2016 Index of Economic Freedom

Togo

overall score53.6
world rank135
Rule of Law

Property Rights30.0

Freedom From Corruption29.0

Limited Government

Government Spending80.4

Fiscal Freedom68.7

Regulatory Efficiency

Business Freedom51.4

Labor Freedom46.2

Monetary Freedom79.5

Open Markets

Trade Freedom71.2

Investment Freedom50.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 7.0 million
  • GDP (PPP):
    • $10.1 billion
    • 5.2% growth
    • 5.1% 5-year compound annual growth
    • $1,450 per capita
  • Unemployment:
    • 6.9%
  • Inflation (CPI):
    • 0.1%
  • FDI Inflow:
    • $292.1 million
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Increased investment in infrastructure has encouraged economic growth in Togo. In 2014, the federal government reduced the fees businesses pay to register with the tax authority and implemented an electronic customs system to simplify the importing and exporting process.

Economic Freedom Snapshot

  • 2016 Economic Freedom Score: 53.6 (up 0.6 point)
  • Economic Freedom Status: Mostly Unfree
  • Global Ranking: 135th
  • Regional Ranking: 29th in Sub-Saharan Africa
  • Notable Successes: Management of Public Spending and Monetary Freedom
  • Concerns: Rule of Law and Open Markets
  • Overall Score Change Since 2012: +5.3

Enforcement of contracts and protection of property is still weak due to Togo’s inefficient and corrupt judicial system. Fiscal reforms are needed to ensure prudent, sustainable, and efficient public spending.

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Background

Togo’s military appointed Faure Gnassingbé to the presidency in 2005 following the death of his father, who had ruled for nearly 40 years. Under pressure from the Economic Community of West African States and the African Union, he stepped down two months later. Gnassingbé won the subsequent presidential election, sparking deadly clashes between protesters and the security services, and in 2012 replaced the ruling Rally of the Togolese People party with the Union for the Republic party, which still dominates the political landscape. In April 2015, Gnassingbé secured a third five-year term. Togo is one of the world’s largest producers of phosphate. Cocoa, coffee, and cotton account for approximately 40 percent of export earnings. New limestone mines began operating in 2015. With one of West Africa’s few natural deep-water ports, Togo’s secure territorial waters have become a relatively safe zone for international shippers amid the regional surge in maritime piracy.

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

In November 2014, the government introduced new anti-corruption legislation, but graft and corruption remain serious problems. The judicial system lacks resources and is heavily influenced by the presidency. Contracts are difficult to enforce. Protection of real property is frequently contentious, as inheritance laws are a poorly defined mixture of civil code and traditional laws. Inheritances are frequently challenged.

Limited GovernmentView Methodology

The top individual income tax rate is 45 percent, and the top corporate tax rate is 27 percent. Other taxes include a value-added tax and a property tax. The overall tax burden equals 19.5 percent of total domestic income. Government spending amounts to 25.5 percent of gross domestic output. The budget deficit is about 5 percent of GDP, and public debt now equals over 50 percent of annual domestic product.

Regulatory EfficiencyView Methodology

Regulatory reforms to enhance the entrepreneurial environment have been undertaken, but the overall business framework remains burdensome. The labor market is underdeveloped, and informal labor activity remains substantial. The government used its IMF 2013–2017 poverty reduction strategy paper as justification for increased social spending and subsidies for transport and energy infrastructure.

Open MarketsView Methodology

Togo’s average tariff rate is 9.4 percent. Togo is a member of the West African Economic and Monetary Union. State-owned enterprises operate in several sectors of the economy. Foreign and domestic investors are generally treated equally under the law. Capital transactions are subject to some controls or government approval. The underdeveloped banking system lacks liquidity.

Country's Score Over Time

Bar Graph of Togo Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Togo to other economic country groups Download Charts

Regional Ranking

rank country overall change
1Mauritius74.7-1.7
2Botswana71.11.3
3Cabo Verde66.50.1
4Rwanda63.1-1.7
5Ghana630.0
6Seychelles62.24.7
7South Africa61.9-0.7
8Namibia61.92.3
9Madagascar61.1-0.6
10Côte d'Ivoire 601.5
11Swaziland59.7-0.2
12Benin59.30.5
13Uganda59.3-0.4
14Burkina Faso59.10.5
15Gabon590.7
16Zambia58.80.1
17Tanzania58.51.0
18Senegal58.10.3
19Kenya57.51.9
20Nigeria57.51.9
21The Gambia57.1-0.4
22São Tomé and Príncipe 56.73.4
23Mali56.50.1
24Djibouti56-1.5
25Mauritania54.81.5
26Niger54.3-0.3
27Cameroon54.22.3
28Burundi53.90.2
29Togo53.60.6
30Guinea53.31.2
31Mozambique 53.2-1.6
32Comoros52.40.3
33Sierra Leone52.30.6
34Liberia52.2-0.5
35Guinea-Bissau51.8-0.2
36Malawi51.8-3.0
37Ethiopia51.50.0
38Lesotho50.61.0
39Angola48.91.0
40Democratic Republic of Congo46.41.4
41Chad46.30.4
42Central African Republic45.2-0.7
43Equatorial Guinea43.73.3
44Republic of Congo 42.80.1
45Eritrea42.73.8
46Zimbabwe38.20.6
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