2019 Index of Economic Freedom

Togo

overall score50.3
world rank158
Rule of Law

Property Rights35.5

Government Integrity28.1

Judicial Effectiveness29.6

Government Size

Government Spending77.0

Tax Burden67.8

Fiscal Health24.5

Regulatory Efficiency

Business Freedom50.4

Labor Freedom46.7

Monetary Freedom79.1

Open Markets

Trade Freedom69.4

Investment Freedom65.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 7.8 million
  • GDP (PPP):
    • $12.9 billion
    • 4.4% growth
    • 5.5% 5-year compound annual growth
    • $1,659 per capita
  • Unemployment:
    • 1.8%
  • Inflation (CPI):
    • -0.7%
  • FDI Inflow:
    • $145.6 million

Togo’s economic freedom score is 50.3, making its economy the 158th freest in the 2019 Index. Its overall score has increased by 2.5 points, led by a big improvement in fiscal health and rising scores for the tax burden and property rights. Togo is ranked 35th among 47 countries in the Sub-Saharan Africa region, and its overall score is below the regional and world averages.

Despite growing political volatility, Togo has enjoyed steady growth as a result of government efforts to modernize the banking, electricity, and transportation sectors and other commercial infrastructure. Corporate taxes have been cut, and some public enterprises have been divested. However, an inefficient business environment and weak public administration continue to undermine overall competitiveness and drive a significant portion of economic activity into the informal sector. Foreign direct investment is allowed only in certain sectors, and regulatory and judicial systems are vulnerable to corruption and political interference.

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Background

French Togoland became Togo in 1960. General Gnassingbé Eyadema, installed as military ruler in 1967, remained in power for almost four decades. Faure Gnassingbé, appointed to the presidency by the military in 2005 following the death of his father, was elected to that office later that year. His Union for the Republic dominates the political landscape. In 2015, he secured a third five-year term. Protests demanding presidential term limits continued in 2018. The economy depends heavily on both commercial and subsistence agriculture, which employs about 60 percent of the labor force. Togo has one of West Africa’s few natural deep-water ports, and its secure territorial waters have become a relatively safe zone for international shippers.

Rule of LawView Methodology

Property Rights 35.5 Create a Graph using this measurement

Government Integrity 28.1 Create a Graph using this measurement

Judicial Effectiveness 29.6 Create a Graph using this measurement

Enforcement of contracts is difficult. Protection of real property is also difficult because most land does not have a clear title. The statutes governing property are poorly defined mixtures of civil code and traditional laws, often leading to legal fights over inheritances. The opaque judicial system lacks resources and is heavily influenced by the presidency. Graft and corruption remain serious problems.

Government SizeView Methodology

The top individual income tax rate is 45 percent, and the top corporate tax rate is 27 percent. Other taxes include value-added and property taxes. The overall tax burden equals 21.5 percent of total domestic income. Over the past three years, government spending has amounted to 27.7 percent of the country’s output (GDP), and budget deficits have averaged 6.3 percent of GDP. Public debt is equivalent to 78.6 percent of GDP.

Regulatory EfficiencyView Methodology

Recent reforms to enhance the entrepreneurial environment have reduced the time and cost involved in launching a business, but weak public administration continues to undermine overall efficiency. The labor market lacks dynamism, and informal labor activity remains substantial. Fuel subsidies have been reduced, but they remain a burden on the budget and are expected to rise in the medium term as international oil prices increase.

Open MarketsView Methodology

The combined value of exports and imports is equal to 100.0 percent of GDP. The average applied tariff rate is 10.3 percent. Nontariff barriers persist, although the time required for border compliance for both exporting and importing has been reduced. Foreign ownership of land is restricted, but foreign and domestic investors are generally treated equally under the law. About 46 percent of adult Togolese have a bank account.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius73-2.1
2Rwanda71.12.0
3Botswana69.5-0.4
4Cabo Verde63.13.1
5Côte d'Ivoire 62.40.4
6Seychelles61.4-0.2
7Tanzania60.20.3
8Uganda59.7-2.3
9Burkina Faso59.4-0.6
10Namibia58.70.2
11South Africa58.3-4.7
12Mali58.10.5
13Ghana57.51.5
14Nigeria57.3-1.2
15Madagascar56.6-0.2
16Senegal56.30.6
17Gabon56.3-1.7
18Mauritania55.71.7
19Guinea55.73.5
20Comoros55.4-0.8
21Benin55.3-1.4
22Kenya55.10.4
23Eswatini54.7-1.2
24São Tomé and Príncipe 540.4
25Guinea-Bissau54-2.9
26Ethiopia53.60.8
27Zambia53.6-0.7
28Lesotho53.1-0.8
29Cameroon52.40.5
30The Gambia52.40.1
31Niger51.62.1
32Malawi51.4-0.6
33Angola50.62.0
34Democratic Republic of Congo50.3-1.8
35Togo50.32.5
36Chad49.90.6
37Liberia49.7-1.2
38Central African Republic49.1-0.1
39Burundi48.9-2.0
40Mozambique 48.62.3
41Sudan47.7-1.7
42Sierra Leone47.5-4.3
43Djibouti47.12.0
44Equatorial Guinea41-1.0
45Zimbabwe40.4-3.6
46Republic of Congo 39.70.8
47Eritrea38.9-2.8
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