Togo

With a growth rate of 2.2%, Togo’s real gross domestic product (GDP) began a slight recovery in 2009, which should continue in 2010 and 2011 with growth rates of 2.5% and 3.6% respectively. Inflation slowed considerably during 2009 with a rate of 1.9% for the year, against 8.7% in 2008 primarily due to a fall in oil prices and food, thanks to the country’s abundant agricultural output. Because of this decelerated inflation, since November 2009, Togo has met the 3% convergence criterion established by the West African Economic and Monetary Union (WAEMU).

The economy’s growth in 2009 reflects strong performance in the agricultural sector, which benefited from good weather and from government aid, mostly in the form of subsidies for fertilisers. While the factors that hindered growth in 2008 – major flooding, increased prices for oil products and food, and electricity supply problems – were absent, growth in 2009 was hampered by persistent problems in the phosphate sector. Output continues to decline due to obsolete production facilities at the national phosphate company SNPT, and by stagnating levels of cotton production following the financial troubles at the Togolese cotton company Sotocom. After Sotocom was dissolved, it was succeeded in January 2009 by the new cotton company of Togo, NSCT. In addition, the planned investments in infrastructure were hampered by the country’s low absorptive capacity. Lastly, business and shipping via the port of Lomé were affected by the rerouting of certain imports through neighbouring countries after bridges collapsed in Togo in the July 2008 floods, compounded by the effects of the international economic and financial crisis.

In 2009, the Togolese authorities continued with structural reforms engaged under the three-year financial programme supported with resources from the Poverty Reduction and Growth Facility (PRGF) approved by the International Monetary Fund (IMF) in April 2008. Thus in June 2009, the government defined and approved the complete Poverty Reduction Strategy Paper (PRSP-C). It also formalised a priority action programme and focused on rebuilding public finances and restructuring the financial sector. To boost the economy and restore trust, the authorities adopted and launched a plan to repay some of the arrears on domestic debt. A new public procurement law was also voted on and enacted in June 2009 to improve the country’s absorptive capacity and thereby accelerate the implementation of investment programmes. Lastly, the country sought to normalise its relations with the donor community, and is expecting an increase in grants.

The main challenge Togo faces in mobilising public resources lies in broadening the tax base, with agriculture not being taxed and with the informal sector, endemic throughout the economy, developing rapidly. Since 2008, the government has progressively reduced corporate and personal tax rates to encourage economic stakeholders to leave the informal sector. Existing tax exemptions have also been repealed, and measures to improve collection of taxes and customs duties have been introduced. Despite progress, the human resource gap continues to hinder administrative effectiveness.

Togo's slight recovery in economic growth in 2009 is underpinned by the agricultural sector's strong performance. However, recurring problems in the cotton industry and the phosphate sector remained an obstacle, preventing Togo from maximising its growth potential.

The Togolese economy is dominated by the primary sector, which accounted for 39% of GDP in 2009. Cotton, cocoa and coffee are the country’s main cash crops, while cassava, yams, maize, millet and sorghum are the most important food crops. The agricultural sector’s strong performance, with 8% growth in 2009, up from 2.8% growth in 2008, was due to favourable weather in the 2009/10 season and public measures to support food crops. Indeed, despite a three-week dry spell in May, rain was plentiful and well distributed in the first eight months of 2009. In 2009, the volume of food and cash crops rose by 8% and 7.2%, respectively, up from 3.6% (food crops) and -13.1% (cash crops) in 2008. The weak performance in 2008 was caused by floods that affected the country.

The government's agricultural recovery strategy also boosted growth in food crop production. The agricultural sector benefited from various types of support including the provision of fertilisers at subsidised prices, lower costs for ploughing, recruitment of qualified management staff, and an awareness and mobilisation campaign aimed at farmers. Thus 30 000 tonnes of fertiliser were made available to farmers for the 2009/10 season, up from 8 000 tonnes in the previous fiscal year. The price of these inputs was revised downwards, from XOF 12 500 (CFA Franc BCEAO) in 2008/09 per 50 kg bag to XOF 11 500 in the 2009/10 season. The cost of tractor ploughing was fixed at XOF 20 000 per hectare, down from XOF 25 000 in 2008/09. As for human resources, 250 engineers and technicians were recruited on a contract basis. There was also a massive awareness and mobilisation campaign aimed at producers. Lastly, the high producer prices in 2008/09 attracted new farmers, as evidenced by the increased amount of land planted with cereals and tubers, respectively 4% and 7% higher in 2009/10 than in the preceding year.

