Togo: Fifth Review under the Extended Credit Facility Arrangement-Press Release; Staff Report and Statement by the Executive Director for Togo
IMF Staff Country Reports, October 31, 2019
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- Togo: Fifth Review under the Extended Credit Facility Arrangement-Press Release; Staff Report and Statement by the Executive Director for Togo
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Bibliographic details
- Published: October 31, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513518640.002
Key findings
- The economic recovery seems to be taking hold.
- Inflation stood at 0.6 percent at end-July 2019.
- Given high debt levels, revenue mobilization efforts and spending prioritization should continue.
- Persistent underperformance on social spending needs to be addressed to enhance economic inclusiveness and to reduce poverty.
- Weaknesses in the two public banks should be addressed transparently.
- A successful privatization of these two banks would safeguard financial stability and minimize costs to the State budget.
- Broader financial sector developments should be monitored, and corrective actions should be taken as needed, including in terms of the high nonperforming loans.
- Structural reforms are progressing on tax policy, revenue administration, and public expenditure management.
- Significant progress has been made in the improvement of the business environment, which is expected to boost domestic and foreign private investment.
Macroeconomic indicators and outlook
- Inflation: 0.6 percent (end-July 2019).
- Economic recovery: described as "seems to be taking hold" (no additional quantified growth figures provided in source text).
Fiscal policy and public debt
- Context: high debt levels (no numerical debt ratio provided in source text).
- Recommended fiscal focus:
- Continue revenue mobilization efforts.
- Prioritize spending to protect macroeconomic stability and policy space.
- Address underperformance in social spending to improve inclusiveness and poverty reduction.
Financial sector and state-owned banks
- Immediate issues:
- Weaknesses identified in the two public banks.
- High nonperforming loans in the banking system warrant monitoring and corrective actions.
- Recommended actions:
- Transparent treatment of the two public banks’ weaknesses.
- Pursue successful privatization of the two public banks to safeguard financial stability and minimize fiscal costs.
- Monitor broader financial sector developments and take corrective actions as needed.
Structural reforms and business environment
- Progress noted on:
- Tax policy reforms.
- Revenue administration reforms.
- Public expenditure management reforms.
- Business environment:
- Significant progress in improvement is expected to boost domestic and foreign private investment.
Policy recommendations (summarized)
- Continue revenue mobilization and prioritize spending given high debt levels.
- Address persistent underperformance in social spending to enhance inclusiveness and reduce poverty.
- Transparently resolve weaknesses in the two public banks; pursue privatization to protect financial stability and limit State budget costs.
- Monitor the financial sector closely and act to reduce high nonperforming loans.
- Advance structural reforms in tax policy, revenue administration, and public expenditure management to support private investment and longer-term growth.
International Monetary Fund. Togo: Fifth Review under the Extended Credit Facility Arrangement-Press Release; Staff Report and Statement by the Executive Director for Togo (October 31, 2019).
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