Togo returns to form in the area of taxation. The World Bank estimates that pleasing the tax man in Togo requires a total of 53 payments over the course of a year which, in turn, takes up to 270 hours to complete and can consume up to 50.8% of a company’s profits. Accordingly, Togo’s tax burden is ranked 157^th out of 183 nations, making it one of the very worst in the world in this area.

When it comes to engaging in cross-border trade, however, Togo improves a great deal. In Togo, to import goods into the country one is required to have eight documents for customs officials to inspect. On average, it takes a total of 28 days to import goods into Togo with the cost amounting to $963 (excluding tariffs) per container shipped into the country.

The cost to export goods is similar as Togo requires six documents to be inspected by customs’ officials while the total cost (excluding taxes) is $940 per container with delivery taking up to 24 days from point of origin. Compared to global averages this gives Togo a ranking of 93^rd out of 183 on ease of engaging in cross-border trade.

Togo once again does very poorly when it comes to contract enforcement, where it ranks 151^st out of 183 countries ranked on this issue by the Bank. On average, reports World Bank analysts, it takes a total of 41 legal procedures to take a contract from dispute to resolution, at the cost of 588 days spent in court or otherwise attending to legal issues. The financial cost of pursing a contract claim, says the Bank, typically accounts for 47.5-percent of the value of the claim.

Finally, in terms of closing a business, Togo ranks 84^th out of 183 countries measured.  Typically it takes three years to close a business at a cost of 15-percent of the cost of an estate with an estimated recovery rate of 30.6 cents on the dollar.

Table 1 presents a summary of these rankings as well as Togo’s overall ease-of-doing business rating.  As one can see, Togo has two bright spots when it comes to business.  First, cross-border trade is only moderately difficult when compared to other places in Africa while closing a business is also relatively straightforward.  However, in all other areas Togo does poorly compared to other African states.

Table 1:

World Bank Ease of Doing Business

Assessment and Rankings: Togo

 

Prospects

Like much of the rest of Africa, Togo’s primary economic sector remains subsistence agriculture which employs the majority of the population and makes up 42% of the country’s GDP.  Coffee and cocoa are cash crops and have been cultivated since the colonial era, but more recently cotton has also begun to be produced.  Togo’s tropical climate means that much more could be produced if agricultural productivity could be improved, but unfortunately the continuing of subsistence farming soaks still soaks up too much of both land and labor.

In terms of industry, the major sector of note is phosphate mining, of which the country produces around 1.0 million metric tons a year in product off a reserve base of approximately 60 million metric tons.  Additionally, large deposits of limestone, marble, iron, and magnesium are also to be found so far commercial exploitation of these resources has been minimal due.  Outside of mining there is some light manufacturing of consumables for local consumption while in the service sector the country has potential as a transport and postal hub.

Figure 3:

 Togo Economic Growth,

Percent Increase, 2003 – 2013

Togo’s growth can best be described as slow and steady and heavily dependent upon good weather to sustain the country’s agricultural output.  However, being sandwiched between Ghana and Nigeria means it is potentially well placed to serve as a communications hub and, indeed, as growth and trade have picked up in West Africa in recent years Togo’s economy has grown along with it.  Unfortunately, several problems remain.

Among them is the continuing corruption that impacts the country and largely stems from the lack of democratic accountability that is associated with the incumbent president and his regime.  Clearly further reform efforts need to be made and the costs associated with doing business in Togo that are documented above need to come down significantly.  This is unlikely though given the present state of politics there and so the country is likely to poke along, making the best of its situation, for some time to come.

Jeffrey Cavanaugh holds a Ph.D. in political science with a specialization in international relations from the University of Illinois at Urbana-Champaign. Formerly an assistant professor of political science and public administration at Mississippi State University, he writes on global affairs and international economics for AFK Insider, Mint Press News and BAM South.