The strong overall performance of cash crops masks the stagnation in cotton. Cocoa and coffee production grew by 29% and 23.3% respectively, yielding a 7.2% overall increase in cash crops in 2009. Sotoco’s financial problems and the start-up phase of its successor company, NSCT, underlie the stagnation in cotton production. The payment arrears that Sotoco accumulated over recent harvests led many producers to lose confidence, leave the sector and switch to food crops even though the national government had agreed to cover part of the unpaid debt. Sotoco was dissolved and was succeeded by NSCT in January 2009. The Togolese government is the majority shareholder in NSCT holding 60% of the shares, the other 40% being held by cotton producers’ organisations.

The secondary sector (extractive industries, manufacturing industries and construction) accounted for just 20.8% of GDP in 2009. Phosphates, cement and clinker remain the principal mining and mineral products and the sector’s leading exports.

The dilapidation of national phosphate company SNPT's equipment, has led to a constant decline in phosphate production and thus constrains development of the secondary sector. At 700 000 tonnes, 2009 production was below the annual target of 850 000 tonnes and lower than 2008 production, which, at 842 000 tonnes, fell short of its target of 1 million tonnes. Some machines had to be taken out of service for repairs.

A restructuring of the phosphate sector is essential to the Togolese economy, which has large reserves estimated at 84 million tonnes of unconsolidated ore and about 3 billion tonnes of phosphate carbonate. To begin restructuring the sector, a financial and strategic audit was ordered, and its conclusions are being discussed. SNPT began its reorganisation by replacing eight departments with two new ones: an industrial unit and a financial unit. It made 616 employees redundant in January 2009, reassigned the others to production roles, and implemented new procedures for management accounting and human resources. SNPT also invested XOF 12 billion in 2009 to buy new machinery and spare parts. According to some estimates, SNPT’s output could reach 3 million tonnes of phosphate with the engagement of a strategic partner. SNPT’s own estimates remain more modest; they have set a target of 1 million tonnes for 2010, 1.5 million tonnes for 2011 and 1.8 million tonnes for 2012, based on two new quarries starting production in 2011. However, the arrival of new equipment will require current machinery to be revised, a process that will slow the increase in production.

The restructuring of SNPT was delayed after it turned down a XOF 45 billion loan granted by the Islamic Development Bank. SNPT could not accept the loan since the lending terms violated the concessionary terms of the HIPC (Heavily Indebted Poor Countries) Initiative from which Togo benefits.

The 4.4% growth seen in the electricity, water and gas sector in 2009 was caused by reactivation of the Akosombo hydroelectric dam in Ghana, which had been shut down temporarily by the drought of March and April 2008. The sale of medium-voltage and low-voltage current could thus increase in the first half of 2009. The activation of the 100-megawatt Global Contour power station by the second quarter of 2010 will reduce the constraints on the country’s power supply. Nevertheless, new investments will remain necessary to improve the quality and range of the distribution network.

The construction industry continued to improve, with 18.1% growth in 2009, up from 15.2% in 2008. This improvement reflects increased local sales of cement and the start of infrastructure reconstruction projects, particularly roads, after the floods that affected the country in 2008.

The tertiary sector is the second most important in the Togolese economy, accounting for 24.5% of GDP in 2009. Togo has taken advantage of its geographic location and its deep-water port by developing trade and transport services targeting landlocked neighbouring countries, namely Niger, Burkina Faso and Mali. The combined impact of the economic and financial crisis and the rerouting of some of the sub-region’s imports to other ports due to bridge collapses in 2008 affected both trade operations, which declined by 4.4% in 2009, and transport and communication operations, which grew modestly by 4.8% in 2009, compared to 11.4% in 2008. In the first three quarters of 2009, port traffic for loading contracted by 21.1% and traffic for unloading contracted by 25.8% compared to the previous year.

Togolese emigrants’ remittances remained steady in 2009 despite the context of international crisis, with a monthly average of XOF 10.28 billion for the year from January to October 2009, compared to a monthly average of XOF 10.34 billion in 2008. Their year-on-year growth rate did, however, begin to slow in the second quarter of 2009.

