## Togo’s new Poverty Reduction Strategy—Strategy for Boosting Growth and Promoting Employment (SCAPE) 2013–2017

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### Overview and strategic framework
- Adopted by the Government of Togo on August 29, 2013.
- Objective: make Togo a middle income country over the next 15–20 years with respect for the rule of law and human rights.
- Four critical challenges addressed by SCAPE:
  - (i) accelerate economic growth and employment creation,
  - (ii) improve governance,
  - (iii) deal with demographic challenges, high population growth in particular,
  - (iv) enhance urban development, improve land use and protect the environment.
- Five pillars:
  - (i) developing sectors with high growth potential,
  - (ii) strengthening economic infrastructure,
  - (iii) developing human capital, social protection and employment,
  - (iv) strengthening governance,
  - (v) promoting participation and a balanced and sustainable pattern of development.
- Preparation: roadmap, studies and data collection (including a new household survey), national forum (December 2011) with more than 200 participants, national evaluative meeting (March 2012), Priority Action Plan and Strategic Results Framework prepared by the Ministry of Planning, Development and Management of the Territory.

### Poverty, access to services, and distributional outcomes
- Data sources: nationally representative household survey (QUIBB) fielded in 2011; comparable to 2006 survey; two MICS surveys (2006 and 2010).
- Key statistics:
  - "59 percent of the population was poor in 2011."
  - Regional poverty: "91 percent in the Northern Savanes region" to "33 percent in Lomé."
  - "Poverty declined marginally since 2006 when poverty was about 62 percent."
  - Gini coefficient: "0.36 in 2006" to "0.39 in 2011."
  - Primary school enrollment: "only about 82 percent of eligible children attended primary school."
  - Secondary school enrollment: "50 percent."
  - Water access: "56 percent of households had access to safe drinking water" in 2011, up from "51 percent in 2006."
  - Electricity access: Lomé "84 percent in 2011" (up from "73 percent in 2006"); rural access "only 10 percent of rural households could access to electricity in 2011" despite a doubling from 2006.
  - Health service utilization: hospital visits in urban areas dropped "from 37 percent to 23 percent"; in rural areas dropped "from 16 percent to 12 percent."
  - Growth incidence (2006–2011): consumption of the poorest forty percent declined or stagnated; improved for the top six deciles — "the poorest got poorer while the wealthiest became better off."
- Staff concerns and recommended priorities:
  - Concern about rising inequality and deepening poverty; risk to social cohesion.
  - Recommend deepening analysis of SCAPE policies’ impact on poverty and employment.
  - Prioritize programs to guarantee equal access to social services in health, education and water irrespective of location.
  - Prioritize development of agricultural potential beyond cotton and cocoa to include marketable food crops like maize and rice to achieve pro-poor benefits (increased farm incomes, downward pressure on food prices, and demand for casual labor).

### Macroeconomic performance, debt, and growth scenarios
- Recent macro performance:
  - "Real economic growth accelerated to over 5 percent in 2012–13," driven by agriculture, mining, construction, and public works.
  - Inflation: consumer prices "fell below 2.5 percent during 2012–13."
- Debt and external vulnerabilities:
  - External debt: "15.6 percent of GDP at end-2011" rose to "18.9 percent of GDP at end-2013."
  - Recognized stock of domestic debt: "25.1 percent of GDP."
  - Total debt: "44 percent of GDP."
  - External position fragile due to vulnerability to external shocks and large current account deficits.
- SCAPE growth scenarios (2013–17):
  - Baseline scenario:
    - Builds on average "4.1 percent growth between 2009 and 2011."
    - Assumes acceleration to an average "5.9 percent per year between 2013 and 2017."
    - Under baseline: poverty declines by "about 11 percentage points, to 47.3 percent in 2017"; under-employment declines by "3.5 percentage points, to 22.8 percent."
  - Accelerated growth scenario:
    - Targets "7.1 percent per year between 2013 and 2017."
    - Supported by agricultural modernization and mining development.
    - Government revenue rises from "19.3 percent of GDP in 2013 to 25.3 percent by 2017."
    - Poverty declines to "43.5 percent in 2017 (down 15 percentage point)." With effective redistributive policies poverty could fall further to "39.2 percent."
    - This is the authorities’ preferred scenario.
- Staff macro and financing guidance:
  - Both scenarios require prioritized and robust implementation of public investments, a more effective and efficient public sector, and structural reforms in transport, electricity, telecommunication, and the business environment.
  - Ensure financing is contracted in concessional terms; hold a donors roundtable meeting; ensure consistency with macroeconomic stability and debt sustainability; avoid reliance on expensive commercial financing.
  - Fiscal practice concerns: sharp deterioration in the fiscal position with increased current expenditure (fuel subsidies, wage bill, transfers) while public investment execution rates were "around 60 percent."
  - Need better planning, prioritization, and execution management of expenditures.
  - Recommend inclusion of a low growth scenario in SCAPE given risk of policy slippages and shocks; 2013 growth outturn already lower than baseline projection.

