{
  "title": "IMF Executive Board Approves a US$390 Million 42-month Arrangement Under the Extended Credit Facility for Togo",
  "publication": "IMF News, March 1, 2024",
  "sourceUrl": "https://www.imf.org/en/news/articles/2024/03/01/pr2464-togo-imf-exec-board-approves-us390m-42m-arr-ecf",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) approved a 42-month arrangement under the Extended Credit Facility (ECF) for Togo. The arrangement will provide financing of SDR 293.60 million (about US$390 million), with an immediate disbursement of SDR 51.38 million (about US$68.",
  "publishDate": "2024-03-01",
  "sections": [
    {
      "heading": "Arrangement and financing",
      "content": "- 42-month arrangement under the Extended Credit Facility (ECF).\n- Financing of SDR 293.60 million (about US$390 million).\n- Immediate disbursement of SDR 51.38 million (about US$68.3 million).\n- Arrangement size equals 200 percent of quota."
    },
    {
      "heading": "Context and challenges",
      "content": "- Recent shocks: COVID pandemic, terrorist attacks, spikes in global food and fuel prices.\n- Ongoing headwinds: policy tightening in advanced economies, challenging security situation at the northern border, persistent food insecurity compounded by climate change.\n- Fiscal and debt dynamics: fiscal deficits and debt have increased, reversing debt reduction achieved during the 2017–20 ECF-arrangement; erosion of fiscal space and buffers to absorb shocks; contribution to regional vulnerabilities in the West African Economic and Monetary Union (WAEMU).\n- Financial sector risks: two undercapitalized banks (one state-owned, the other recently privatized) pose risks to financial sector stability and associated fiscal risks."
    },
    {
      "heading": "Program objectives and key policy pillars",
      "content": "- Primary aims:\n  - Help maintain macroeconomic stability.\n  - Accelerate poverty reduction.\n  - Catalyze further external financing, benefitting Togo and contributing to macroeconomic and external stability in WAEMU.\n- Key policy pillars:\n  - Make growth more inclusive while strengthening debt sustainability.\n  - Conduct structural reforms to support growth and limit fiscal and financial sector risks.\n  - Strengthen social spending and the social safety net.\n  - Large fiscal consolidation underpinned by ambitious fiscal revenue mobilization.\n  - Banking sector reform, including recapitalization of the remaining state-owned bank."
    },
    {
      "heading": "Policy recommendations and program measures",
      "content": "- Social policy and inclusion:\n  - Strengthen social spending and social safety nets.\n  - Implement an investment program to improve living conditions in the Savanes region and neighboring regions to complement military responses with civilian responses.\n  - Substitute generalized fuel subsidies with more targeted and cost-effective measures to protect the vulnerable, including through cash transfers.\n- Fiscal policy and debt sustainability:\n  - Continue growth-friendly fiscal consolidation to create space for development spending while strengthening debt sustainability.\n  - Raise tax revenue by an ambitious 0.5 percent of GDP every year.\n  - Broaden the tax base by streamlining tax expenditures.\n- Structural and financial sector reforms:\n  - Enhance the business environment, including strengthening governance, anti-corruption, and AML/CFT frameworks.\n  - Reform the remaining state-owned bank; provision of budget resources for recapitalization to zero regulatory capital is a first step.\n  - Strengthen public financial management."
    },
    {
      "heading": "Medium-term fiscal framework and anchors",
      "content": "- Dual fiscal anchor:\n  - First element: reduce the overall risk of debt distress from high to moderate (PV of public debt below 55 percent of GDP) by end-2026.\n  - Second element: lower the fiscal deficit to 3 percent of GDP by 2025 to avoid overtaxing the regional market’s ability to provide financing, in line with the (currently suspended) regional convergence framework.\n- Commitment to raising revenue by an ambitious 0.5 percent of GDP each year to create space for priority spending."
    },
    {
      "heading": "Expected role of the program",
      "content": "- Provide and catalyze concessional financing for budget purposes to ease trade-offs between enhancing inclusion through higher social spending and strengthening debt sustainability.\n- Help maintain macroeconomic and external stability in the WAEMU."
