Togo

Economic Overview

The Togolese Republic is a small West African nation that has strategically positioned itself as a key regional hub for trade, transport, and finance. Its deep-water Port of Lomé is one of the most efficient on the continent and serves as a vital gateway for its landlocked neighbors (Burkina Faso, Mali, Niger). The economy is driven by a combination of these port and logistics services, a significant agricultural sector, and phosphate mining. The government has pursued an ambitious reform agenda to improve the business climate and attract foreign investment, making it a standout performer in the region. The 2025-2026 outlook is positive, supported by strong investment in infrastructure and continued growth in the services sector.

GDP Size & Growth Trajectory

Togo's economy has demonstrated resilient growth. Real GDP growth was estimated at 5.6% in 2023. This solid performance is expected to continue, with the IMF forecasting growth of 5.3% in 2025. This growth is underpinned by strong performance in the services sector (driven by port traffic and financial services) and the agricultural sector, along with significant public and private investment.

Sector Composition

• Services: This is the largest and most dynamic sector, contributing over 40% of GDP. It is dominated by transport and logistics centered on the Port of Lomé. Togo has also successfully positioned itself as a regional financial hub, hosting several major pan-African banks and financial institutions.
• Agriculture: This sector remains the backbone of employment, providing livelihoods for a large portion of the population and contributing around 40% of GDP when including forestry and fishing. Key cash crops include cotton, coffee, and cocoa.
• Industry: The industrial sector accounts for about 20% of GDP. The main industrial activity is phosphate mining, with Togo being one of the world's largest producers. The manufacturing sector is smaller, focused on processing agricultural products and producing cement.

Inflation Trends

As a member of the WAEMU, Togo has benefited from the regional central bank's credible monetary policy. After a period of elevated prices due to global shocks, inflation has been moderating and is expected to fall back within the BCEAO's target range in 2025.

Fiscal & Monetary Policy Stance

• Monetary Policy: Monetary policy is managed at the regional level by the Central Bank of West African States (BCEAO). The currency, the West African CFA franc (XOF), is pegged to the Euro, providing a strong anchor for price stability.
• Fiscal Policy: The government has been focused on fiscal consolidation while continuing to invest in strategic infrastructure. Improving domestic revenue mobilization is a key priority.

Debt Sustainability Indicators

Public debt levels are considered sustainable. The government has managed its debt profile prudently, leveraging both concessional financing and international capital markets to fund its development plan.

Table 1: Key Macroeconomic Indicators (2023-2026F)

Market Size & Demand Potential

Togo's domestic market is small, but its strategic position makes it a critical entry point to the wider West African market of over 300 million people.

Population Size and Demographics

With a population of around 9 million, Togo has a young and growing populace, with a median age of around 20 years.

Urbanization and Consumer Hubs

The capital city, Lomé, is the undisputed economic, political, and social hub, home to the port and most of the country's commercial activity.

Business Environment

Improving the business climate has been a central pillar of the government's strategy.

Ease of Doing Business & Regulatory Reforms

Togo has been one of Africa's top reformers in recent years, making significant strides in the World Bank's Doing Business rankings. The government has created a one-stop-shop for business creation, digitized tax payments, and improved property registration processes. The investment promotion agency, API-ZF, is active in facilitating new projects.

Company Registration Process

The Centre de Formalités des Entreprises (CFE) provides a streamlined process for business registration, significantly reducing the time and cost required to start a formal business.

Tax Regime

• Corporate Income Tax (CIT): The standard rate is 27%.
• Value Added Tax (VAT): The standard rate is 18%.

Togo offers significant tax incentives for companies operating in its Export Processing Zone (EPZ), including a long tax holiday and exemptions from customs duties.

Political Stability & Governance

Togo has enjoyed a long period of political stability, which has been the foundation for its economic reforms.

Political Environment

The country is a presidential republic. The same family has led the country for decades, providing a high degree of policy continuity and a stable environment for long-term investment.

Rule of Law & Investor Protection

The legal system is based on French civil law. Togo is a member of the Organization for the Harmonization of Business Law in Africa (OHADA), which provides a common, modern legal framework that simplifies contract enforcement and investor protection across the region.

Infrastructure Readiness

Togo's infrastructure strategy is centered on reinforcing its status as a regional logistics hub.

Transport and Logistics: The Port of Lomé

• Port of Lomé: This is the country's premier economic asset. It is the only natural deep-water port on the West African coast, capable of accommodating the largest modern container ships. It has become a major transshipment hub for the entire region, with state-of-the-art container terminals operated by global players like MSC and Bolloré.
• Road Corridors: The government has invested heavily in upgrading the road corridors that connect the port to the landlocked countries of the Sahel (Burkina Faso, Mali, Niger), making it a preferred trade route.
• Airport: Lomé-Tokoin International Airport is a modern airport with a new terminal, serving as a regional hub for the airline ASKY.

Energy Sector

The government is working to improve energy security and access. There is a focus on developing renewable energy sources, particularly solar power, to complement its traditional thermal power plants.

Sector-Specific Opportunities

1. Logistics, Transport, and Warehousing

This is the most significant investment opportunity. The high and growing volumes of traffic through the Port of Lomé create a massive demand for logistics services, including modern warehousing, cold storage, freight forwarding, trucking, and value-added services within the port's logistics platform.

2. Financial Services

As a growing regional financial hub, there are opportunities for banks, insurance companies, and FinTech firms to serve both the domestic market and the wider WAEMU region from a stable, well-regulated base.

3. Agribusiness and Processing

There is potential for value addition in the agricultural sector. This includes modernizing the cotton ginning industry and investing in the local processing of other cash crops like coffee and cocoa.

4. Mining (Phosphates)

The phosphate industry remains a key sector. Opportunities exist in modernizing extraction techniques and in the local production of fertilizers from phosphate rock to serve the large West African agricultural market.