The board of directors of the International Monetary Fund (IMF) has completed the first review of the agreement under the Extended Credit Facility (ECF) for Togo.
It paves the way for an immediate disbursement of approximately $58.7 million for budgetary support.
This FEC agreement provides total funding of $390 million.
Approved on March 1, 2024, the agreement aims to help Togolese authorities deal with the after-effects of multiple shocks recorded since 2020, notably the COVID-19 pandemic and the rise in global prices of food and fuel.
Despite a difficult context, the authorities have managed to mitigate the impact of these crises on the economy and the population. However, these efforts have led to an increase in budget deficits and public debt.
The program supported by the IMF is structured around two main objectives: making growth more inclusive while strengthening debt sustainability and implementing structural reforms to support economic growth and limit financial risks, particularly in the sector. banking.
A favorable but fragile economic outlook
According to projections by IMF experts, the medium-term economic outlook for Togo remains generally positive, with robust growth.
In 2023, economic growth reached an estimated rate of 5.6%, and projections for 2024-2025 expect a rate of 5.3%, before stabilizing around 5.5% per year provided that no major shock occurs.
In terms of inflation, the efforts made to contain the rise in prices are starting to bear fruit. In October 2024, headline inflation decreased to 3.3%, while core inflation (which excludes food and transport prices) reduced to 2.2% (annual averages).
Despite these encouraging signs, the economic outlook remains marked by high risks. Terrorist attacks in the north of the country continue and appear to be intensifying, putting increased pressure on public spending, the Fund estimates.
Faced with these challenges, Lomé must make complex trade-offs: consolidate public finances to reduce the debt burden and support solid economic growth, in a context of limited budgetary margins.
The IMF reiterates its support for the program of the Togolese authorities, which are striving to strengthen economic resilience while ensuring inclusive growth.
The coming months will be decisive for the implementation of the necessary reforms to guarantee the viability of public finances and improve the living conditions of the Togolese populations, particularly the most vulnerable.
With this support from the IMF, Togo has a unique opportunity to continue its growth dynamic while addressing the security and economic challenges that persist.
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