### Strategic Pillar A — Development of sectors with strong growth potential (agriculture, industry, services)
- Agriculture objectives and SCAPE actions:
  - Strategic objective: boost productivity through modernization and mechanization.
  - Specific actions:
    - construction of feeder roads "1,500 km per year",
    - securing financing for at least "500,000 small producers",
    - increasing land under cultivation "by at least 2,500 hectares per year",
    - doubling fertilizer use.
  - Budget target: "at least 10 percent of the national budget should be allocated to agriculture."
  - Success depends on completion of PNIASA—Programme National d’Investissement Agricole et de Sécurité Alimentaire—and effective fund mobilization.
- Staff recommendations on agricultural strategy:
  - Emphasize prioritization and clear public sector role given capacity and budget constraints.
  - Reform existing food security and fertilizer provision programs given large budget shares and limited results.
  - Prioritization should consider the needs of the poorest households to improve targeting and raise rural growth and reduce inequalities.
- Industry and services:
  - SCAPE stresses development of industry and services exploiting comparative advantages (agricultural and mineral resources, deep sea port).
  - Staff welcome emphasis on strengthening financial intermediation and trade; a more elaborated growth strategy is being prepared under the Ministry in charge of Prospectives and the Evaluation of Public Policies.

### Strategic Pillar B — Strengthening economic infrastructure (energy, transport, telecom)
- Rationale:
  - Critical constraints: poor telecommunication and energy infrastructures, high production and service costs, deficient service provision, unfavorable business climate.
  - Doing Business ranking: "156, out of 185 countries" (2013).
- Development corridor and major project cautions:
  - Staff recommend routine cost-benefit analyses for large projects.
  - Concerns cited:
    - Expansion of Niamtougou airport justification questioned.
    - New rail line to Burkina estimated cost "1,500 billion CFAF (75 percent of GDP)"; requires economic viability assessment tied to mining and Burkina Faso linkages.
- PPPs and institutional capacity:
  - Togo Invest Corporation (TIC) tasked with implementing corridor, energy and industrial projects.
  - Most large-scale investments expected as PPPs; historical PPP experience has been poor and some PPPs were costly and litigious.
  - Staff recommendation: implement PPP approach gradually, develop capacity to manage PPPs, and establish necessary institutional and legal frameworks.
- Electricity and energy sector specifics:
  - More than two-thirds of electricity demand is covered by imports; vulnerability to unstable suppliers.
  - Staffs support rapidly increasing generation capacity and opening grid access for independent producers.
  - Adoption of the most cost-effective generation means is critical to reach the poor and improve competitiveness.
  - Staffs recommend careful study of economic justification for proposed projects including the 5 MW solar plant and the 12 MW wind power plant.
- Telecommunications:
  - Commitments to unleash telecommunications growth are commendable; sector shows rapid mobile growth.
  - New telecommunications act of 2013 can open access for competition but requires concrete implementation.
  - Staff recommendations:
    - issuing additional licenses for mobile operators,
    - increasing data capacity,
    - enhancing competition in the internet sector,
    - guaranteeing equal access to certain infrastructures.