Final demand was driven by private consumption, which accounted for 86% of GDP in 2009 compared with just 12.9% for government consumption. Gross fixed capital formation was also dominated by the private sector, which accounted for 14.6% of GDP, against 3.7% for the public sector. Weak performance in the public sector is a result of the government’s problems in implementing investment expenditure. A new law on public procurement should make it possible to increase the country’s absorptive capacity to reach a target of 70% execution rate, speeding up procedures while reducing overlapping controls in the spending chain.

Togo’s external position remains negative. Exacerbated by the problems in the cotton and phosphate industries, the deficit made a 5.1% negative contribution to GDP growth in 2009. A recovery in cotton and phosphate output could help reverse this situation in the coming years.

The authorities have committed to continuing the task launched in 2008 of reorganising public finances by restoring the fiscal discipline set out in the PGRF programmes. 

In 2008, fiscal policy resulted in a positive primary balance, and in 2009 the authorities tried hard to make the most of this modest cushion to sustain the economy. The government’s first priority was to address the slowness with which projects were being executed, especially since the 2008 budget surplus was partly due to under-implementation of investment expenditure needed for urgent infrastructure repairs. The 2009 fiscal policy thus proved less conservative than the previous year’s, and the primary balance deteriorated, resulting in a deficit of 0.5% of GDP, as opposed to a 0.5% surplus in 2008. The deficit was deepened by higher scheduled capital expenditure on repair and maintenance of the road infrastructure, and by the increase in the wage bill.

The budget implementation rates were satisfactory in 2008, with 106.2% implementation of revenue and 98.7% implementation of expenditures. By the end of the first half of 2009, budgetary targets for revenue collection had been met, at 53.1% of the target for the year, while implementation of expenditures was slightly delayed, at 44.3%. The situation remained steady in the third quarter with revenue implementation reaching 82.4% and expenditure implementation rising to 70.4%. The strong performance of the Togolese inland revenue (DGI) in the first half of the year reflected an increase in the number of tax audits, implementation of follow-up collections measures, and policies to broaden the tax base. As a result, tax collection in the first half of the year exceeded the initial budget forecasts. The authorities intend to keep the volume of internally financed investment at 3.6% of GDP. However, the low rate of implementation of investment expenditure (29% of GDP) in the first three quarters of 2009 attests to the difficulties encountered. Inadequate administrative capacities limit the country’s absorptive capacity and curb its investment expenditure. The reform of the public procurement code seeks to remedy these problems.

The current format in which public finances are presented makes it difficult to assess the degree of convergence between the allocation of funds and the priorities of the Poverty Reduction Strategy Paper (PRSP). Nevertheless, the priority action plan defined in 2009 was taken into account in the 2010 budget act in order to enable an allocation of funds consistent with the priorities defined by the PRSP.

In 2009, to reorganise its public finances, Togo initiated a strategy of settling the arrears it had accumulated since the 1990s. The socio-political crisis that affected the country in the 1990s and the corollary suspension of donor aid led Togo to run up considerable domestic debt, estimated post-audit at XOF 342 billion including XOF 325 billion in debt validated on 31 December 2006. In January 2009, the government set up the CNADI debt settlement commission (Commission nationale d’apurement de la dette intérieure). Thus, cash payments to small holders and money order payments of commercial debts less than or equal to XOF 103 million began in August 2009, injecting liquid assets into the economy. In all, 4 336, or 87% of the government’s creditors are small holders. As of 30 October 2009, 672 creditors had been repaid a cumulative sum of XOF 3.5 billion. The authorities plan to securitise some other validated arrears.

Public sector salaries and wages for 2009 were estimated at 37.3% of tax revenue, which exceeds the WAEMU convergence ratio, fixed at 35%. The growth of the wage bill caused the ratio to rise above its 2008 level (32.7%). And recruitment programmes aimed at bridging the human resource gap in the public sector will continue to increase the wage bill, causing the ratio to deteriorate if tax revenue does not follow.

Since 2006, the country has worked on restoring relations with the international community following the suspension of aid due to the socio-political crisis. The 2009 budget forecasts a 12.5% increase in grants over 2008 levels. However, divergent rates of implementation from one year to the next actually result in relatively stable flows of financing between the two years, around XOF 28 billion. The 2010 budget forecasts a strong increase in grants, which should reach XOF 88.3 billion.

Because Togo is a member of the West African Economic and Monetary Union (WAEMU), its monetary policy is directed by the Central Bank of West African States (BCEAO). The economy is therefore subject to the WAEMU convergence criteria.

