IMF Executive Board Concludes 2016 Article IV Consultation with Togo
IMF News, May 17, 2017
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- Published: May 17, 2017
Economic performance (recent years)
- Real GDP growth: "Growth was 5.2 percent in 2014-16" (source narrative). Table: Real GDP: 6.1 (2013), 5.4 (2014), 5.3 (2015), 5.0 (2016), 5.6 (2017 proj).
- Real GDP per capita (table): 3.3 (2013), 2.6 (2014), 2.5 (2015), 2.2 (2016), 2.8 (2017 proj).
- Inflation: "Inflation was well contained, explained by the lower food, energy, and transport prices." Table — Consumer price index (average): 1.8 (2013), 0.2 (2014), 0.9 (2015), 1.5 (2016).
- Poverty: "Togo’s poverty rate declined from 61.7 percent in 2006 to 55.1 percent in 2015, though it remains geographically concentrated."
Public investment, debt, and fiscal developments
- Public investment effects: "The fast pace of public investment has contributed to a pronounced increase in public debt and the current account deficit."
- Public debt (including prefinancing debt, domestic arrears, and public enterprise debt): increased "from 48.6 percent of GDP in 2011 to 80.8 percent in 2016" (narrative). Table — Total public debt4: 56.4 (2013), 65.2 (2014), 75.6 (2015), 80.8 (2016), 81.3 (2017 proj), 78.1 (2018 proj), 73.0 (2019 proj), 67.8 (2020 proj), 62.7 (2021 proj).
- Domestic Debt3 (table): 42.1 (2013), 48.1 (2014), 54.5 (2015), 61.0 (2016), 58.4 (2017 proj), 53.3 (2018 proj), 45.6 (2019 proj), 40.0 (2020 proj), 34.3 (2021 proj).
- External public debt2 (table): 14.3 (2013), 21.1 (2014), 22.9 (2015), 24.8 (2016), 28.4 (2017 proj).
- External public debt service (percent of exports)2 (table): 2.4 (2013), 2.9 (2014), 4.0 (2015), 3.4 (2016), 3.6 (2017 proj).
- Fiscal balances (table): Total revenue and grants: 21.5 (2013), 20.5 (2014), 21.9 (2015), 21.7 (2016), 24.7 (2017 proj), 25.2 (2018 proj), 25.9 (2019 proj), 26.0 (2020 proj). Revenue: 18.1 (2013), 18.2 (2014), 19.6 (2015), 21.0 (2016), 21.8 (2017 proj).
- Total expenditure and net lending (table): 26.6 (2013), 27.3 (2014), 30.8 (2015), 31.4 (2016), 33.5 (2017 proj), 27.9 (2018 proj), 25.4 (2019 proj), 25.5 (2020 proj).
- Domestic primary expenditure (table): 20.8 (2013), 21.3 (2014), 22.8 (2015), 23.4 (2016), 23.7 (2017 proj), 17.8 (2018 proj), 16.7 (2019 proj), 16.8 (2020 proj), 16.9 (2021 proj). Excluding bank recapitalization: 19.7 (year alignment in table).
- Domestic primary balance1 (table): -2.7 (2013), -3.1 (2014), -3.2 (2015), -4.5 (2016), -3.5 (2017 proj), 3.2 (2018 proj), 5.1 (2019 proj).
- Overall primary balance (cash basis) (table): -4.7 (2013), -6.4 (2014), -5.4 (2015), -7.2 (2016), -6.7 (2017 proj).
- Overall balance (cash basis) (table): -7.8 (2013), -9.6 (2014), -9.7 (2015), -3.6 (2016), -0.7 (2017 proj), -0.4 (2018 proj), -0.5 (2019 proj), -5.7 (2021 proj).
External sector and current account
- Current account balance (table): -13.2 (2013), -9.9 (2014), -11.1 (2015), -9.8 (2016), -9.0 (2017 proj), -8.3 (2018 proj), -7.3 (2019 proj), -6.2 (2020 proj), -5.2 (2021 proj).
- Exports (goods and services) (table): 46.5 (2013), 39.4 (2014), 36.0 (2015), 35.1 (2016), 36.4 (2017 proj), 36.7 (2018 proj), 37.4 (2019 proj), 37.8 (2020 proj), 39.0 (2021 proj).
- Imports (goods and services) (table): -66.3 (2013), -57.3 (2014), -58.0 (2015), -55.1 (2016), -55.2 (2017 proj), -54.6 (2018 proj), -54.4 (2019 proj), -53.7 (2020 proj), -53.8 (2021 proj).
- Narrative: "The current account deficit remained high, reaching 9.8 percent of GDP in 2016, largely due to investment-related imports."
Outlook and projections
- Growth outlook (narrative): "Growth is expected to pick up from 5 percent in 2016 to 5.6 by 2021" (table shows 5.6 (2017 proj) and later projections through 2021).
- Public debt outlook (narrative): "With the improvement in the fiscal stance, public debt is expected to be reduced from a projected peak of 81.3 percent of GDP in 2017 to 73 percent by 2019." Table: Total public debt4: 81.3 (2017 proj), 78.1 (2018 proj), 73.0 (2019 proj).
- Key projected drivers: improved transportation network, productivity gains in the agricultural sector, and increasing role of the private sector as public investment returns to sustainable levels.
- Downside risks (narrative): "capacity constraints in implementation of structural reforms, resistance to reforms from interest groups, and further slowdown in Togo’s main regional trading partners."
Executive Board assessment and policy priorities
- Summary by Deputy Managing Director Mr. Tao Zhang (Acting Chair):
- "Togo’s economy has shown solid performance in recent years, with sustained growth and low inflation."
- Public investment durable effects: "growth performance has been underpinned by high levels of public investment to address significant infrastructure gaps."
- Risks from investment strategy: "this capital spending has also increased public debt and debt service pressures, crowding out needed social expenditures."
- Financial sector issues: "lingering deficiencies in the financial sector have remained unresolved."
- New ECF arrangement objectives (narrative): support authorities’ efforts towards fiscal consolidation while maintaining space for pro-poor spending.
- Specific policy measures highlighted:
- Strengthen public financial and debt management.
- Bolster revenue administration.
- Consolidate "the two under-capitalized public banks" into one healthy institution.
- Strengthen "regulation and supervision standards in the microfinance sector."
- Final Board view: "The medium-term economic outlook is favorable... However, further progress will hinge on the authorities’ successful implementation of their ambitious macroeconomic program, as well as pursuing broader structural reforms to improve public financial management and address social needs."
IMF Communications Department — Press Release No. 17/179 (May 17, 2017); Executive Board conclusions on the 2016 Article IV consultation with Togo.