### Human capital, health, social protection, and governance
- Education:
  - Education budget allocations rose to "4.6 percent of GDP in 2011," up from "3.5 percent of GDP in 2007."
  - ESP adopted in March 2010; primary school tuition abolished in 2008.
  - SCAPE objective: universal access to primary education by 2020; boost resources for non-primary training.
  - Staff highlight low learning outcomes: SDI evaluations show huge deficiencies and large inequalities; high teacher absenteeism and many teachers lack basic knowledge in reading, mathematics and pedagogy.
  - Capacity targets include: close to 5,000 additional students in public higher education institutions between 2012 and 2016, about 2,500 additional students in private ones, creation of six new teacher training colleges, building 850 new classrooms and hiring 1,750 new teachers per year — staff note these are ambitious given skills and funding constraints.
  - Staff recommend an assessment to reduce risk of mismatch between supply and demand for skills and urge prioritization consistent with implementation capacity.
- Health sector and social protection:
  - Progress limited; Togo far behind on 2015 MDG targets with large regional disparities.
  - Some improvements: maternal and child health, immunization coverage, stabilizing HIV/AIDS.
  - Share of total expenditure allocated to health remains far below the 15 percent threshold agreed in the Abuja Declaration.
  - Staffs support SCAPE objectives: decentralize health services; reduce regional and social inequalities in supply and access; address unfairness in geographic allocation of human resources; promote and increase use of health facilities; increase financing of the health system.
  - Staffs urge linking objectives to actionable policy measures, improving managerial capacities, spending prioritization and sequencing of reforms; filling the current vacancy for Minister of Health is noted as a small but significant step.
- Social safety nets and inequality:
  - SCAPE acknowledges social safety nets but falls short on scaling-up concrete programs.
  - Staff recommend school feeding programs and (conditional) cash transfer schemes as integral parts of poverty reduction.
  - A recent Bank staff paper cited shows large-scale cash transfer programs are needed to eliminate poverty by 2030 and can be partly financed by reallocating pro-rich fuel subsidies.
  - Staffs encourage routine assessment of equity of service provision; Figure 3 (Salary Spending per Student, per Region, 2010–11) is cited as illustrative.
- Strengthening governance:
  - SCAPE proposes political, administrative/local, and economic governance reforms.
  - Prior recommendations (Ex-Post Assessment of the IMF’s Longer Term Program Engagement, 2006) emphasized fiscal management, autonomy of public enterprises, financial sector reform, and capacity building in budget, tax/customs, banking supervision, and statistics.
  - Staffs welcome commitment but express concern over repeated delays, poor budget planning, and persistent capacity constraints.
  - Consequences: inability to finalize an IMF program since August 2011; World Bank budget support not disbursed since August 2012; limited donor access and negative investment image.
  - Staffs urge improvement in budget planning, addressing capacity constraints, and resuming governance reform momentum.

### Monitoring, evaluation, and implementation challenges
- Institutional arrangements:
  - National Council for Overseeing Development Policies (CNPPD—chaired by the Prime Minister),
  - Technical Secretariat of the PRSP,
  - Sector Committees (SCs),
  - Government/Donor Liaison Committee,
  - regional and local participatory monitoring committees.
- Strategic Measurement Matrix (SMM):
  - 31 high level outcome indicators (such as poverty) to be assessed by the end of the program,
  - 64 intermediate indicators (such as growth rates) collected yearly.
- Implementation and data issues:
  - World Bank financing of PRCSET to strengthen monitoring and evaluation capacity.
  - Technical secretariat prepares quarterly and bi-annual reports, updates annually the Program of Priority Actions, and from year two prepares evaluative studies.
  - Staff find the institutional framework "elaborate and heavy"; implementation and monitoring-evaluation are poorly integrated with decision-making; primacy of SCAPE reforms is unclear.
  - Robust social and physical data remain scarce; data collection costs and consistency over time are ongoing challenges.

