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Country Commercial Guides for FY 2000: Togo Report prepared by U.S. Embassy Lilongwe, released July 1999    Note*

I. Executive Summary

This Country Commercial Guide (CCG) presents a comprehensive look at Togo's commercial environment, using economic, political and market analysis. The CCGs were established by recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi-agency task force, to consolidate various reporting documents prepared for the U.S. business community. County Commercial Guides are prepared annually at U.S. Embassies through the combined efforts of several U.S. Government agencies.

Togo is a small country on the coast of West Africa located between Ghana and Benin. The majority of the population depends on subsistence agriculture. Coffee, cotton, and cocoa are the major export crops; phosphate exports are the largest source of foreign exchange. The capital, Lomé, was once the bustling hub of an economy buoyed by tourism, banking, and transportation services for its land-locked and coastal neighbors. This position has eroded in recent years because of Togo's own political and economic difficulties as well as competition from its liberalizing neighbors.

Beginning in late 1990, the economy suffered severely as an uneasy democratization process brought unsettled political conditions, including sporadic civil disorder and a nine-month general strike in 1992-93. Togo enjoyed astronomical growth rates in 1994 and 1995 as the country pulled back from overt unrest to an environment permitting the ordinary course of business, and as the government recommitted itself to structural adjustment.

The period leading to presidential elections in June 1998 was seen as an important opportunity for Togo to demonstrate that its evolving political system could peacefully accommodate diverse views and aspirations, calming lingering concerns about the political stability underpinning Togo's commercial environment. While there was improvement in the pre-electoral conduct of political discourse over earlier elections in this decade, the June poll was marred by apparent manipulations of ballot counts; some civil disturbances ensued. These were not as dramatically violent as in the early 1990s, but the experience calls into question the return of a climate of confidence to support renewed investment and economic growth. Prompted by the controversies surrounding the 1998 presidential election and the March 1999 legislative election (boycotted by the opposition), Togo's political protagonists met for two weeks of national reconciliation talks in July 1999 to hash out common principles for transition to a more democratic government. An accord signed on July 29 could be followed by a resumption of international development cooperation, especially from the European Union.

Togo relaunched its structural adjustment efforts with support from International Monetary Fund and World Bank programs in late 1994, emphasizing privatization, increased revenue generation, and transparent reorientation of government spending toward real investment and social sectors such as health and education. While initial progress was made, Togo has sometimes struggled to meet international financial institution conditions, missing, for example, the middle of three disbursements in a three-year facility with the IMF. While the government got back on track for the third year, continued lack of spending discipline has delayed Togo's ability to meet requirements for a follow-on IMF program and has strained relations with the World Bank. The privatization program has largely stalled, although the government is working with the World Bank on ways to reinvigorate the process.

Having long relied on electricity imports, Togo shared in the region's crippling power shortages in early 1998. By mid-year, it had installed sufficient capacity to provide about half of its power needs independently, and benefitted from increased output from Cote d'Ivoire. However, the impact of the energy crisis and political unrest sharply slowed growth for 1998, when real GDP fell by one percent. The economy is expected to show only modest growth in 1999 (three percent growth in real GDP).

Near term prospects are for modest economic growth and restrained inflation, but these projections depend heavily on progress in both economic structural adjustment and political liberalization. Togo's limited domestic market is of little interest to the foreign investor, but the country's traditional role as a transshipment point to neighboring countries once made Togo an attractive base for sales aimed at the West African region. Expatriate living conditions are comfortable, although the political instability of the last several years has been accompanied by a rise in the crime rate. Best trade prospects for U.S. business will include donor-financed development projects, including multilateral financing from the World Bank, the West African Development Bank, and the African Development Bank. Should Togo's privatization programs again pick up steam, they may offer opportunities in areas from agricultural processing to telecommunications. New investment in energy production is a high priority for Togo.

Country Commercial Guides are available for U.S. exporters from the National Trade Data Bank's CD-ROM or via the Internet. Please contact STAT-USA at 1-800-STAT-USA for more information. Country commercial guides can be accessed via the World Wide Web at http://www.stat-usa.gov, http://1997-2001.state.gov, and http://www.mac.doc.gov. They can also be ordered in hard copy or on diskette from the National Technical Information Service (NTIS) at 1-800-553-NTIS. U.S. exporters seeking general export information/assistance and country-specific information should contact the U.S. Department of Commerce, Trade Information Center by phone at 1-800-USA-TRADE or by fax at (202) 482-4473.