Outlook for 2011-12

Re-elected for a second five-year term as president in March 2010, Faure Gnassingbé will remain secure in office over the outlook period. Economic policy will be guided by a programme of reform supported by the IMF. Local elections in 2011 and a legislative election in 2012 will indicate the level of popular support for the historic reconciliation between the regime and the main opposition party, Union des forces de changement. Real GDP growth is forecast to accelerate to 3.6% in 2011 and 3.9% in 2012, backed by a rising level of foreign investment and assistance, investment in infrastructure and the government's programme of structural and financial reform. A wider trade deficit, due to increasing demand for inputs for development projects, will cause the current-account deficit to widen to around 8% of GDP in 2011; it should narrow to 7% of GDP in 2012 as import growth slows.

The political scene

New opposition protests have increased political tension; the protests focus on proposed legislation governing political demonstrations, although it was drawn up following best democratic practice. There has been a minor government reshuffle, partly involving the military men in the cabinet. Several political parties, though not the hardline oppositionist ANC, have signed a new electoral code of conduct drafted with the assistance of several international bodies.

Economic policy

The IMF has published details of its fifth review of Togo's performance under the extended credit facility, commending the government's implementation of, and commitment to, the reform programme. The government will maintain a modest fiscal stimulus in 2011, with the IMF's approval. The government has launched its second-ever bond on the regional market; the five-year bond is worth CFAfr47bn (US$94m). The deadline for final bids in the privatisation of four state-owned banks, delayed until April 2011, may be extended further.

The domestic economy

Rising food and energy prices pushed annual inflation to 4.6% in January. Work has begun on building a third quay at the Port of Lomé, as part of a US$600m development project. Work is due to begin on a second container terminal at Lomé in July 2011.

Foreign trade and payments

According to revised balance-of-payments figures from the IMF, the current-account deficit widened to 7.7% of GDP in 2010, from 7.1% of GDP in 2009, as exports stagnated and imports rose. New joint border posts between Togo and its neighbours will facilitate regional trade.