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Banking industry

IMF Approves Second Annual Loan for Togo's Economic Reform Program

Strategic Insights

— 2 min read

The International Monetary Fund (IMF) has approved a second annual loan for Togo under the Enhanced Structural Adjustment Facility (ESAF) worth special drawing rights (SDR) 21.7 million, approximately $32 million. This loan is part of Togo's 1995-96 economic reform program aimed at restoring sustained economic growth and achieving financial viability. The loan will be disbursed in two equal semiannual installments.

Togo adopted a comprehensive adjustment strategy in mid-1994, which led to a resurgence of economic activity. Real GDP growth was nearly 14 percent in 1994, following a contraction of 22 percent over the previous three years, and is projected to grow by 8.3 percent this year. Inflationary pressures subsided in late 1994, and inflation has been running at an annual rate of 6.5 percent during the first nine months of 1995.

Key Takeaways:

  • The IMF loan worth SDR 21.7 million ($32 million) will support Togo's 1995-96 economic reform program, aimed at achieving a real GDP growth rate of 6.5 percent and reducing inflation to 5 percent annually.
  • Togo's adjustment efforts aim at strengthening public finances and the balance of payments, and include measures to increase government revenue, restrain expenditure, and improve the structure of public expenditure.
  • Structural reforms under the program include the sale of government participation in nine companies, restructuring of the export crop marketing company OPAT, and sale of 40 percent of the government's share in the phosphate mining company OTP.
  • The authorities plan to eliminate price controls and address social costs by protecting vulnerable groups, promoting job creation, and strengthening health and education services.
  • Togo's economic and financial situation remains fragile, and further significant improvements are required to attain a sustainable position, with the rate of disbursement of external financing still subject to uncertainty.
  • The government will need to take additional measures to ensure rigorous implementation of the economic program.

Statistics:

  • Real GDP growth was 14 percent in 1994, following a contraction of 22 percent over the previous three years.
  • Projected real GDP growth for 1995 is 8.3 percent, driven by buoyant performance in the mining and manufacturing sectors.
  • Inflation has been running at an annual rate of 6.5 percent during the first nine months of 1995.
  • Togo's quota in the IMF is SDR 54.3 million (approximately $81 million).
  • Outstanding use of IMF credit currently totals SDR 61 million (approximately $90 million).
  • Estimated external current account balance, excluding grants, for 1995 is $13.5 million.

Sources:

  • Togolese authorities
  • IMF staff estimates and projections
  • International Monetary Fund (IMF) External Relations Department
  • IMF staff reports and projections
  • Togolese government publications

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