In 2009, inflation decelerated from the combined impact of falling prices for oil products and food. The good food crop harvests from July to September helped stabilise prices for food products, which rose 2.4% in 2009, a net deceleration compared to the 20.4% rise recorded in 2008. Inflation for 2009 was therefore kept within the 3% convergence criterion set by WAEMU, with a 1.9% rise in the price index as compared to 8.7% in 2008. The inflation forecast for 2010 is 2.4%. The forecasts predict relative price stability for imported food products, satisfactory food production in the 2009/10 agricultural season, and stable petrol pump prices.

BCEAO monetary policy tends to be aligned with that of the European Central Bank, given the fixed parity between the CFA franc and the euro. The BCEAO thus led a cooperative policy by decreasing the repurchase rates and the discount rate by 50 basis points, lowering them from 4.75% to 4.25% and from 6.7% to 6.25% respectively in 2009. Because of the international economic and financial crisis, the BCEAO implemented an expansive open market policy by increasing liquidity injections into capital markets in 2009. However, the growth of money supply in Togo slowed in 2009, to an estimated 5.6%, down from 18.2% in 2008 and 16.8% in 2007.

As for credit, domestic credit grew by an estimated 8% in 2009, a net deceleration compared to 2007 and 2008, when it reached 32.3% and 22.2%, respectively. This slowdown was due to sluggish economic activity and the continued weakness of financial intermediation. In the first three quarters of 2009, credits to the economy increased by 10.5%, driven by the 29.2% growth in medium-term and long-term loans. But the sustained growth of medium-term and long-term loans was accompanied by a 28.9% growth in overdue loans. The net position of government allocations remains unchanged.

Lastly, external assets were estimated at XOF 243.5 billion for 2009, representing an increase of XOF 5 billion over the level of reserves in 2008, thanks to the expected surplus in the balance of payments for 2009.

Togo’s external sector remained negative in 2009 with a total trade deficit equal to 8% of GDP, as in 2008. The reduction in imports caused by the decrease in oil product imports prevented any significant improvement to the trade balance, which remained in deficit. The trade deficit was equal to 14.1% of GDP in 2009. Cotton and phosphate exports declined markedly, accounted for by the collapse in worldwide prices for these two commodities and production problems. The decline was particularly noticeable for phosphate, the international price of which had risen significantly in 2008.

In December 2008, Togo fulfilled the admission criteria to reach the decision point for the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. This aims to reduce the debt of heavily indebted poor countries that apply the adjustment and reform programmes defined jointly by the International Monetary Fund (IMF) and the World Bank. As of the decision point, Togo’s foreign debt had reached 2.2 billion US dollars (USD) in nominal value at the end of 2007, equivalent to 72% of GDP. The authorities plan to fulfil the requirements to reach the HIPC completion point in 2010. Under the Multilateral Debt Relief Initiative (MDRI), Togo will then be able to apply for relief of additional debt estimated at USD 753 million, in nominal terms. In 2009, the Togolese authorities thus also undertook measures to reach the triggers in the HIPC Initiative framework, namely: preparing a complete PRSP, creating an audit office and a public procurement regulatory agency, and publishing phosphates sector activity data.

Togo’s ranking in the 2010 edition of the World Bank’s Doing Business report slipped by two places. The country is therefore ranked 165^th among the 183 economies listed. Some positive developments have taken place however, including a reduction in the corporate tax rate and in the number of steps involved in creating a company, although the duration of the total procedure increased.

The Togolese authorities undertook a series of legislative reforms in 2009 aimed at facilitating and stimulating private sector activity. To partially alleviate the liquidity shortages weighing on the private sector and to restore a climate of trust, the Togolese government launched a debt settlement strategy vis-à-vis its domestic debt, which it had been accumulating since the 1990s.

The legislative environment was also updated through the overhaul of the investment code. With a view to adopting a harmonised code among WAEMU countries, the previous code from 1989 had been suspended in 1996, creating a legal vacuum. The overhaul, begun in 2006, led to the final draft of the code in 2009, which was submitted to the government and should be adopted in 2010. The SME charter (for small and medium-sized enterprises) was adopted in 2009 with the goal of regulating their activities and reducing the informal sector through assistance measures and financing guarantees.

