Economic Overview

Despite a challenging regional context and international circumstances, Togo demonstrates robust growth (averaging 6.1% between 2021 and 2023), propelled by strong domestic demand and sustained public and private investments. Economic growth reached an estimated 5.3% in 2024. On the supply side, strong agricultural performance and sustained activity in the services sector have supported growth, while industrial activity has shown signs of slowing, indicating the impact of a weak global environment and reduced demand from neighbouring countries. Aggregate demand is bolstered by strong private investment and improving consumer spending as inflation eases, but it slowed due to fiscal consolidation efforts, weak global demand, and regional uncertainties. Growth is projected to reach around 5.5% over the medium term, as per the IMF’s outlook.

Concerning public finances, the government has intensified efforts to boost revenues and reduce spending, particularly on goods, services, and public subsidies. However, high security spending, new investments in economic and social infrastructure, and a one-off recapitalization of the state-owned bank UTB kept the fiscal deficit elevated at 6.1% of GDP in 2024 (or 4.5% excluding the recapitalization of UTB). Fiscal consolidation efforts to reduce the deficit to 3% of GDP by 2025 will be challenging in the short term, driven mainly by slower capital spending and tax and customs reforms to increase revenue (World Bank). Public debt peaked at an estimated 69.7% of GDP in 2024 from 68% one year earlier because of the cost of bank recapitalization and is expected to decline steadily over the forecast horizon in line with fiscal consolidation. The average inflation rate decreased to 2.9% in 2024 (from 5.3% in 2023), according to data from the National Institute of Statistics and Studies. The regional inflation rate is expected to align with the WAEMU target by 2025, while regional reserves are projected to gradually increase, supported by the resumption of international bond issuances, recovering exports, and monetary policy easing in the Euro Area.

In 2023, the unemployment rate in the country was at 1.9% (World Bank, ILO estimate), but the majority of people are still employed in the informal sector. Households' purchasing power has been supported by moderating inflation since 2023. As a result, the extreme poverty rate (under USD 2.15 in 2017 PPP) was expected to slightly decrease to 26.2% in 2024, down from 27.2% in 2023 (World Bank), although significant disparities in economic opportunities and access to basic services between rural and urban areas have continued to hinder progress in reducing poverty, inequality, and fragility in Togo. The country’s GDP per capita (PPP) was estimated at USD 3,289 in 2024 by the IMF.

Foreign Trade

In Togo, foreign trade represents 61% of the GDP, according to the World Bank’s latest available data. Togo's main exports are phosphates (19.2% of total exports in 2023), petroleum oils (12.7%), articles for the conveyance or packaging of goods (6.1%), soya beans (5.6%), and beauty or make-up preparations (5.5%); whereas imports are led by petroleum oils (6.2%), motor cars (4.2%), medicaments (3.8%), polymers of ethylene (3.7%), and palm oil (3.6% - data Comtrade).

Togo’s main export destinations in 2023 were India (22.5%), Burkina Faso (9.2%), Benin (8.4%), Mali (7.8%), Ivory Coast (6.8%), France (6.5%), and Ghana (5.4%); while imports came chiefly from China (19.0%), France (9.0%), India (7.9%), Ghana (4.8%), Türkiye (4.5%), Nigeria (4.2% - data Comtrade). Togo is a member of the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (WAEMU), benefiting from regional trade integration and a common external tariff. It is also part of the African Continental Free Trade Area (AfCFTA), which promotes intra-African trade. Internationally, Togo enjoys preferential access to the European Union (EU) under the Everything But Arms (EBA) initiative and the United States (US) through the African Growth and Opportunity Act (AGOA). The country is also a signatory to the World Trade Organization (WTO) agreements, supporting trade liberalisation and investment.

Togo’s trade balance is structurally in deficit, a trend that is expected to continue due to the high oil bill and purchases of capital goods. In 2023, total exports stood at USD 1.43 billion against USD 3.2 billion in imports (+6.3% and +5.3% y-o-y, respectively). As per services, exports totalled USD 664 million, slightly above imports (USD 661 million – data WTO). In the same year, the World Bank estimated the country’s trade deficit at 13.6% of its GDP, from 14.3% one year earlier. In the first half of 2024, Togo's export earnings totalled XOF 422 billion, a 0.9% decline from XOF 426 billion in H1 2023, according to INSEED. Imports reached XOF 921 billion, resulting in a trade deficit of nearly XOF 499 billion, slightly widening from XOF 495.4 billion in the same period last year.