Togo Shifts Focus to Concessional Credits to Reduce Debt Costs

Public finance

Monday, 17 June 2024 17:52

Togo Shifts Focus to Concessional Credits to Reduce Debt Costs

(Togo First) - In a bid to cut debt costs, Togo's public administration is rethinking its external debt and capital mobilization strategy, looking to concessional loans. This is outlined in the country's new Medium-Term Debt Strategy (SDMT) 2024-2026.

The strategy aims to reduce the exposure of public debt to refinancing risks by extending the average maturity of outstanding public debt and making greater use of concessional debt to control debt servicing.

"The idea is really to no longer be subject to complex or very expensive financing, particularly market financing," explained Stéphane Akaya, Secretary General of the Ministry of Economy and Finance.

The goal here is for Togo “to position itself to take advantage of concessional resources”, particularly from multilateral partners and development players such as the World Bank, the International Monetary Fund (IMF), the African Development Bank (AfDB), and the Millennium Challenge Corporation (MCC).

World Bank, IMF, AfDB…

To date, Togo has concluded or is in the process of concluding several operations with multilateral partners for concessional financing exceeding $1.5 billion.

According to Stéphane Akaya, the country has signed a $612 million facility agreement with the World Bank under the New Partnership Framework and is set to receive nearly $400 million in financing from the IMF over the next 42 months. Additionally, Togo is on track to seal a $200 million deal with the AfDB and eyes at least $400 million from the MCC for energy and ICT development projects. Meanwhile, the German cooperation has a portfolio of nearly $100 million in the West African country.

Achieving parity by 2026

One of the country's other objectives is to rebalance its debt portfolio towards more external debt, to achieve parity between domestic and foreign debt by 2026.

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.