- IMF Staff and the Togolese authorities have reached staff-level agreement on economic policies and reforms to conclude the second review of the Extended Credit Facility (ECF)-supported program. Once the review is completed by the IMF Executive Board, Togo will have access to SDR 44.0 million (about US$58.4 million) in financing.
- The IMF-supported program is broadly on track, with robust growth and moderating inflation. All quantitative targets and all structural benchmarks at end-December 2024 met, except for the quantitative performance criterion on the fiscal balance.
- The authorities have reaffirmed their commitment to implementing sound policies, including by raising fiscal revenue, containing debt accumulation, and making growth more inclusive, as well as enacting structural reforms to enhance public financial management, strengthen the financial sector, and enhance governance.
Washington, DC: An International Monetary Fund (IMF) staff team, led by Hans Weisfeld held meetings with the Togolese authorities in Lomé and Washington in recent months to discuss progress under the authorities' economic program supported by an IMF Extended Credit Facility (ECF) arrangement.
At the conclusion of the discussions, Mr. Weisfeld issued the following statement:
"The mission has had constructive and productive discussions with the Togolese authorities and commended them on the sustained progress in advancing reforms. A staff-level agreement was reached on all policies, including key parameters of the 2025 fiscal framework and reform measures going forward, in line with the program's objectives.
"Economic growth reached an estimated 5.3 percent in 2024 and is projected at 5.2 percent in 2025 and around 5.5 percent per year thereafter, barring major adverse shocks. Inflation has continued to slow, reaching 2.6 percent in April 2025 (annual average).
"The IMF-supported government economic policy program is broadly on track. The authorities met all quantitative performance criteria for end-2024 except the criterion on the fiscal balance. Tax revenue in 2024 increased as planned, while non-tax revenue even exceeded expectations. At the same time, financing support provided to local communities affected by floods and the purchase of a large stock of fertilizers that are being made available to farmers at subsidized prices meant that government debt rose more quickly than planned, slowing progress toward stronger debt sustainability. To help the public understand budget execution and the drivers of debt, the authorities have published an explanation of fiscal developments in 2024 . This is a very welcome step.
"At the same time, the authorities made good progress on structural reforms. They met both outstanding structural benchmarks set for end-2024 by (i) strengthening the budgetary risk analysis report accompanying the draft annual budgets; and (ii) injecting substantial funds into the remaining public bank to bring its regulatory capital in line with the requirements set by the regional banking regulator. The authorities also aim to continue to enhance governance. They (i) are working on strengthening the public procurement legal framework to require the publication of the names of beneficial owners of companies awarded procurement contracts; and (ii) have invited an IMF Governance Diagnostic Assessment and committed to publishing its findings.
"It will be very important to make good progress on the planned growth-friendly and socially responsible fiscal consolidation to reinforce debt sustainability while continuing reforms to enhance public financial management, strengthen the financial sector, and enhance governance.
"The IMF approved the ECF arrangement in March 2024 to help the authorities address the legacies of shocks seen since 2020, notably the COVID pandemic and the increase in global food and fuel prices. The Togolese authorities were able to lessen the impacts of these shocks on the Togolese economy and population, but this came at the price of large fiscal deficits and a rapidly rising debt burden. The IMF-supported government program aims to (i) make growth more inclusive while strengthening debt sustainability, and (ii) conduct structural reforms to support growth and limit fiscal and financial sector risks. The IMF provides financing of SDR 293.60 million (about US$ 390 million) on favorable terms to Togo through the ECF arrangement. The IMF Executive Board completed the First Review of the program in December 2024.
The staff team looks forward to continuing the fruitful dialogue with the Togolese authorities and stakeholders in the period ahead, including in the context of the mission for the Third Review in the second half of 2025."
