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Togo

Executive Summary

With a welcoming investment climate and modern transportation infrastructure, Togo’s steadily improving economic outlook offers opportunities for U.S. firms interested in doing business locally and in the sub-region. Even with a dip in growth due to the pandemic, Togo has sustained steady economic expansion since 2008 through reforms to encourage economic development and a better business environment, growing 5.5% in 2019, 1.8% in 2020 and 4.8% in 2021. It ranked 97th on the Work Bank’s 2020 Doing Business report, an improvement of 59 places from the previous two years and the highest ranking in West Africa.

Current government policy is guided by the National Development Plan (PND) and an addendum policy roadmap for 2020-2025 that integrates business reforms and infrastructure projects designed to attract investment.

Togo launched its five-year PND in 2018, focusing on three axes. The plan’s first goal is to leverage the country’s geographic position by transforming Lome into a regional trading center and transport hub. Togo has already completed hundreds of kilometers of refurbished roadways, expanded and modernized the Port of Lome, and inaugurated in 2016 the new Lome international airport that conforms to international standards. The second goal is to increase agricultural production through agricultural centers (Agropoles) and increase manufacturing. The third goal is improving social development, including furthering electrification of the country. The government seeks private sector investment to fulfill its PND goals and has had notable successes, including a new 2022 connection with the “Equiano” subsea cable owned by Google that will dramatically improve the quality of local broadband.

In January 2021, Prime Minister Victoire Tomégah-Dogbe presented a detailed developmental roadmap to extend, supplement, and focus the goals of the PND for the remainder of the presidential term, which ends in 2025. The roadmap incorporates 42 specific projects, including universal access to identity documents and electricity; increased access to education, drinking water and sanitation; 20,000 new social housing units; a digital bank; construction of an industrial park around the port of Lome; and the extension of the road network.

Nevertheless, Togo must tackle several challenges to maintain its momentum. Challenges include a weak and opaque legal system, lack of clear land titles, and government interference in various sectors. Corruption remains a common problem in Togo, especially for businesses. Often “donations” or “gratuities” result in expedited registrations, permits, and licenses, thus resulting in an unfair advantage for companies that engage in such practices. Although Togo has government bodies charged with combatting corruption, corruption-related charges are rarely brought or prosecuted. The government has made efforts to professionalize key institutions such as the Public Procurement Regulatory Authority (ARMP), the Chamber of Commerce (CCIT), and the National Employment Agency (ANPE) including with new anti-corruption, ethics, and transparency measures.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2020 134 of 180 http://www.transparency.org/research/cpi/overview
Global Innovation Index 2020 125 of 132 https://www.globalinnovationindex.org/analysis-indicator
U.S. FDI in partner country ($M USD, historical stock positions) 2019 N/A https://apps.bea.gov/international/factsheet/
World Bank GNI per capita 2019 $690 https://data.worldbank.org/indicator/NY.GNP.PCAP.CD

 

1. Openness To, and Restrictions Upon, Foreign Investment

3. Legal Regime

4. Industrial Policies

5. Protection of Property Rights

6. Financial Sector

8. Responsible Business Conduct

Responsible Business Conduct (RBC) is not officially addressed in Togo by the government, other than as it relates to corruption and criminal activity. RBC and its variants such as “Fair Trade” is known by independent NGOs and businesses which promote these practices and are able to do their work freely.

Some American-owned companies follow generally accepted RBC principles and participate in outreach programs to local villages where they supply, among other things, school buildings, water, electricity, and flood abatement resources. In accordance with a law passed in March 2011, new construction projects must now address environmental and social impacts.

Togo joined the Extractive Industries Transparency Initiative (EITI) in 2009 and has been officially recognized as EITI-compliant since 2013. Togo’s EITI Secretariat carries out a yearly verification of financial statements relating to the extractive industry.

The Ministry of Civil Service, Labor, Administrative Reform, and Social Protection sets workplace health and safety standards and is responsible for enforcement of all labor laws. There have been no high-profile, controversial instances of private sector impact on human rights or resolution of such cases in the recent past.

