IMF Executive Board Completes the First Review under the Extended Credit Facility (ECF) Arrangement for Togo
IMF News, December 20, 2024
Source details
- Canonical URL
- IMF Executive Board Completes the First Review under the Extended Credit Facility (ECF) Arrangement for Togo
Other formats
Bibliographic details
- Published: December 20, 2024
Executive Board decision and financing
- The Executive Board completed the first review under the ECF-arrangement for Togo and approved the immediate disbursement of SDR 44.0 million (about US$ 58.7 million) to be used for budget support.
- The 42-month ECF-arrangement provides overall financing of SDR 293.60 million (about US$ 390 million).
- The IMF approved the ECF-arrangement on March 1st, 2024 (Press Release No. 24/64).
Program objectives and context
- Program aims:
- (i) Make growth more inclusive while strengthening debt sustainability.
- (ii) Implement structural reforms to support growth and limit financial sector and associated fiscal risks.
- Context:
- The arrangement helps address legacies of shocks since 2020, notably the COVID-pandemic and the increase in global food and fuel prices.
- Managing those shocks contributed to increases in fiscal deficits and debt.
Macroeconomic performance and medium-term outlook
- Growth:
- Economic growth reached an estimated 5.6 percent in 2023.
- Projected at 5.3 percent in 2024-25 and around 5.5 percent per year thereafter according to IMF staff projections, barring major adverse shocks.
- Inflation:
- Headline inflation eased to 3.3 percent in October 2024.
- Core inflation (which excludes the prices of food and transport) eased to 2.2 percent (annual averages).
- Outlook characterization:
- The medium-term outlook is broadly favorable with continued robust growth but subject to elevated risks.
Key risks and fiscal trade-offs
- Security risk:
- Terrorist attacks in the country’s North continue unabated and appear to be intensifying, putting pressure on spending.
- Fiscal trade-offs:
- Authorities face challenging trade-offs between fiscal consolidation to lower the debt burden and the need to maintain robust growth in the context of limited fiscal space.
Program implementation and structural progress
- Quantitative performance:
- Authorities have met all end-June quantitative performance criteria.
- Prospects for meeting the quantitative targets for the rest of the year are favorable.
- Structural benchmarks:
- Authorities met two out of four due structural benchmarks.
- Prospects exist to deliver at a later stage on limited elements that led to two missed benchmarks.
- Prospects for meeting the two end-December benchmarks are good.
- Financial sector reform:
- Authorities have made good progress on the reform of the remaining state-owned bank.
Policy recommendations and priorities (from Acting Chair statement)
- Fiscal policy:
- Aim to address debt vulnerabilities in a context of regional vulnerabilities while supporting growth and enhancing inclusion.
- Implement the agreed fiscal anchor by limiting fiscal deficits to 3 percent of GDP from 2025 onwards.
- Continue to raise tax revenue while making taxation more efficient.
- Implement structural reforms to enhance the efficiency of spending and make the social safety net more effective and efficient.
- Governance and transparency:
- Continue efforts to strengthen governance.
- The authorities’ request for an IMF Governance Diagnostic is welcome.
- Strengthen beneficial ownership declarations for companies benefiting from public procurement contracts.
- Financial sector and AML/CFT:
- Continue the reform of the remaining public bank by bringing the bank’s capital in line with regulatory requirements and reforming its operations to ensure stability and profitability.
- Efforts to strengthen the AML/CFT framework will be important.
Selected economic and financial indicators (2020–29) — key figures (estimates and projections)
- Real GDP (percentage change): 2020: 2.0; 2021: 6.0; 2022: 5.8; 2023: 5.6; 2024: 5.3; 2025: 5.5.
- Real GDP per capita (percentage change): 2020: -0.4; 2021: 3.5; 2022: 3.3; 2023: 3.1; 2024: 2.8; 2025: 3.0.
- GDP deflator (percentage change): 2020: 1.8; 2021: 2.5; 2022: 3.7; 2023: 2.9; 2024: 2.2.
- Consumer price index (average): 2020: 4.5; 2021: 7.6; 2022: 2.3.
- GDP (CFAF billions): 2020: 4253; 2021: 4621; 2022: 5069; 2023: 5507; 2024: 5927; 2025: 6366; 2026: 6850; 2027: 7371; 2028: 7932; 2029: 8536.
- Exchange rate CFAF/US$ (annual average level): 2020: 575; 2021: 554; 2022: 622; 2023: 606; 2024: ….
- Real effective exchange rate (appreciation = –): 2020: -2.0; 2021: -1.4; 2022: -5.4.
- Terms of trade (deterioration = –): 2020: 6.6; 2021: 23.3; 2022: 3.4; 2023: 0.9; 2024: -1.7; 2025: -0.8; 2026: 1.4; 2027: 1.3; 2028: 0.4.
- Monetary survey (percentage change of beginning-of-period broad money):
- Net foreign assets: 2020: 14.1; 2021: -0.6; 2022: 6.2; 2023: 4.9; 2024: -0.1.