### Conclusions and prioritized policy recommendations
- Overall assessment:
  - SCAPE is comprehensive and ambitious, addressing four critical challenges and built around five pillars, but offers less in terms of prioritization given capacity and financing constraints.
  - SCAPE is useful for consensus-building but lacking clear priorities and actionable strategies risks poor guidance for development and a disconnect with budgeting and financial means.
- Staffs’ key recommendations:
  - Supplement SCAPE with assessments on impacts of policies on poverty, inequality (of service delivery) and (rural) employment to devise more inclusive policies.
  - Strongly encourage improving quality of learning and making school feeding and cash transfer programs integral to the poverty reduction strategy.
  - Fit SCAPE into the long-term growth strategy under preparation, taking better account of capacity and financing constraints and differing requirements for productive, infrastructure, and social investments.
  - Accelerate implementation of critical structural and governance reforms to realize SCAPE growth scenarios, including:
    - restructuring of the banking and microfinance sectors,
    - making the telecommunications sector more competitive,
    - stabilizing the electricity sector,
    - opening up mining to private investment,
    - improving the business environment.
  - Urge greater attention to fiscal sustainability, planning and prioritizing expenditures, and improving execution management.
  - Ensure new external financing is concessional and consistent with debt sustainability; avoid reliance on expensive commercial financing.
  - Include a low growth scenario in SCAPE planning given risks of slippages and shocks.

*International Monetary Fund staff summary as presented in the provided content unit.*

### 1.      Togo’s new Poverty Reduction Strategy—Strategy for Boosting Growth and

### Togo’s new Poverty Reduction Strategy—Strategy for Boosting Growth and Promoting Employment (SCAPE) 2013–2017

### Overview
- Adopted by the Government of Togo on August 29, 2013.
- Presents the overarching reference framework for the Government’s development agenda and aspires to make Togo a middle income country over the next 15–20 years with respect for the rule of law and human rights.
- Identified four critical challenges addressed by SCAPE: (i) accelerate economic growth and employment creation, (ii) improve governance, (iii) deal with demographic challenges, high population growth in particular, and (iv) enhance urban development, improve land use and protect the environment.
- SCAPE’s five pillars: (i) developing sectors with high growth potential, (ii) strengthening economic infrastructure, (iii) developing human capital, social protection and employment, (iv) strengthening governance, and (v) promoting participation and a balanced and sustainable pattern of development.
- Preparation process: roadmap, studies and data collection (including a new household survey), national forum (December 2011) with more than 200 participants, national evaluative meeting (March 2012), priority actions (PAP) identified, draft validated through national consultations, adopted by Cabinet. The Ministry of Planning, Development and Management of the Territory prepared a Priority Action Plan and Strategic Results Framework.

### Poverty and access to services
- Data sources: nationally representative household survey (QUIBB) fielded in 2011; comparable to 2006 survey; two MICS surveys (2006 and 2010).
- Key poverty statistics:
  - "59 percent of the population was poor in 2011."
  - Poverty by region: "91 percent in the Northern Savanes region" to "33 percent in Lomé."
  - "Poverty declined marginally since 2006 when poverty was about 62 percent."
  - Gini coefficient: "0.36 in 2006" to "0.39 in 2011."
- Education:
  - Abolishment of school fees in 2008 led to higher net enrollment in primary.
  - Share attending public schools: "58 percent in 2006/07" to "72 percent in 2011/12."
  - Primary school enrollment: "only about 82 percent of eligible children attended primary school."
  - Secondary school enrollment: "50 percent."
- Water access:
  - "56 percent of households had access to safe drinking water" in 2011, up from "51 percent in 2006."
  - Lomé: "69 percent to 83 percent"; virtually no progress in rural areas.
  - Poorest forty percent saw access decline; top two wealth quintiles saw access increase.
- Health access:
  - Deterioration particularly for the poorest forty percent.
  - Hospital visits in urban areas dropped "from 37 percent to 23 percent"; in rural areas dropped "from 16 percent to 12 percent."
  - Doctor visits increased marginally.
- Electricity access:
  - Lomé: "84 percent in 2011" (up from "73 percent in 2006").
  - Rural access: "only 10 percent of rural households could access to electricity in 2011" despite a doubling from 2006.
- Regional disparities:
  - Access to services deteriorates with distance from the coast; coastal region records higher growth and services access.
  - Growth incidence (2006–2011): consumption of the poorest forty percent declined or stagnated, improved for the top six deciles — "the poorest got poorer while the wealthiest became better off."
- Staff concerns and recommendations:
  - Concerned about rising inequality and deepening poverty; persistent inequality could strain social cohesion.
  - Recommend deepening analysis of the impact of SCAPE policies on poverty and employment.
  - Prioritize programs to guarantee equal access to social services in health, education and water irrespective of location.
  - Prioritize development of agricultural potential beyond cotton and cocoa to include marketable food crops like maize and rice to achieve pro-poor benefits (increased farm incomes, downward pressure on food prices, and demand for casual labor).