Togolese law provides workers, except security forces (including firefighters and police), the right to form and join unions and bargain collectively. There are supporting regulations that allow workers to form and join unions of their choosing. Workers have the right to strike, although striking healthcare workers may be ordered back to work as necessary for the security and well-being of the population. While no provisions in the law protect strikers against employer retaliation, the law requires employers to get a judgment from the labor inspectorate before they fire workers. If firms fire workers illegally, including for union activity, the companies must reinstate the employees and compensate them for lost salary.

The law recognizes the right to collective bargaining; representatives of the government, labor unions, and employers negotiate and endorse a nationwide agreement. This collective bargaining agreement sets nationwide wage standards for all formal sector workers. For sectors where the government is not an employer, the government participates in this process as a labor-management mediator. For sectors with a large government presence, including the state-owned companies, the government acts solely as an employer and does not mediate.

The government follows OHADA recommended rules and regulations on corporate governance, accounting, and executive compensation.

Private security companies are present in Togo, but the country is not a participant in the International Code of Conduct for Private Security Service Providers Association (ICoCA).

Additional Resources

Department of State

Department of the Treasury

Department of Labor

Climate Issues

Togo seeks unconditional greenhouse gas emissions reductions of 21% below its business-as-usual (BAU) scenario by 2030, compared to the projected increase in emissions without the new government measures. It has also made a conditional commitment to reduce emissions by an additional 30% by the same date, contingent upon international support and finance. For methane emissions, Togo’s National Plan for the Reduction of Air Pollution and Short-Lived Climate Pollutants projects a 56% reduction in methane emissions by 2040 versus the BAU scenario absent government action. Togo has not set a net-zero greenhouse gas emissions goal and was ranked 37/51 for Middle East/Africa by Climatescope in 2021.

Togo’s current National Electrification Strategy aims to provide universal access to electricity by 2030, while increasing the share of renewables in Togo’s energy mix to 50% by the same date by ambitiously rolling out new power plants and off-grid solutions. In 2021, Togo launched one solar and one thermal power plant and has plans for two additional solar plants, 315 mini-grids, and 550,000 solar kits.

Togo government has limited capacity to monitor natural capital. The National Agency of Environment Management (Agence Nationale de Gestion de l’Environnement, ANGE) under the Ministry of Environment and Forestry Resources (MERF) enforces environmental regulations, and there has been significant progress over the past two decades in promoting sustainability. While still lacking personnel and equipment, agency technical capabilities are adequate for evaluating environment and social risks for major government projects.

Togo is also working to increase the legal weight of environmental standards. A revised public procurement law and new public-private partnership (PPP) both mandate consideration of environment and climate change impact, encouraging low carbon infrastructure projects and incorporation of climate adaption and mitigation measures.

9. Corruption

The Togolese government has established several important institutions designed in part to reduce corruption by eliminating opportunities for bribery and fraud: the Togolese Revenue Authority (OTR), the One-Stop Shop to create new businesses (CFE), and the Single Window for import/export formalities.

In 2015, the Togolese government created the High Authority for the Prevention and Fight against Corruption and Related Offenses (HAPLUCIA), which the government designed to be an independent institution dedicated to fighting corruption. The government appointed members in 2017. HAPLUCIA encourages private companies to establish internal codes of conduct that, among other things, prohibit bribery of public officials. HAPLUCIA presented on February 7, 2019 its strategic plan for the period 2019-2023; it set up a toll-free number, the “8277” to receive complaints and denunciations.

Anti-corruption laws extend to family members of officials, and to political parties and the government does not interfere in the work of anti-corruption NGOs.

In 2011, the government effectively implemented procurement reforms to increase transparency and reduce corruption. The government announces procurements weekly in a government publication. Once contracts are awarded, all bids and the winner are published in the weekly government procurement publication. Other measurable steps toward controlling corruption include joining the Extractive Industries Transparency Initiative (EITI) and establishing public finance control structures and a National Financial Information Processing Unit.

Togo signed the UN Anticorruption Convention in 2003 and ratified it on July 6, 2005.