    },
    {
      "heading": "Togo: Selected Economic Indicators (Estimates and Projections)",
      "content": "- National Income and Prices (percentage change)\n  - Real GDP: 2022 — 5.8; 2023 — 5.4; 2024 — 5.3; 2025 — (no value for 2025 in source table header—values presented through 2024 in table).\n  - Real GDP per capita: 2022 — 3.3; 2023 — 2.9; 2024 — 2.8.\n  - Consumer price index (average): 2022 — 7.6; 2023 — 5.1; 2024 — 2.7; 2025 — 2.0.\n- Money and Credit\n  - Credit to nongovernment sector: 2022 — 10.7; 2023 — 2.6; 2024 — 9.2; 2025 — 6.8.\n  - Broad money (M2): 2022 — 14.9; 2023 — 8.2; 2024 — 8.8; 2025 — 8.6.\n- Central Government Finance (percent of GDP)\n  - Revenue: 2022 — 15.1; 2023 — 15.5; 2024 — 16.3; 2025 — 16.9.\n  - Tax revenue: 2022 — 13.9; 2023 — 14.4; 2024 — 15.4.\n  - Total expenditure and net lending: 2022 — 26.0; 2023 — 24.9; 2024 — 23.3; 2025 — 21.4.\n  - Overall balance (cash basis, incl. grants): 2022 — -8.3; 2023 — -6.6; 2024 — -6.4; 2025 — -3.0.\n  - Basic primary fiscal balance (excl. banking sector operations): 2022 — -4.5; 2023 — -2.5; 2024 — -0.5; 2025 — 1.2.\n- External Sector\n  - Current account balance: 2022 — -4.2; 2023 — -3.3; 2024 — -3.6; 2025 — -3.5.\n  - Terms of trade (percent change; deterioration = –): 2022 — 9.7; 2023 — 1.6; 2024 — -2.2; 2025 — -1.5.\n- Public Debt\n  - Total public debt: 2022 — 66.5; 2023 — 67.4; 2024 — 68.8; 2025 — 66.9.\n  - External public debt: 2022 — 26.2; 2023 — 25.6; 2024 — 26.9; 2025 — 27.1.\n  - Domestic public debt: 2022 — 40.3; 2023 — 41.8; 2024 — 41.9; 2025 — 39.8.\n\nIMF press release, March 1, 2024 — Executive Board approval of a 42-month ECF arrangement for Togo (SDR 293.60 million; immediate SDR 51.38 million).\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- PRESS CENTER\n- Extended Credit Facility\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/03/01/pr2464-togo-imf-exec-board-approves-us390m-42m-arr-ecf"
    }
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    "Published: March 1, 2024",
    "42-month arrangement under the Extended Credit Facility (ECF).",
    "Financing of SDR 293.60 million (about US$390 million).",
    "Immediate disbursement of SDR 51.38 million (about US$68.3 million).",
    "Arrangement size equals 200 percent of quota.",
    "Recent shocks: COVID pandemic, terrorist attacks, spikes in global food and fuel prices.",
    "Ongoing headwinds: policy tightening in advanced economies, challenging security situation at the northern border, persistent food insecurity compounded by climate change.",
    "Fiscal and debt dynamics: fiscal deficits and debt have increased, reversing debt reduction achieved during the 2017–20 ECF-arrangement; erosion of fiscal space and buffers to absorb shocks; contribution to regional vulnerabilities in the West African Economic and Monetary Union (WAEMU).",
    "Financial sector risks: two undercapitalized banks (one state-owned, the other recently privatized) pose risks to financial sector stability and associated fiscal risks.",
    "Primary aims:",
    "Key policy pillars:",
    "Social policy and inclusion:",
    "Fiscal policy and debt sustainability:",
    "Structural and financial sector reforms:",
    "Dual fiscal anchor:",
    "Commitment to raising revenue by an ambitious 0.5 percent of GDP each year to create space for priority spending.",
    "Provide and catalyze concessional financing for budget purposes to ease trade-offs between enhancing inclusion through higher social spending and strengthening debt sustainability.",
    "Help maintain macroeconomic and external stability in the WAEMU.",
    "National Income and Prices (percentage change)",
    "Money and Credit",
    "Central Government Finance (percent of GDP)",
    "External Sector",
    "Public Debt",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Extended Credit Facility](https://www.imf.org/en/About/Factsheets/Sheets/2023/Extended-Credit-Facility-ECF)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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