### Macroeconomic policies and framework
- Recent macro performance:
  - "Real economic growth accelerated to over 5 percent in 2012–13," driven by agriculture, mining, construction, and public works.
  - Inflation: consumer prices "fell below 2.5 percent during 2012–13."
- External and public debt vulnerabilities:
  - External position fragile due to vulnerability to external shocks and large current account deficits.
  - Public debt concerns due to rapid accumulation of new debt after HIPC completion point (December 2010), including recognition of debts of liquidated public enterprises and arrears by municipalities.
  - Debt stocks: external debt "15.6 percent of GDP at end-2011" rose to "18.9 percent of GDP at end-2013"; recognized stock of domestic debt "25.1 percent of GDP"; total debt "44 percent of GDP."
- Growth scenarios in SCAPE (2013–17):
  - Baseline scenario:
    - Builds on average "4.1 percent growth between 2009 and 2011."
    - Assumes acceleration to an average "5.9 percent per year between 2013 and 2017."
    - Under baseline: poverty declines by "about 11 percentage points, to 47.3 percent in 2017"; under-employment declines by "3.5 percentage points, to 22.8 percent."
  - Accelerated growth scenario:
    - Targets "7.1 percent per year between 2013 and 2017."
    - Supported by agricultural modernization and mining development.
    - Revenue increase: government revenue rises from "19.3 percent of GDP in 2013 to 25.3 percent by 2017."
    - Poverty declines to "43.5 percent in 2017 (down 15 percentage point)." With effective redistributive policies poverty could fall further to "39.2 percent."
    - This is the authorities’ preferred scenario.
- Staff observations and policy guidance:
  - Both scenarios require prioritized and robust implementation of public investments, a more effective and efficient public sector, and structural reforms in transport, electricity, telecommunication, and the business environment.
  - Financing guidance: ensure financing is contracted in concessional terms; hold a donors roundtable meeting; ensure consistency with macroeconomic stability and debt sustainability; avoid reliance on expensive commercial financing; ensure level and concessionality of new external financing are consistent with avoiding deterioration of the already moderate risk rating.
  - Fiscal practice concerns: despite progress in revenue mobilization, witnessed sharp deterioration in the fiscal position with much increased spending on current expenditure (fuel subsidies, wage bill, transfers) while public investment execution rates were "around 60 percent."
  - Need better planning, prioritization, and execution management of expenditures.
  - Structural reforms needing acceleration: restructuring financial sector (state-owned banks and micro-finance), increasing telecommunications competition, securing electricity availability, opening mining sector to private investment, and improving business environment.
  - Reforms to micro-finance and telecom sectors expected to be particularly relevant for the bottom forty percent.
  - Recommended inclusion of a low growth scenario in SCAPE given risk of policy slippages and shocks; 2013 growth outturn already lower than baseline projection.

