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Togo Country Risk Report 2019

Togo Country Risk Report 2019

Togo's political crisis will continue to have a negative effect on the economy by providing headwinds to private investment and government spending. However, the extent of the slowdown will blunted by continued engagement with bilateral and multilateral lenders and by the country's membership of the West African Monetary Union, which will prevent destabilising currency volatility.

Exports and private consumption will be the main drivers of economic growth as both reap the benefits of aggressive public investment in recent years. A large debt load means that the government will tighten the reins and government consumption and investment will play less of a role. Overall we are forecasting average real GDP growth of 4.5% over the coming decade.

We expect the authorities will run primary fiscal surpluses over the next ten years meaning a high government debt will fall slowly as a proportion of GDP. A high proportion of concessional lending in the public debt load will limit risks of a debt crisis in the meantime.

Togo's current account will remain in deficit over our forecast period owing to a large trade account shortfall. The net international investment position will move further into negative territory as a result as the country relies on external debt and foreign direct investment to cover import demand.

Togo's membership of the Union Economique et Monétaire Ouest Africaine will ensure that the country continues to enjoy a low and largely stable inflation rate. We forecast that it will average 2.8% over the next 10 years.

Togo's political crisis is likely to persist in the coming quarters with neither the opposition nor President Faure Gnassingbé likely to make significant concessions in the short-term. That said, regional mediation efforts are likely to prevent a complete collapse of social order.

Key Risks

Adverse weather conditions that affect crop production would be negative for private consumption and economic growth.

Lower-than-expected growth in neighbouring economies that leads to fewer imports passing through Togo would have a negative impact on the important freight transport sector.


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Stronger Agricultural Output And Growing Mining Capacity To Drive Growth In Togo
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Outlook On External Position
Structural Fiscal Position
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Long-Term Economic Outlook
Growth To Slow On Lower Public Investment
Political Outlook
Domestic Politics
Political Risk To Remain Elevated In Togo
Demographic Outlook
TABLE: POPULATION BY AGE GROUP
TABLE: POPULATION BY AGE GROUP, %
TABLE: POPULATION HEADLINE INDICATORS
TABLE: KEY POPULATION RATIOS
TABLE: URBAN/RURAL POPULATION AND LIFE EXPECTANCY
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.Togo Country Risk 2019ContentsGlobal Macro Outlook
Global Growth Deceleration, But Policy Increasingly Supportive
TABLE: GLOBAL MACROECONOMIC FORECASTS (2018-2023)
TABLE: DEVELOPED MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: TOGO – MACROECONOMIC DATA & FORECASTS

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