According to the first Economic Update for Togo, launched today by the World Bank, the crisis triggered by the global coronavirus pandemic has significantly impacted the Togolese economy and is expected to lead to a decline in growth from 5.3% in 2019 to 1% in 2020.
The report, Boosting Private Investment to Achieve Higher Growth and More Jobs, notes that air traffic restrictions, the closing of borders, social distancing and restricted movement measures (curfew, lockdown of certain cities), combined with the slowdown in growth experienced by Togo’s main trading partners, had a significant impact to economic activity. However, growth is expected to gradually return to pre-crisis levels beginning in 2022, fueled by government investment in infrastructure and an uptick in private investment, if the recent reforms aimed at improving the business climate are continued and expanded.
Thierry Yogo, Senior Economist at the World Bank in Togo and main author of the report, explained that “activities linked to production and sales, retail trade, construction, and tourism have been particularly hard hit by the social distancing and confinement measures adopted by the Togolese government to control the health crisis. The COVID-19 pandemic has had a significant negative impact on the private sector and could jeopardize achievement of the objectives of the national development program.”
To mitigate these risks, the authors of the report are calling on the government to lift the structural constraints to development of the private sector, which plays a key role in the national development plan and in the post-COVID-19 pandemic economic recovery.
This entails facilitating access to financing, improving the quality of electricity and telecommunications services (internet, mobile telephones) and reducing access costs, easing the tax burden on enterprises, and strengthening human capital.
Lastly, the report recommends accelerating digitization of the economy in order to keep boosting the private sector and growth while creating more productive jobs.
Hawa Cissé Wagué, the World Bank Resident Representative for Togo, stressed that “Continuing to rely on private investment as a driver for economic recovery will be crucial to strengthen Togo's resilience to address the economic and social vulnerabilities revealed by the coronavirus crisis.”