### Strategic pillars — A. Development of sectors with strong growth potential
- Agriculture:
  - Strategic objective: boost productivity through modernization and mechanization.
  - Specific SCAPE actions: (i) construction of feeder roads "1,500 km per year", (ii) securing financing for at least "500,000 small producers", (iii) increasing land under cultivation "by at least 2,500 hectares per year", and (iv) doubling fertilizer use.
  - Success dependent on completion of PNIASA—Programme National d’Investissement Agricole et de Sécurité Alimentaire—and effective fund mobilization.
  - Budget target: "at least 10 percent of the national budget should be allocated to agriculture."
- Staff recommendations on agricultural strategy:
  - Emphasize prioritization and clear public sector role given capacity constraints and limited budgets.
  - Reform existing food security and fertilizer provision programs given their large budget shares and limited results.
  - Prioritization should consider the needs of the poorest households (e.g., whether poor households grow cotton) to improve intervention targeting and raise rural growth and reduce inequalities.
- Industry and services:
  - SCAPE stresses development of industry and service sectors; staff welcome emphasis on comparative advantages (agricultural and mineral resources, deep sea port) and on strengthening financial intermediation and trade.
  - A more elaborated growth strategy is being prepared under the Ministry in charge of Prospectives and the Evaluation of Public Policies.

### Strategic pillars — B. Strengthening economic infrastructure
- Rationale:
  - Critical constraints: poor telecommunication and energy infrastructures, high production and service costs, deficient service provision, unfavorable business climate.
  - Togo’s Doing Business ranking: "156, out of 185 countries" (2013).
  - Priority to improving economic infrastructure to open access to internal, regional and international markets is justified.
- Development corridor and major projects:
  - Staff questions on economic justification for the development corridor concept; recommend routine cost-benefit analyses for large projects.
  - Example concerns:
    - Expansion of Niamtougou airport justified in SCAPE to serve Hajj pilgrims and transport off-season produce — staff question this rationale.
    - New rail line to Burkina border estimated cost "1,500 billion CFAF (75 percent of GDP)"; needs exploration of economic viability tied to iron ore and manganese mines and linkages in Burkina Faso given limited demand for Sahel-originating transport services.
- Institutional and capacity constraints:
  - Togo Invest Corporation (TIC) tasked with implementing corridor, energy and industrial projects.
  - Most large-scale investments expected as public private partnerships (PPPs).
  - Historical experience with PPPs in Togo has been poor; some PPPs turned costly and litigious.
  - Staff recommendation: implement PPP approach gradually, allowing time to develop capacity to manage PPPs and put in place necessary institutional and legal framework.

*International Monetary Fund staff summary based on the SCAPE 2013–2017 document.*

### 32.      Staffs support the objective to rapidly increase electricity production and develop

### _cr14225 - 32.      Staffs support the objective to rapidly increase electricity production and develop

### Electricity and energy sector
- More than two-thirds of electricity demand is covered by imports; Togo is vulnerable to unstable suppliers.
- Expanding electricity generation is welcomed as it targets a major growth bottleneck.
- Staffs urge the authorities to:
  - make rapid progress on generation capacity, and
  - open access to the grid for independent producers.
- Adoption of the most cost-effective means of electricity generation is critical to bring electricity to the poor and make the economy more competitive.
- Staffs recommend careful study of the economic justification for some proposed projects, including the 5 MW solar plant and the 12 MW wind power plant.

### Telecommunications
- Commitments to unleash the growth potential of the telecommunications sector are commendable.
- Rapid growth in mobile phone connections indicates the sector’s growth potential.
- The new telecommunications act of 2013 can open access to networks for enhanced competition and lower user costs, but policy intentions must be effectuated with concrete actions.
- Staffs recommend:
  - issuing additional licenses for mobile operators,
  - increasing data capacity,
  - enhancing competition in the internet sector, and
  - guaranteeing equal access to certain infrastructures.

