The African Development Bank (AfDB) Group made good its commitment to support Togo's development efforts on Wednesday in Tunis where the Board of Directors of the Bank Group approved funding to the tune of 12.5 million Units of Account (UA*), about US$ 18.65 million, to help implement the country's Reform and Governance Support Programme (PARG).
The Funding, comprising a 10-million UA grant from the Bank Group's "Fragile States Facility" and a UA 2.5-million grant from the "African Food Crisis Response", will support the government's economic growth and poverty reduction policy by enhancing the efficient and transparent management of public resources.The program includes improving public finance management, strengthening of the public procurement system, improving the business climate, and improving support to mitigate the impact of the food crisis.
The PARG will be implemented in the form of balance of payments support, covering the period 2009-2010. The Programme is in line with the Bank's 2009-2010 Interim Country Strategy Paper (CSP) and will assist the Togolese government in its implementation of the country's Interim Poverty Reduction Strategy (I-PRSP).
In line with African Development Fund (ADF-XI) and Fragile States Facility (FSF) operational priorities, and discussions held with the government on the country's priorities, Bank support during the 2009-2010 interim period will mainly target the areas of governance and capacity building, and rehabilitation or reconstruction of basic infrastructure. The Bank will help the country to achieve the Highly Indebted Poor Country (HIPC) Initiative completion point in 2010 and create conducive conditions for large-scale project financing in Togo during ADF-XII replenishment.
The expected outcomes of the program are, basically, maintaining a stable macro-economic environment and creating an institutional and regulatory framework that promotes growth. More specifically, the PARG will help improve budget planning and allocation, transparency in public resource management, efficiency in the procurement system, competitiveness among businesses and better access to farm inputs.
Togo's external financing requirements for 2008-2010 are estimated at US$ 2.1 billion, or 75% of the Gross Domestic Product (GDP). About two-thirds of this amount will be used to settle 2008 arrears and help the country reach the HIPC initiative and the Multilateral Debt Reduction Initiative (MDRI) completion point in 2010. The country has reached an agreement on the payment of its arrears with the World Bank, the AfDB, the European Investment Bank and the International Fund for Agricultural Development (IFAD). Debt and arrears with other multilateral creditors will be renegotiated under the HIPC Initiative. The Paris Club granted an interim debt relief in June 2008, with plans to reschedule the bilateral debt on concessional terms.
The Bank's portfolio in Togo comprises only one active project, the Institutional Capacity Building Support Project (PARCI), approved in 2006 to the tune of UA 2.2 million. PARCI is designed to improve the service performance of the Ministry of Economy and Finance.