The economic recovery in the West African country of Togo is firming up, with growth estimated to have accelerated from 4.9 percent in 2018 to 5.3 percent in 2019, and forecast to reach 5.5 percent in 2020, the International Monetary Fund (IMF) said on Wednesday.
IMF said the Togolese authorities have implemented a significant reduction of the budget deficit and public debt as well as strong structural reforms, while the reforms in the financial sector are progressing and discussions are underway.
The assessment was made public in Washington D.C. after an IMF team led by Mr. Ivohasina Fizara Razafimahefa completed its mission to Lomé between December 4 and December 17, 2019, to discuss the sixth and final review of the implementation of a loan IMF granted Togo under an Extended Credit Facility (ECF).
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An extended credit facility allows the borrowing country to take out money over an extended period of time rather than reapplying for a loan each time it needs money. In effect, a credit facility lets a country take out an umbrella loan for generating capital over an extended period of time.
“The mission had constructive and productive discussions with the Togolese authorities and commended them on the sustained progress in advancing reforms and pursuing with sound economic policies. Following the finalization of discussions, the IMF Executive Board could consider the conclusion of the sixth ECF review,” said Mr. Razafimahefa who led the mission to Togo.
He added: “The economic recovery is firming up. Economic growth is estimated to accelerate from 4.9 percent in 2018 to 5.3 percent in 2019 and 5.5 percent in 2020, driven primarily by domestic demand while some export sectors are showing signs of weaknesses. Credit to the private sector expanded by 3.6 percent (year-on-year) and inflation stood at 0.4 percent (year-on-year) at end-September 2019.
“The fiscal consolidation, which started in 2017, remains sustained with the overall fiscal deficit estimated at 2.2 percent of GDP at end-September 2019. Revenue collections were on target, with strong customs revenue collections compensating for weaknesses in domestic tax collections. Overall expenditure was less than projected. Total public debt that amounted to 81 percent of GDP at end-2016 is decreasing and projected to decline to 70 percent of GDP by end-2019. It would be essential to persevere in fiscal consolidation to further reduce debt vulnerabilities”.
Razafimahefa said the Togolese authorities have implemented strong structural reforms.
“Several revenue administration measures have been implemented, including the creation and harmonization of tax identification numbers, tele-procedures to reduce compliance costs, withholding and provisional deposits to secure revenue collections, internal controls against corruption, and reduction of tax exemptions,” he said.