### Developing human capital — education
- Education budget allocations rose to represent 4.6 percent of GDP in 2011, up from 3.5 percent of GDP in 2007.
- The Educational Sector Plan (ESP) was adopted in March 2010; primary school tuition was abolished in 2008.
- The SCAPE’s objective is to offer universal access to primary education by 2020 and to boost resources for non-primary training.
- Staffs emphasize urgency in addressing low levels of learning in primary schools:
  - Service Delivery Indicator (SDI) evaluations of grade 4 students and their teachers reveal huge deficiencies and large inequalities.
  - Teacher absenteeism is high and a majority of teachers lack basic knowledge in reading, mathematics and pedagogy.
- Staffs note potential trade-offs under budget constraints: addressing the quality crisis might require making a trade-off with other SCAPE objectives, including universal primary school access.
- Targets and capacity concerns:
  - The drive to expand secondary and vocational education includes targets for higher retention rates, lower repetition rates, and higher enrollment into vocational training.
  - Higher education targets: close to 5,000 additional students in public institutions between 2012 and 2016, and about 2,500 additional students in private ones.
  - The envisaged creation of six new teacher training colleges is welcome but unlikely to be sufficient.
  - Building 850 new classrooms and hiring 1,750 new teachers per year is highlighted as a tall order given skills and funding constraints.
- Staffs recommend complementing SCAPE with an assessment to reduce the risk of a costly mismatch between the supply and demand for skills.
- Staffs encourage authorities to prioritize objectives for the education sector and pay attention to prevailing implementation capacities.

### Health sector and social protection
- Progress in the health sector has been limited; Togo is far behind on the 2015 MDG targets with large regional disparities.
- Some improvements: maternal and child health, immunization coverage, and stabilizing HIV/AIDS.
- The share of total expenditure allocated to health remains far below the 15 percent threshold agreed in the Abuja Declaration.
- Staffs support SCAPE strategic objectives to set up an effective, accessible and equitable health system, including intentions to:
  - decentralize health services;
  - reduce inequalities between regions and social strata in supply and access to health services;
  - address unfairness in geographic allocation of human resources;
  - promote and increase use of health facilities; and
  - increase financing of the health system.
- Staffs urge establishment of a clear connection between objectives and actionable policy measures and stress the need for better managerial capacities, spending prioritization and adequate sequencing of reforms.
- Filling the current vacancy for Minister of Health is noted as a small but significant step to alleviate managerial challenges.

### Social safety nets and inequality
- SCAPE acknowledges social safety nets can reduce extreme poverty and social vulnerability but falls short on policy and programs for this purpose.
- Proposed measures are largely administrative and do not suggest scaling-up existing social safety nets.
- In context of large economic inequalities, school feeding programs and (conditional) cash transfer schemes are recommended.
- A recent Bank staff paper demonstrates Togo needs large-scale cash transfer programs to eliminate poverty by 2030 and shows their affordability in part by re-allocating pro-rich fuel subsidies.
- Staffs encourage making school feeding and cash transfer programs an integral part of Togo’s poverty reduction strategy.
- Staffs note significant inequalities in service provision across regions and urge routine assessment of equity of service provision; Figure 3 (Salary Spending per Student, per Region, 2010–11) is cited as illustrative.

### Strengthening governance
- The SCAPE proposes continuing political and economic reforms for consolidated good governance across three priority areas: (i) political and institutional; (ii) administrative and local; and (iii) economic.
- Governance reforms since 2006 have generated good returns (positive growth, opening civic and economic life, reactivated donor relations including through the enhanced HIPC initiative).
- The Ex-Post Assessment of the IMF’s Longer Term Program Engagement (2006) stressed importance of improving economic governance and transparency and reducing extra-budgetary spending; it suggested focusing on:
  - strengthening fiscal management (including strengthened oversight and external controls),
  - enhancing autonomy of public enterprises (including privatization),
  - reforming the financial sector through bank restructuring, privatization and improved supervision,
  - addressing capacity constraints for budget preparation and expenditure management, tax and customs administration, banking supervision, and statistical agencies (national accounts and the debt department).
- Staffs welcome commitment to governance reforms but are concerned by:
  - repeated delays to implement critical reforms,
  - poor budget planning, and
  - persistence of capacity constraints.
- Consequences cited:
  - Togo could not finalize a program with the Fund since August 2011,
  - the World Bank has not disbursed budget support since August 2012,
  - limited access to funding and impeded donor roundtable meetings, and
  - negative effects on Togo’s international image for investment and business.
- Staffs urge authorities to improve budget planning, address key capacity constraints, and revert without further delay to the momentum of governance reforms present before the HIPC completion point.

