On December 10, 2018, the Executive Board of the International Monetary
Fund (IMF) completed the third review of Togo’s performance under the
program supported by an
Extended Credit Facility
(ECF). Program performance has been satisfactory. All quantitative
performance criteria and three out of five structural benchmarks were met.
The completion of the review enables the disbursement of SDR25.17 million
(about US$34.9 million), bringing total disbursements since the beginning
of the arrangement to SDR100.68 million (about US$139.5 million).
Togo’s three-year arrangement was approved on May 5, 2017 (see
Press Release No. 17/151) for SDR176.16 million (120 percent of quota or about US$241.5 million at
the time of approval of the arrangement) to support the country’s economic
and financial reforms. The program aims to reduce the overall fiscal
deficit substantially to ensure long-term debt and external sustainability;
refocus policies on inclusive growth through targeted social spending and
sustainably-financed infrastructure spending; and resolve the financial
weaknesses in the two public banks.
Following the Executive Board’s discussion on Togo, Mr. Mitsuhiro Furusawa,
Deputy Managing Director and Acting Chair, issued the following statement:
“Togo’s performance under the ECF-supported program has been satisfactory
despite a challenging environment. The economy shows signs of incipient
stabilization, growth is projected to accelerate, and inflation remains
within the WAEMU criteria. Meanwhile, the structural reform agenda is
advancing. With risks abating but still on the downside, it is important
that the authorities remain committed to their macroeconomic adjustment and
reform agenda.
“The authorities are determined to reduce public debt to sustainable levels
and advance fiscal reforms. The fiscal framework is expected to achieve the
debt reduction envisaged initially under the program, and Togo is projected
to comply with the WAEMU convergence criteria by end-2019. The authorities
are planning to pursue a debt reprofiling operation with appropriate
safeguards, aimed at reducing the present value of total public debt.
“Ongoing fiscal reforms aim to create space for much-needed social and
infrastructure spending. The authorities are making efforts to improve
revenue mobilization in a permanent way, shift the composition of spending
in favor of growth-supporting public investment, and enhance the efficiency
of overall spending. Further progress is needed to finalize the
cost-benefit analysis of public investment projects and strengthen arrears
management.
“The authorities have revisited their financial sector strategy and have
re-launched the privatization of the two remaining public banks.
Implementation of the agreed safeguard measures will be important to ensure
that the privatization is in line with international best practices.
“Efforts are underway to implement measures under the National Development
Plan and the Compact with Africa, with a view to promoting Togo as a major
logistical hub, a dynamic financial center, and a strong manufacturing
base. To this end, priorities include fighting corruption, strengthening
governance, and improving the business climate more broadly.”
