2015 Index of Economic Freedom

Togo

overall score53.0
world rank138
Rule of Law

Property Rights30.0

Freedom From Corruption29.0

Limited Government

Government Spending78.1

Fiscal Freedom69.7

Regulatory Efficiency

Business Freedom51.9

Labor Freedom43.4

Monetary Freedom80.4

Open Markets

Trade Freedom67.8

Investment Freedom50.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 6.8 million
  • GDP (PPP):
    • $7.4 billion
    • 5.6% growth
    • 4.8% 5-year compound annual growth
    • $1,084 per capita
  • Unemployment:
    • 8.5%
  • Inflation (CPI):
    • 2.0%
  • FDI Inflow:
    • $84.2 million
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Togo’s economic freedom score is 53.0, making its economy the 138th freest in the 2015 Index. Its score is up by 3.1 points from last year, reflecting improvements in six of the 10 economic freedoms, including investment freedom, business freedom, freedom from corruption, and trade freedom. Togo is ranked 30th out of 46 countries in the Sub-Saharan Africa region, and its overall score is well below the world and regional averages.

Steady improvements in economic freedom have boosted Togo from the “repressed” category for the first time, and it has recorded its highest score ever in the 2015 Index. Over the past five years, economic freedom in Togo has advanced by 3.9 points, with relatively broad-based improvements led by gains of 25 points in investment freedom and 15 points in business freedom.

Togo has one of West Africa’s largest natural harbors, but its institutional framework is not fully consistent with the freer standards expected in the international marketplace. The rule of law remains weakly enforced, and corruption is prevalent. Rigid and inefficient business regulations encourage the use of graft to expedite bureaucratic delays.

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Background

The military appointed Faure Gnassingbé to the presidency in 2005 following the death of his father. Faced with sanctions by the Economic Community of West African States and the African Union, he stepped down two months later and called for an election, which he won despite electoral irregularities. Gnassingbé was re-elected in 2010, and his Union of Forces for Change won a majority of seats in flawed parliamentary elections in 2013. Togo is the world’s fourth-largest producer of phosphate. Cocoa, coffee, and cotton generate about 40 percent of export earnings. With West Africa’s only deep-water port, its secure territorial waters have become a relatively safe zone for international shippers amid the regional surge in maritime piracy. Togo remains dependent on foreign assistance and continues to work on International Monetary Fund–designed reforms.

Rule of LawView Methodology

Property Rights 30.0 Create a Graph using this measurement

Freedom From Corruption 29.0 Create a Graph using this measurement

Although the government has taken some steps to reduce graft, it is still common practice to provide cash or other gifts to expedite business transactions and shorten delays for obtaining registrations, permits, and licenses. The judicial system lacks resources and is heavily influenced by the presidency. Private property is not well protected, and enforcement of contracts is difficult.

Limited GovernmentView Methodology

Togo’s top individual income tax rate is 45 percent, and its top corporate tax rate is 27 percent. Other taxes include a value-added tax and a property tax. The overall tax burden equals 16.5 percent of the domestic economy, and government expenditures amount to 27 percent of domestic production. Public debt is equivalent to 43 percent of gross domestic product.

Regulatory EfficiencyView Methodology

Togo lags behind other developing countries in easing regulatory constraints. The process for launching a business has been streamlined, but getting necessary licenses takes over five months. The labor market remains underdeveloped, and the informal sector employs much of the workforce. In 2013, the IMF recommended that Togo reduce fuel subsidies to allow for higher social and infrastructure spending.

Open MarketsView Methodology

The average tariff rate is 11.1 percent. Togo adopted a new customs code in 2014 and is implementing a single window to facilitate trade. Foreign and domestic investors are generally treated equally under the investment code. The underdeveloped legal infrastructure impedes the development of a modern financial sector. Much of the population operates outside of the formal banking sector.

Country's Score Over Time

Bar Graph of Togo Economic Freedom Scores Over a Time Period

Country Comparisons

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Regional Ranking

rank country overall change
1Mauritius76.4-0.1
2Botswana69.8-2.2
3Cabo Verde66.40.3
4Rwanda64.80.1
5Ghana63-1.2
6South Africa62.60.1
7Madagascar61.70.0
8Swaziland59.9-1.3
9Uganda59.7-0.2
10Namibia59.60.2
11Benin58.81.7
12Zambia58.7-1.7
13Burkina Faso58.6-0.3
14Côte d'Ivoire 58.50.8
15Gabon58.30.5
16Senegal57.82.4
17Tanzania57.5-0.3
18Djibouti57.51.6
19The Gambia57.5-2.0
20Seychelles57.51.3
21Mali56.40.9
22Nigeria55.61.3
23Kenya55.6-1.5
24Mozambique 54.8-0.2
25Malawi54.8-0.6
26Niger54.6-0.5
27Burundi53.72.3
28Mauritania53.30.1
29São Tomé and Príncipe 53.34.5
30Togo533.1
31Liberia52.70.3
32Comoros52.10.7
33Guinea52.1-1.4
34Guinea-Bissau520.7
35Cameroon51.9-0.7
36Sierra Leone51.71.2
37Ethiopia51.51.5
38Lesotho49.60.1
39Angola47.90.2
40Chad45.91.4
41Central African Republic45.9-0.8
42Democratic Republic of Congo454.4
43Republic of Congo 42.7-1.0
44Equatorial Guinea40.4-4.0
45Eritrea38.90.4
46Zimbabwe37.62.1
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