Evaluation and Strategy for Development Financing in Togo

Togo's evaluation and strategy for development financingis designed to create a comprehensive approach for mobilizing public and private, domestic and international financial resources necessary to achieve national development objectives and the Sustainable Development Goals (SDGs). The strategy is a result of a comprehensive Development Finance Assessment (DFA) designed to improve financing for the Government Roadmap 2025 and address COVID-19 consequences, with an estimated budget envelope of 2,800 to 3,400 billion FCFA where 50-52% will be carried by the private sector.

The strategy addresses critical financing gaps across multiple sources. For domestic public financing, Togo faces challenges with fiscal pressure at 12.20% in 2020, below the regional target of 20% and West African Economic and Monetary Union (WAEMU) average of 15.8%, with a target of 15.1% by 2025. The strategy proposes strengthening tax collection, optimizing fiscal expenditures estimated at 93.6 billion FCFA (17.6% of fiscal revenues), exploring green taxation, and improving non-fiscal revenue mobilization. Public debt management focuses on transitioning from costly domestic debt (5.9% average rate) to concessional external financing (1.7% average rate) while exploring debt-for-nature swaps to create fiscal space.

For external financing, the strategy leverages Official Development Assistance of 785.95 million USD in 2020 and promotes innovative mechanisms including debt-for-nature exchanges and optimization of multilateral and bilateral funding sources. Private sector financing development targets long-term savings mobilization, addressing the dominance of short-term credit where 53% of new credits in 2020 had maturities under one year, and combating illicit financial flows estimated at 1.048 billion USD annually. It also prioritizes anti-corruption measures, improving Togo's ranking from 128th globally in 2021, and aligning budget processes with national development priorities and SDGs through citizen participation and parliamentary oversight mechanisms. The strategy emphasizes diaspora remittances representing 6% of GDP (510 million USD in 2020) and strengthening Public-Private Partnerships through the legal framework established in 2021.