International Monetary Fund (IMF) Staff completes Review Mission to Togo
Economic growth is projected to slightly accelerate from 4.9 percent in 2018 to 5.3 percent in 2019
If current policies are sustained in the second half of 2019, Togo will comply with the WAEMU deficit criterion of 3 percent of GDP for the third year in a row
Togo’s economic recovery is continuing. GDP growth is projected at 5.3 percent in 2019. Inflation was 0.6 percent in July 2019. The fiscal consolidation was sustained through June 2019; revenue administration and public expenditure management reforms undertaken in recent years are progressing. The authorities are committed to address weaknesses in the financial sector; the government’s current policies are in line with the WAEMU policies, including adherence to the regional convergence criteria.
An International Monetary Fund (IMF) team, led by Mr. Ivohasina Fizara Razafimahefa, visited Lomé during August 28-September 10, 2019 to discuss with the national authorities the fifth review of the program supported by IMF’s Extended Credit Facility (ECF).
At the end of this visit, Mr. Razafimahefa issued the following statement:
“Good progress was made during the discussions, and they will continue in the coming weeks. Following the conclusion of ongoing discussions, the IMF Executive Board could consider the conclusion of the fifth ECF review in October 2019.
“After a sharp deceleration in 2017 due to socio-political tensions, economic activities regained momentum in 2018 and this recovery continued in the first half of 2019. Economic growth is projected to slightly accelerate from 4.9 percent in 2018 to 5.3 percent in 2019. The strong fiscal efforts initiated in 2017 continued through June 2019. Revenue collections were on target in June and overall expenditure was less than programmed. If current policies are sustained in the second half of 2019, Togo will comply with the WAEMU deficit criterion of 3 percent of GDP for the third year in a row. The budget framework for 2020 is targeting an overall fiscal deficit of slightly below 2 percent of GDP. The fiscal consolidation efforts have resulted in a reduction of public debt; persevering in such efforts will help reduce debt vulnerabilities.
“Structural fiscal reforms are progressing. Reforms in tax policy and revenue administration aim to bolster permanent revenue; the authorities are committed to implement measures based on recommendations from a recent tax administration diagnostic assessment. The revenue authority ( Office Togolais des Recettes) plans to strengthen the framework for voluntary compliance; dematerialization of customs procedures will be accelerated; online declarations and payments will be facilitated; and taxpayer services will be improved. On the spending side, key measures from the recently completed expenditure review will be implemented; necessary measures will be taken to fulfil the preconditions for a smooth switch to program-based budgeting and expand the coverage of the Treasury Single Account.
“Despite some delays, the mission welcomes the government’s commitment to pursue the privatization of the two publicly-owned banks. A successful completion of this privatization will safeguard financial stability and reduce risks to the State budget. The government intends to address the high level of non-performing loans, closely monitor key financial soundness indicators, and take necessary measures as needed.
“The mission welcomes Togo’s recent progress on the improvement of the business environment; continued progress will be essential to achieve the objectives of the National Development Plan and will help promote inclusive economic growth.
“The mission met with Prime Minister Komi Sélom Klassou and held discussions with Mr. Sani Yaya (Minister of Economy and Finance), Ms. Ayawovi Demba Tignokpa (Minister of Development Planning and Cooperation), Mr. Kossi Ténou (National Director of BCEAO for Togo), other senior government officials, senior staff of BCEAO and Banking Commission, as well as representatives of the private sector and development partners. The IMF mission wishes to express its gratitude to the authorities and interlocutors for the constructive discussions and warm hospitality during its visit to Togo.”
Distributed by APO Group on behalf of International Monetary Fund (IMF).