The national banking system was not significantly affected by the financial crisis because of its poor integration into the world system. In 2009, in order to remedy the high volume of unproductive debt which restrained bank intermediation for many years, the Togolese authorities set about restructuring the banking system by beginning to securitise bad debt. The process consists of substituting government securities for the State banks’ bad debts and those owed to private banks by public enterprises. These securities should be repaid by the government over a seven-year period. By the end of March 2009, this process made it possible to achieve the structural benchmark for the banks’ solvency ratio as defined in the PRGF financial programme. As for the public banks, the process of privatising them over time has begun, and pre-applications to buy out the government’s shares are expected by February 2010.

In June 2009, the passage of the public procurement law enabled a reform of the system. The overhaul sought to end the excessive reliance on private agreements and restricted bidding processes, of which pre-reform accounted for more than 85% of government procurement. These contracts thus avoided competition procedures and were outside the control of the national procurement commission. Now, approved contracts are published on an official site and in the Chamber of Commerce publication “L’Entrepreneur”.

The government undertook a programme to divest itself of public enterprises. The current bank restructuring includes plans to eventually privatise the public banks BTCI (Banque togolaise pour le commerce et l’industrie), BTD (Banque togolaise de développement), BIA (Banque interafricaine) and UTB (Union togolaise des banques). The process of identifying strategic investors has begun.

During 2009, repair and maintenance work began on the road network following destruction caused by flooding in 2008. The goal is to restore this network, which generates revenue for Togo by providing transport access to neighbouring landlocked countries. The current maintenance work has focused on reshaping and repairing about 500 km of roads, at a total cost of roughly XOF 29 billion.

The country’s past socio-political troubles led to anarchic exploitation of natural resources, which in turn caused ongoing degradation of forest and wildlife resources. The government’s priority action plan envisages defining a national sustainable development strategy to combine management of natural resources with the need for strong, sustained growth.

Given its considerable phosphate resources, Togo plans to join the Extractive Industries Transparency Initiative (the EITI promotes stronger governance in member countries by promoting more transparent management of their extractive operations). The HIPC programme is already consistent with the prospect of this membership as it involves regular publication of government revenue derived from the phosphate sector as well as of payments from the new national phosphate company SNPT to the Togolese government. An audit firm’s report, reconciling the phosphate sector’s sales revenue data with the taxes the sector paid to the public treasury for 2007, was published in February 2008. The equivalent document for the 2008 fiscal year is being prepared.

Over the last ten years, total tax revenue increased slowly from 12.3% of GDP in 1999 to 14.9% in 2009. Since 2008, the government has set out to broaden its tax base by lowering tax rates to encourage actors to leave the informal economy. This policy ended up slowing the growth rate of total tax revenue. Indeed, the improvement in tax collection was partly concealed by the lower tax rates. The socio-political crisis of the 1990s reduced the amount of aid the country received. Since 2006, Togo has been working to restore its relations with the donor community, as evidenced by the progressive increase in grants. These accounted for 3.1% of GDP in 2009, up from 1.4% in 2006. The continuing normalisation of relations with the grant-making community should allow grants to reach a rate equal to 5.6% of GDP in 2010.

Tax policy is governed by the general tax code instituted by law No. 83­-22, dated 30 December 1983, and amended by various budget acts, conventions and WAEMU guidelines. Customs duties are defined by the customs code, which is supplemented by the WAEMU common external tariff. In the 2010 edition of the World Bank’s Doing Business report, tax laws remain classified as a handicap for Togo’s business climate. In a ranking based on the number of taxes and the administrative procedures required to pay them, Togo ranked 155^th among the 183 countries listed, although it was five places higher than the year before.

The percentage of tax revenue resulting from direct taxation declined progressively between 1999 and 2009, from 28.1% to 22.1%, coinciding with an increase in customs revenue, which rose from 46% to 55.5%. The percentage of GDP accounted for by direct taxes declined progressively between 2006 and 2009, from 4% to 3.2%. The percentage of GDP accounted for by indirect taxes was stable, averaging around 3.4%, between 2006 and 2009. Customs duties accounted for an average of 8.1% of GDP for the same period.

To reduce the informal sector, corporate tax rates and personal income tax rates continued to be lowered. The corporate income tax for industries decreased from 37% to 30% in 2009, and the 2010 budget act will lower it to 27%. Likewise, the tax rate on other companies has fallen from 40% in 2008 to 33% in 2009, and will fall further to 30% in 2010. Personal income tax, set at 45% for 2009, will also be lowered to 40% in the 2010 budget. The 2009 budget had, however, repealed some tax exemptions to companies in the export processing zone (EPZ) that hold legally granted EPZ status.

