TOGO

RISK RATING
Moderate
Default High Risk Score 3.50
Normal Average 2.53
Weighted Average 2.19
RISK RATING HISTORY
RISK RATING SCALE

Risk Rating Scale

Severe: 8.0 to 10
High: 6.0 to 7.9
Elevated: 4.0 to 5.9
Moderate: 2.0 to 3.9
Low: 0.0 to 1.9
EXCHANGE RATE
Country Outlook

Togo’s president is seeking to appease some opposition leaders through a renewed national dialogue to assure his own political legitimacy. However, the risk of protests will remain elevated even during the coronavirus crisis, as the economic outlook deteriorates. Togo has attracted significant foreign investment over the past decade and some projects are now at risk. Low regional and global demand for Togo’s commodities including phosphates, cement, cocoa, cotton, and coffee will hurt government revenues and increase debt servicing risks. Togo will remain reliant on external financing for public investment in urban development and major construction projects, which will be funded in part by development aid and concessional financing.

  • Opposition parties seek political concessions in exchange for the president‚Äôs search for legitimacy. President Faure Gnassingb√© won re-election with 71 percent of the vote in the February 2020 presidential elections that lacked credibility. President Gnassingb√© is likely to extend his rule and his family‚Äôs dynasty that began when his father took power in a 1967 coup. This has increasingly prompted public dissatisfaction, with large protests against Gnassingb√©‚Äôs extended rule taking place since 2017. As a result, the political and security climate remains vulnerable to potential mass protests and western criticism of repression of political rights. Togo‚Äôs president will seek the opposition‚Äôs sanction of the vote for a rapprochement with western investment partners following several years of violent protests and political crisis.
  • Opposition protests will continue to be hindered by coronavirus restrictions, although a deteriorating economic outlook is likely to motivate fresh demonstrations. The breakdown of negotiations between the government and the opposition will likely see the latter continue to organise anti-government protests and associated strike action on a frequent basis. Tensions are likely to heighten around the upcoming regional elections. The most significant of these gatherings will remain centred on the capital, Lom√©, and the urban centres of cities of Bafilo (Kara region), Mango (Savanes region), and Sokode (Centrale region). These protests will occur amid a ban on such events, which will continue to prompt the forcible intervention of security forces. Any fresh protests will distract intelligence and security services from the threat of Islamist militancy and terrorism, as a growing number of militants cross into northern Togo from the Sahel.
  • Togo‚Äôs economy is set to recover gradually in 2021 by depending on private sector investment. The country’s solid economic performance and the fiscal consolidation over past years should contribute to this expected recovery. Budgetary pressures have been eased somewhat through the provision of assistance by Togo‚Äôs development partners. Togo has also been granted debt service relief by the IMF, yet Togo‚Äôs public debt mostly domestic. The economic environment remains highly vulnerable to potential internal and external shocks, especially the trajectory of the pandemic. The West African Economic and Monetary Union (WAEMU) acts as a safety net protecting the country with the regional stock market, solid reserves, and the possibility to use part of the cash liquidity the country has at the BCEAO to plug the budgetary deficit.
CUMULATIVE AND DAILY COVID-19 INFECTIONS AND DEATH RATE
INTERNATIONAL MONETARY FUND | DATAMAPPER
Risk Perils
Political Instability
2.0
Expropriation, Nationalisation, Confiscation & Deprivation
1.5
Contract Frustration & Breach
2.0
Taxation
2.0
Bribery & Corruption
3.0
Regulatory Burden
2.8
Strikes, Riots & Civil Commotion
3.0
Security
2.5
Sovereign Default
3.0
Economic Volatiliy
3.5

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