### Promoting participative, balanced and sustainable development
- SCAPE aims to:
  - strengthen grassroots development for participation by community organizations,
  - develop regional and local potential to promote local development and avoid deterioration of inter- and intra-regional imbalances,
  - emphasize the environment in integrated development to protect local natural wealth and combat climate change.
- Staffs welcome attention to regional disparities but question creating regional development hubs; they cite World Development Report 2009: unequal growth results from economic agents’ choices, and government role should be to accommodate emerging high-productivity locations and ensure benefits of growth spread via social policies and infrastructure.
- Staffs suggest policies supportive of enhanced rural growth and internal labor migration to enhance productivity and access to wealth, noting urban returns on labor are typically much higher.
- Warning: without greater policy effort focused on non-coastal areas, achieving middle income status risks accompanying high poverty and growing inequality.

### Monitoring and evaluation
- Institutional arrangements for coordinating, monitoring, and evaluating development policies include:
  - National Council for Overseeing Development Policies (CNPPD—chaired by the Prime Minister),
  - Technical Secretariat of the PRSP,
  - Sector Committees (SCs),
  - Government/Donor Liaison Committee, and
  - regional and local participatory monitoring committees.
- The World Bank is financing a project to strengthen monitoring and evaluation capacity in Togo (PRCSET).
- The Strategic Measurement Matrix (SMM) comprises:
  - 31 high level outcome indicators (such as poverty) to be assessed by the end of the program, and
  - 64 intermediate indicators (such as growth rates) that are collected yearly.
- The technical secretariat prepares quarterly and bi-annual reports, updates annually the Program of Priority Actions, and starting in year two will prepare evaluative studies on selected topics.
- Staffs find the institutional framework elaborate and heavy; implementation and monitoring-evaluation are poorly integrated with existing decision-making processes and the primacy of SCAPE reforms is unclear.
- Data challenges: robust social data and physical information remain scarce; recent initiatives improved knowledge but the cost of data collection and consistency of data series over time will remain a challenge.

### Conclusions and overall recommendations
- The SCAPE is a comprehensive and ambitious medium-term development strategy addressing four critical challenges: (i) accelerate economic growth and employment creation; (ii) improve governance; (iii) deal with demographic challenges, high population growth in particular; and (iv) enhance urban development while improving land use and environmental protection.
- The SCAPE’s five pillars: (i) developing sectors with high growth potential; (ii) strengthening economic infrastructure; (iii) developing human capital, social protection and employment; (iv) strengthening governance; and (v) promoting participation and a balanced and sustainable development pattern.
- Staffs note SCAPE offers less in terms of prioritization; given capacity constraints and limited financing, a clearer perspective on the Government’s role, a more focused strategy, and closer alignment of implementation mechanisms with existing decision-making would have been advantageous.
- Staffs appreciate SCAPE as a consensus-building instrument but find that lacking clear priorities and actionable strategies will make it difficult to guide Togo’s development process; a disconnect exists between SCAPE and the Government’s priorities, budgeting process, and available financial means, partly due to a growth trajectory lower than the base scenario.
- Staffs suggest supplementing SCAPE analysis with assessments on the impact of policies on poverty, inequality (of service delivery) and (rural) employment to devise more inclusive policies.
- Staffs strongly encourage improving quality of learning and making school feeding and cash transfer programs integral to the poverty reduction strategy.
- SCAPE should be fitted into the long-term growth strategy under preparation, taking better account of capacity and financing constraints and differing requirements for productive, infrastructure, and social investments.
- Implementation of critical structural and governance reforms must be accelerated to realize SCAPE growth scenarios, including:
  - restructuring of the banking and microfinance sectors,
  - making the telecommunications sector more competitive,
  - stabilizing the electricity sector,
  - opening up mining to private investment, and
  - improving the business environment.
- Staffs urge greater attention to fiscal sustainability, planning and prioritizing expenditures, and improving execution management.

*Source: IMF staff assessment as presented in the provided content unit.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2014/_cr14225.pdf_