The main tax policy measures undertaken in 2008 and 2009 focused on broadening the tax base, improving tax collection, treasury reform and decentralisation through the establishment of regional offices, and computerising services. The government prepares and implements budget acts, but it is the National Assembly that approves them. Tax and customs revenue operations are carried out by the tax and customs authorities, which document, settle, collect and transfer the proceeds to the treasury. To improve corporate tax compliance, a centralised agency called the CFE (Centre de formalités des entreprises) was created in 2009 as a “one-stop” solution for companies. The CFE reduced the number of procedures from thirteen to seven, but these streamlined procedures took more days to complete: 75 instead of the previous 53. A process of decentralisation to regional authorities is underway, with the establishment of five regional offices reflecting the country’s administrative and territorial organisation. A portion of the local business and property taxes is allocated to the territorial authorities’ operating budgets.

The authorities were faced with difficulties in enlarging the tax base because a major part of the economy, namely agriculture, is not taxable and because of the rapid development of the informal sector. In addition, the financial authorities’ effectiveness was hampered by evasion and tax fraud as well as tax and customs exemptions. This situation is heightened by the shortage of tax auditors in the financial authorities and by a mismatch between the incentive measures and the objectives that were set. Taxpayers complain about the heavy burden imposed by the tax rate, penalties, and tax collection terms. Despite communication efforts by the inland revenue, the tax provisions remain largely misunderstood.

Since 2008, the authorities have sought to broaden the tax base by reducing corporate and personal tax rates. The goal is to lure tax-payers out of the informal sector, which is endemic in the Togolese economy. The administrative formalities for registering a company represent non-tax-related barriers to entry into the formal sector. The 2009 budget act repealed the existing tax exemption scheme, particularly as it applied to EPZ companies. Through the communication and public relations division founded in 2007 to promote a sense of civic responsibility about paying taxes, the inland revenue is seeking to improve its communication. At the start of each year, the fortnightly publication “Le cahier fiscal” (“The Tax Journal”) spreads the word about the provisions of the budget act. Taxpayers are informed of their rights and obligations through brochures and leaflets and through the broadcast of public awareness programmes. A revision of the tax code is currently in progress. A new customs code was drafted and should be approved by the council of ministers.

To combat fraud and tax losses, the authorities introduced messages aimed at improving tax enforcement, such as: establishing a research and verification department and an organisation and service audit department; computerising the processing of tax returns; improving accounting by classifying companies into three tax categories (large, small, medium-sized); streamlining the tax system and procedures applicable to small and medium-sized enterprises; and, rationalising filing procedures for medium-sized and large tax-payers. Regarding customs administration, computerising the main customs offices will enable better codification of duty-free privileges and tracking the itinerary of goods in transit. But the serious human resource shortage in the public sector poses a major obstacle that cannot be made up for with new recruitment.

The country also plans to join the Extractive Industries Transparency Initiative (EITI). To improve transparency and management of its mining revenue, Togo should, as a preliminary measure, reconcile the declared revenue flows received by the government and the declared payment flows paid by SNPT.

The 2007 legislative elections, which the international community judged to be free and transparent, make it possible to begin normalising relations between Togo and the grant-making community. Togo’s creditors who are members of the Paris Club, the European Union, the IMF, the World Bank and the United Nations Development Programme (UNDP) have re-established ties with Togo.

A peaceful presidential election was held on 4 March 2010. The standards for candidacy were made less stringent by eliminating the requirement of renouncing any foreign nationality to stand for president. Later, tensions pitted the opposition parties, who were calling for a double ballot, against supporters of the current system: a single-ballot election decided by a relative majority.

Faure Gnassingbé, the incumbent president and son of General Eyadéma who led Togo for thirty-eight years, was declared re-elected with 60.92% of the vote. His main opponent, Jean-Pierre Fabre, immediately denounced the outcome, declaring himself the true winner. The European Union (EU), which had funded the election, denounced “insufficient transparency measures.”

Social dialogue was maintained with the creation of a national dialogue council (CNDS), a tripartite organisation comprised of government, union and employer representatives.