Resources to Report Corruption

Contact at the government agency or agencies that are responsible for combating corruption:

Essohana Wiyao
President of HAPLUCIA, the High Authority for the Prevention and Fight against Corruption and Related Offenses
Tel. +228 90 21 28 46 / 90 25 77 40
Email: essohanawiyao@yahoo.fr 
Lomé, Togo

Directeur, Anti-Corruption
Office Togolais des Recettes (OTR)
41 Rue des Impôts
02 BP 20823
Lomé, Togo
+228 – 22 53 14 00
otr@otr.tg 

Contact at a “watchdog” organization:

Samuel Kaninda
Regional Coordinator, West Africa
Transparency International
Alt-Moabit 96
10559 Berlin
Germany
+49 30 3438 20 773
skaninda@transparency.org 

10. Political and Security Environment

After a period of political instability and economic stagnation from 1990 to 2007, the government started the country along a gradual path to political reconciliation and democratic reform. Togo has held multiple presidential, legislative, and local elections that were deemed generally free and fair by international observers, though the most recent legislative elections were boycotted by the majority of the opposition. Political reconciliation has moved slowly. A political crisis erupted in 2017 regarding the failure of the government to implement political measures, such as presidential term limits. After international facilitation between the government and opposition parties, in May 2019 the government implemented non-retroactive term limits and a two-round election system. The government held local elections in 2019, the first since 1986. President Faure Gnassingbe was elected for a fourth term on February 22, 2020 in a peaceful election.

Political protests still occur on occasion and can often lead to tire burning, stone throwing, and government responses include the use of tear gas and other crowd control techniques. There are no known examples over the past ten years of damage to projects and/or installations pertaining to foreign investment due to political violence.

11. Labor Policies and Practices

The labor market is predominately unskilled and there is a shortage of skilled labor and English-speaking employees. Some migrant farm workers arrive from Ghana and Benin based on familial ties. Widespread underemployment exists, and an estimated 3 million workers participate in the informal economy, which motors the economy.

In general, government labor policy favors employment of nationals.

Regulations require that firms hire workers with time specific contracts that include severance requirements. The labor code, and regulations called the “Convention Collective” differentiate between layoffs and firings, but both require severance payments. Free Trade zones offer different labor law provisions to encourage investment.

Public employee unions (teacher, judicial clerks, etc) use collective bargaining, and are willing to take to the streets in non-violent protest to raise the profile of their demands. Labor disputes are often resolved on an ad-hoc basis, usually with the intervention of parliamentarians.

Togo adopted a new Labor Code on December 29, 2020, replacing the 2006 code. The new code has increased social protection measures, requires employers to register employees with the National Social Security Fund (CNSS), and introduces severance pay and precarious work premiums. At the same time, it provides greater flexibility in the labor market by allowing for a variety of contract types depending on a company’s activities (e.g. seasonal labor, project-based contracts, telework). Finally, the new code allows the government to favor disadvantaged geographic areas and social groups.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount  
Host Country Gross Domestic Product (GDP) ($M USD) N/A NA 2020 $7.575
billion
www.worldbank.org/en/country
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2017 $350 2017 $0 BEA data available at https://apps.bea.gov/international/
factsheet/
Host country’s FDI in the United States ($M USD, stock positions) 2017 $0 2017 $0 BEA data available at https://www.bea.gov/international/
direct-investment-and-multinational-
enterprises-comprehensive-data
Total inbound stock of FDI as % host GDP N/A N/A 2020 8.5% UNCTAD data available at

https://stats.unctad.org/handbook/ 

*Coordinated Direct Investment Survey – Data by Economy – IMF Data
Note: U.S. based ContourGlobal built a 100 megawatt power plant in Togo in 2010. This FDI is not recorded in official U.S. government statistics.

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data (through 2020)
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 2,302 100% Total Outward 5,312 100%
South Africa 943 41% Niger 1,763 33%
Qatar 546 24% Benin 561 11%
Cyprus 138 6% Gambia 541 10%
Côte d’Ivoire 112 5% Sao Tome & Principe 444 8%
Gibraltar 83 4% Côte d’Ivoire 428 8%
“0” reflects amounts rounded to +/- USD 500,000.

Table 4: Sources of Portfolio Investment

Data not available.

14. Contact for More Information

Political-Economic Section
U.S. Embassy, Lomé
4332 Blvd Eyadéma – BP 852, Lomé, Togo
+228 2261 5470, ext 4466
togocommercial@state.gov 

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