Economic situation Trade hub in the Gulf of Guinea
The well-developed deepwater port of Lomé, the capital, serves as a transshipment point for the movement of goods to the Sahel countries and North Africa. The country has also expanded its international airport and improved numerous highways.
Private investment needed
However, the high levels of spending on infrastructure development have led to financial constraints in Togo. In an agreement with the International Monetary Fund (IMF), the government made a commitment in 2017 to drastically reduce public spending. It is thus trying to improve the environment for private investment.
The World Bank's 2019 Doing Business Report (External link), which assesses the business climate in 190 countries, ranks Togo one of the world's top ten reformers. Compared to the previous year, it moved up 19 places. It has now reached position 137. The Report praises, in particular, the progress made on the following aspects: starting a business, getting electricity, and registering property. The volume of direct investment in Togo rose by 24 per cent in 2017. Many companies, including German firms, are interested in investing in Togo. However, potential investors are often deterred by inadequate infrastructure, political tensions, legal uncertainty and corruption.
Value chain development on the ground
Economic growth in Togo has been four to six per cent over the last few years. The country's only significant extractive resource is phosphate, of which it has the world's fourth largest reserves.
So far, the country has mainly been exporting unprocessed raw materials, which is making it vulnerable to price volatility in world markets. The government is working to foster local processing and is developing agricultural value chains with high employment and export potential. At present, most farmers are engaged in subsistence farming.