The most recent data on the social situation in Togo date from the 2006 QUIBB survey on basic well-being indicators. This survey estimated that 61.7% of the population lives below the poverty line, some 3.24 million people spread over 535 486 households. The poverty rate is very high in rural areas, where three out of four households are poor, as compared to two out of five in urban areas. Geographically, the poor are distributed as follows: just under half (44.6%) live in the Maritime and Plateaux regions where the poverty rates, of 69.4% and 56.2% respectively, are the lowest compared with other regions. Next come the Centrale and Kara regions, which together account for around a third of Togo’s poor with rates of 77.7% and 70% respectively. Lastly, comes the Savanes region, which has the highest concentration of poverty (90.5% of residents), although it accounts for only 18.4% of the country’s poor. Poverty is also strongly correlated with malnutrition, to the point where 64.2% of the poor are malnourished. Again, these figures predate external shocks such as the rise in the cost of food products, and the floods that affected the country in 2008. Togo’s labour market is extremely insecure and is marked by the growth of the informal sector. Including the agricultural sector, the informal sector includes more than 80% of the working population. According to the latest census, unemployment affected 32.6% of the working population in 2006. A reform of the labour market is planned for 2010.

The percentage of budget expenditure allocated to the priority sectors remains weak, although it was 9.4% of GDP in 2009, up from 7% in 2008. Health thus received 3.3% of GDP, and the education sector 5%. This weakness is cause for concern in reference to the Millennium Development Goals (MDGs). Only two of the goals – universal primary education and the fight against AIDS – seem achievable by 2015.

School attendance among 6­ to 11­ year-olds is relatively strong in Togo, and the primary school net enrolment rate rose from 63% in 2000 to 74.6% in 2006. The literacy rate among people aged 15 and up (56.9% in 2006) conceals a strong disparity between men and women (70.3% and 44.4% respectively).

In the field of health, the priorities are to restore infrastructure and equipment, and recruit qualified personnel. In 2009, renovations and equipment upgrades were performed at three university hospitals and six regional hospitals. Under the country’s PNDS development plan (Plan national de développement sanitaire) for 2009­-13, there are still 60 peripheral care units and 15 polyclinics or prefectoral hospitals to be renovated, and 44 new health centres to be built. The fact that such a small percentage of the national budget is allocated to the health sector is exacerbated by real problems with the disbursement and mobilisation of financial resources.

Though health services are well distributed geographically, the sector faces a lack of human resources and scant use of the available services. The system seems to have a solid health infrastructure. Results from the 2006 national MICS3 Multiple Indicator Cluster Survey show that 62.5% of the population lives within 2.5 km of a healthcare facility. In spite of this good geographical accessibility, the actual use of public health services decreased considerably, with the percentage of the population using health centres fluctuating between 25% and 29%. The ongoing deterioration of infrastructure and equipment, the shortage and demotivation of staff, the low quality of care, the relatively high cost of services, and competition from the private sector explain the disaffection faced by public health services. The system is also affected by a lack of human resources. In 2008, staffing reached 8 064 workers for a population estimated at 5.6 million. The staff is unevenly distributed, with nearly 80% concentrated in urban centres, mainly Lomé and the Maritime region. In view of this shortage, in January 2008 the authorities extended the minimum retirement age to 60 for senior managers and 57 for everyone else, and recruited new medical and paramedical staff.

The prevalence of HIV/AIDS was estimated at 3.2% in September 2008. The percentage of new HIV infections retreated from 3.4% in 2006 to 2.8% in 2008, particularly in the 15 to 24 age bracket. The infection rate among 18-month old children dropped from 16.1% in 2006 to 13.2% in 2007. The number of patients receiving antiretroviral treatment rose from 6 579 to 7 980 from 2006 to 2007, raising the coverage rate from 24% to 30.4%. The proportion of HIV-positive pregnant women receiving treatment rose from 1.8% in 2005 to 6.8% in 2007. Since November 2008, Togolese authorities have instituted free antiretroviral treatment. However, in public hospitals, medical care for HIV-positive people is still provided on a for-fee basis.

As part of the HIPC Initiative, the government adopted the PNDS and a medium-term human-resource development plan, with a cost analysis. To bolster healthcare staffing, 851 new employees were recruited through a competitive exam in 2009. In the education sector, the initiative plans a programme of initial and ongoing training of teachers. Thus 512 teachers were recruited and are being trained at the École nationale des instituteurs in Notsé and at the educational continuing training and research department (DIFOP) of Lomé. Continuing education modules were prepared, and the training of 2 000 school inspectors and head teachers was begun.