- Net credit to government: 2020: -1.6; 2021: -0.3; 2022: 8.0; 2023: 0.2; 2024: -2.9; 2025: 1.0; 2026: 1.2.
- Credit to nongovernment sector: 2020: 10.7; 2021: 1.5; 2022: 7.3; 2023: 6.5; 2024: 4.4; 2025: 4.6; 2026: 4.8.
- Broad money (M2): 2020: 11.4; 2021: 12.3; 2022: 14.9; 2023: 8.5; 2024: 8.8; 2025: 7.4.
- Velocity (GDP/end-of-period M2): 2020: 2.1.
- Investment and savings:
- Gross domestic investment: 2020: 21.4; 2021: 23.4; 2022: 25.9; 2023: 28.0; 2024: 25.7; 2025: 24.2; 2026: 25.0; 2027: 26.7; 2028: 27.2.
- Government investment: 2020: 9.3; 2021: 8.2; 2022: 9.7; 2023: 11.5; 2024: 9.0; 2025: 7.1; 2026: 7.7; 2027: 8.4; 2028: 8.9; 2029: 9.4.
- Nongovernment investment: 2020: 12.1; 2021: 15.2; 2022: 16.2; 2023: 16.5; 2024: 16.7; 2025: 17.1; 2026: 17.3; 2027: 17.5; 2028: 17.8.
- Gross national savings: 2020: 21.1; 2021: 21.2; 2022: 22.5; 2023: 25.1; 2024: 22.7; 2025: 22.4; 2026: 23.7; 2027: 24.7; 2028: 25.2.
- Fiscal and public debt indicators:
- Total revenue and grants: 2020: 16.6; 2021: 19.8; 2022: 19.1; 2023: 19.5; 2024: 19.9.
- Revenue: 2020: 15.3; 2021: 15.1; 2022: 16.8; 2023: 18.1; 2024: 18.5.
- Tax revenue: 2020: 12.5; 2021: 14.0; 2022: 13.9; 2023: 14.8; 2024: 15.7; 2025: 17.2.
- Expenditure and net lending (excl. banking sector operation): 2020: 21.8; 2021: 26.0; 2022: 26.6; 2023: 21.6; 2024: 22.0; 2025: 22.6; 2026: 22.9.
- Overall primary balance (commitment basis, incl. grants): 2020: -4.7; 2021: -2.5; 2022: -5.9; 2023: -3.9; 2024: -3.7; 2025: -0.5; 2026: -1.0; 2027: -1.1.
- Overall balance (commitment basis, incl. grants, excl. banking sector operations): 2020: -7.0; 2021: -8.3; 2022: -6.7; 2023: -4.9; 2024: -3.0.
- Overall balance (commitment basis, incl. grants): 2020: -6.4.
- Overall primary balance (cash basis, incl. grants): 2020: -3.4.
- Overall balance (cash basis, incl. grants, excl. banking sector operations): 2020: -7.1; 2021: -5.6.
- Overall balance (cash basis, incl. grants): 2020: -.
- External sector:
- Current account balance: 2020: -2.2; 2021: -3.5; 2022: -2.6.
- Exports (goods and services): 2020: 25.5; 2021: 25.6; 2022: 26.2; 2023: 26.1.
- Imports (goods and services): 2020: -32.3; 2021: -34.0; 2022: -38.8; 2023: -36.2; 2024: -35.4; 2025: -34.4; 2026: -33.9; 2027: -33.7; 2028: -33.5.
- External public debt1: 2020: 27.6; 2021: 27.3; 2022: 29.5; 2023: 29.0; 2024: 29.9; 2025: 30.6; 2026: 30.8; 2027: 30.4.
- External public debt service (percent of exports)1: 2020: 6.9; 2021: 5.2; 2022: 8.3; 2023: 15.5; 2024: 9.2; 2025: 7.2.
- Domestic public debt2: 2020: 34.6; 2021: 37.6; 2022: 41.2; 2023: 42.1; 2024: 40.2; 2025: 39.1; 2026: 36.6; 2027: 34.3; 2028: 32.3; 2029: 31.4.
- Total public debt3: 2020: 62.2; 2021: 64.9; 2022: 67.4; 2023: 68.0; 2024: 69.7; 2025: 68.2; 2026: 66.4; 2027: 64.8; 2028: 63.1; 2029: 61.8.
- Total public debt (excluding SOEs)4: 2020: 60.1; 2021: 63.0; 2022: 65.8; 2023: 66.6; 2024: 68.6; 2025: 67.2; 2026: 65.6; 2027: 64.1; 2028: 62.5; 2029: 61.3.
- Present value of total public debt3: 2020: 60.6; 2021: 60.7; 2022: 57.7; 2023: 54.5; 2024: 51.5; 2025: 48.8; 2026: 47.1.
Sources: Togolese authorities and IMF staff estimates and projections. Press Release No. 24/494.
