to absorb the amounts to be mobilized […] a systematic replenishment of securities to reduce the fragmentation of securities issued to constitute deposits of CFA70 to 80 billion,” Bouaré said.

For 2022, Togo’s financing needs amount to CFA697 billion and over 70% of this sum—CFA533 billion—is expected to come from the regional financial market. At the moment, the country is negotiating with IMF for the remainder, and if they strike an agreement, Togo could issue a Eurobond to achieve its goal.

Fiacre E. Kakpo

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