Foreign Direct Investment

According to UNCTAD's World Investment Report 2023, FDI flows to Togo were negative by USD 227 million in 2022, marking the third year in a row with negative inflows. At the end of the same period, the total stock of FDI was estimated at USD 1.33 billion, around 16.3% of the country’s GDP. In the second half of 2022, Togo attracted foreign investments (mainly Indian, Singaporean, and Chinese) worth around XOF 150 billion, mainly in the sectors of textiles, wood, construction, agri-food, mechanics, and services (Togo First). The swiftly evolving Adetikiopé Industrial Platform (PIA) has played a pivotal role in drawing substantial fresh investments in light industry, capitalizing on Togo's abundant natural resources and skilled workforce. In 2022, it secured USD 25 million in new investments. In 2023, Togo mobilized a total of XOF 27.5 billion in private investments, according to figures shared by the Ministry of Investment Promotion, of which about 80% comprised FDI, amounting to a total of XOF 21.9 billion. The sectors that traditionally attract the most foreign investment are phosphates, cotton, infrastructure, coffee, and cocoa. South Africa, Qatar, the Netherlands, France, and Germany are the main investors (IMF).

The Lomé Port is a major asset for Togo. It is one of the largest ports in the region, turning the country into a trade hub. Togo has implemented a strategy to digitize and automate tax payment and business creation procedures. Recent reforms also include the implementation of a single window for investment, reduction of the minimum capital for the creation of a company as well as the reduction of the costs of obtaining a building permit. Foreign and domestic private entities have the right to establish and own business enterprises and participate in all forms of lucrative activities. Foreign investors also have the option to establish wholly-owned subsidiaries without the requirement to partner with a local investor. The country has improved the monitoring and regulation of power outages by recording data on the annual Average System Outage Duration Index (SAIDI) and the System Average Interruption Frequency Index (SAIFI). However, efforts are still needed in terms of protection of minority investors, execution of contracts, resolution of problems related to insolvency, and simplification of the system of payment of taxes. Corruption, lack of skilled workforce, threat to maritime trade by Gulf of Guinea piracy, and exposure to terrorist activity in the Sahel region are potential barriers to investments. Overall, Togo ranks 114th among the 132 economies on the Global Innovation Index 2023 and 139th out of 184 countries on the latest Index of Economic Freedom.