On September 22, Togo announced the rebase of its GDP, which jumped by more than 36.5% at the same time. An operation that allows the country to adapt its development plan to economic and social reality, and to increase its debt capacity.

With just over 3,100 declared cases, including 65 deaths as of 8 December, or 4 cases per 100,000 inhabitants, Togo has so far been relatively untouched by the Covid-19 pandemic. A miracle that did not happen on an economic level. The Togolese government had to reduce its GDP growth rate for 2020, to “only” 0.7%, or even 0% according to projections published by the IMF in October. Not bad, certainly, considering the recession that is affecting most economies on the continent and the planet. But the forecasts in the 2018-2022 National Development Plan (PND) are completely upset.

Also, two years before the expiry of this strategic document designed to structurally transform the Togolese economy for “strong, sustainable, resilient, inclusive growth that creates decent jobs for all, etc.”, its authors will have to deploy new modelling treasures.

Less dependency

This development plan, drafted, in particular, with the expertise of the French socialist Dominique Strauss-Khan, was structured around three major axes: making Togo a logistics platform and a financial hub of excellence; developing agricultural, manufacturing and extractive industries transformation hubs; consolidating social development and inclusion.

Under the effect of the Covid-19 pandemic, the balance between these three aspects has obviously been upset, with the government being forced to reallocate resources, in particular in favour of the third social axis. An operation that will undoubtedly contribute to increasing the staggering amount of 4,622 billion CFA francs (more than 7 billion euros) planned to finance the PND.

Already, in a context of global economic recession and uncertainty for businesses, the strategy for mobilizing these resources, initially based on support from the domestic private sector, up to 65%, and the contribution of foreign investors, up to 35%, will inevitably be reviewed. As Sani Yaya, the Minister of Economy and Finance, recognized as early as 25 August, during the review of the performance of reforms, the country's entire economic model needs to be redesigned to make it less dependent on the outside world and more resilient to exogenous shocks.

New roadmap 2020-2025

A new 2020-2025 roadmap is therefore expected from the PND review process. While the three initial strategic axes remain, they should be complemented by new priorities: on the one hand, the effectiveness of public action through the modernization and digitalization of administration and the economy, on the other hand, the productivity of private actors and, finally, to ensure better resilience of health, education and social systems to do so in the face of future crises.

To support growth, economists working on the project predict cumulative investments of 2.8 trillion to 3.4 trillion CFA francs over the next five years, which, according to the best scenario, should bring the growth rate to 7.8% in 2025, while the initial PND expected to reach a growth rate of 7.6% by 2022.

Revaluation transaction

Despite the Covid-19 pandemic and its economic and social consequences, Togo is not reducing its ambitions, it is just increasing the length of the road to achieve its goals. The rebasing operation carried out last September to update the system for calculating national accounts has undoubtedly helped to keep the country's optimism intact.

Thanks to this revaluation, for 2019, Togo's GDP was revised up by 36.5% and the debt ratio adjusted to 51.9%, the country is therefore regaining room for manoeuvre to increase public investments and carry out actions with a strong social impact, which should, it is hoped, help private economic actors to deal with the coronavirus and its consequences.

SIFIJA SCA - Jeune Afrique Group