2021 Investment Climate Statements: Togo

Policies Towards Foreign Direct Investment

Attracting foreign direct investment (FDI) is a priority for Togo. The new Ministry of Investment Promotion created in November 2020 serves as an interface for potential investors, allowing them to target investment sectors and provide priority projects. Although the government was unable to host high-profile international events to showcase its economic reforms and infrastructure investments as in previous years due to COVID-19, government officials have made many trips abroad (including to Germany, France, and Russia) to promote Togo as a place to invest. Notably, Dangote Industries  signed an agreement in November 2019 for a $2 billion phosphate fertilizer project. The government hopes that its strategic focus on improving the business environment will facilitate an increase in FDI in the coming years. Investment opportunities are available in transportation, logistics, agribusiness, energy, banking, and mining.

Togo does not have laws or practices that discriminate against foreign investors. The Investment Code, adopted in June 2019, prescribes equal treatment for Togolese and foreign businesses and investors; free management and circulation of capital for foreign investors; respect of private property; protection of private investment against expropriation; and investment dispute resolution regulation. The code meets West African Economic and Monetary Union (WAEMU) standards.

As an Investment Holding Company, Togo Invest Corporation focuses on investments involving the government through Public-Private-Partnerships. Although Togo prioritizes investment retention, the government does not maintain a formal dialogue channel with investors.

Limits on Foreign Control and Right to Private Ownership and Establishment

There is a right for foreign and domestic private entities to establish and own business enterprises and engage in all forms of remunerative activities. The foreign investor can also create a wholly owned subsidiary. It has no obligation to associate itself with a local investor. This right is contained in the Investment Code “le Code des Investissements,” adopted June 17, 2019, and there are no general limits on foreign ownership or control. Section 3 of the Investment Code states that any company established in the Togolese Republic freely determines its production and marketing policy, in compliance with the laws and regulations in force in the Togolese Republic. Additionally, there are no formal investment approval mechanisms in place for inbound foreign investment nor rules, restrictions, limitations, or requirements applied to private investments.

Other Investment Policy Reviews

Togo conducted a trade policy review through the World Trade Organization (WTO) in October 2017. A link to the report can be found at: https://www.wto.org/english/tratop_e/tpr_e/tp366_e.htm 

Business Facilitation

Over the last decade, Togo has significantly reduced the costs and procedures required to establish a business. In 2013, Togo established a center for starting new businesses – the “Centre de Formalité des Entreprises” that manages new business registration with an online business registration process. It only takes seven hours to register a company: https://www.cfetogo.org/eentreprise . In 2014, Togo made starting a business easier by permitting the Centre de Formalité des Entreprises to publish notices of incorporation, as well as eliminating the requirement to obtain an economic operator card. The World Bank Doing Business Report 2020 places Togo at 15 of 190 for the “Starting a Business” indicator, in comparison to 74 of 190 in 2019. The World Bank announced it will publish the Doing Business Report 2021 in mid-2021, incorporating data corrections for several previous reports (the World Bank announcement noted that Togo’s previous reports are unaffected).

Togo has enacted reforms to improve the process for obtaining construction permits. First, Togo removed a cumbersome and costly bureaucratic hurdle by eliminating the requirement of providing a certificate of registration from the National Association of Architects as a condition precedent to receiving a construction permit. Second, Togo has streamlined the entire procedure by establishing a “One-Stop Shop” for property transactions (called the Guichet Unique Foncier) at the Togolese Revenue Office (OTR). This “One-Stop Shop” within the OTR allows applicants to drop off their applications and retrieve their permits in one place, thus eliminating the need to visit multiple administrative offices to process paperwork.

The government created a Business Climate Unit in the Presidency in late 2017. The unit is committed to improving operating conditions for business, especially young entrepreneurs and women.

The creation of two commercial courts in Lomé and Kara favors private investors as these legal authorities allow for greater transparency in the treatment of commercial disputes.

Outward Investment

Togo does not promote outward investment, nor does it restrict domestic investors from investing abroad.

The United States and Togo signed the U.S. – Togo Treaty of Amity and Economic Relations in 1966, which entered into force a year later in 1967. This Treaty provides for protections of U.S. and Togolese investors. Togo has signed many economic, commercial, cooperation, and cultural agreements with its foreign aid donor countries, including France, Germany, Canada, the Netherlands, Belgium, Switzerland, Japan, and more recently with China, India, Iran, Saudi Arabia, and Israel.

Togo does not have a bilateral investment or taxation treaty with the United States.

Transparency of the Regulatory System

In June 2019, the National Assembly adopted a new investment code, which is in line with the objectives of the National Development Plan (PND) and embraces the government’s desire to make the private sector the engine of economic growth.

The Investment Code seeks to make Togo an attractive place for international companies, supporting the development of logistics hubs by offering tax incentives. The incentives are proportional to the size of the investments made and the number of jobs created. At a time when Togo is committed to decentralization, the new investment code provides additional advantages to investments that create jobs outside of major urban centers. The code operationalizes the National Agency for the Promotion of Investments and the Free Zone (API-ZF) which simplifies formalities. The deadline for adjudicating files is now set at 30 days maximum.

As a member of West African Economic and Monetary Union (WAEMU), Togo participates in zone-wide plans to harmonize and rationalize regulations governing economic activity within the Organization for the Harmonization of Business Law in Africa (OHADA – Organisation pour L’Harmonisation en Afrique du Droit des Affaires). OHADA includes sixteen African countries, including Togo, and one of the principal goals is a common charter on investment. Togo directly implements WAEMU and OHADA regulations without requiring an internal ratification process by the National Assembly.

Although the government does not make draft bills and proposed regulations available for public comment, ministries, and regulatory agencies in Togo generally give notice of and distribute the text of proposed regulations to relevant stakeholders. Ministries and regulatory agencies also generally request and receive comments on proposed regulations through targeted outreach to business associations and other stakeholders.

Togo is a member of UNCTAD’s international network of transparent investment procedures http://togo.eregulations.org . Foreign and national investors can find detailed information on administrative procedures applicable to investment and income generating operations including the number of steps, name and contact details of the entities, persons in charge of procedures, required documents and conditions, costs, processing time, and legal bases justifying the procedures. The site is generally up-to-date and useful.

The Public Procurement Regulatory Authority (ARMP) ensures compliance and transparency with respect to government procurements. Each responsible ministry ensures compliance with its regulations which are developed in conformity with international standards and agreements such as WTO or WAEMU norms. Regulations are not reviewed on the basis of scientific or data-driven assessments. The government has not announced any upcoming changes to the regulatory enforcement system. A July 2019 Decree No. 2019-097 / PR sets out a code of ethics and professional conduct in public procurement.

Togo joined the Development Center of OECD in June 2019, an opportunity to share experiences and pool resources.

International Regulatory Considerations

Togo is a member of the World Trade Organization (WTO). It is not known if the government notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).

For the most part, in economic terms, the Togolese legal and administrative framework is aligned with the community texts of UEMOA, ECOWAS or larger groups.

On the financial side, Togo depends on sub-regional institutions, notably the Central Bank of West African States (BCEAO) whose head office is in Dakar. The Regional Council for Public Savings and Financial Markets (CREPMF), headquartered in Abidjan, regulates financial markets.

The Togolese insurance market is subject to the rules of the CIMA zone (Inter African Conference of Insurance Markets).

With regard to intellectual property, Togo relies on OAPI (African Intellectual Property Organization).

The main laws and directives of these different legal and administrative areas are available, among others, on the website www.droit-afrique.com under the heading Togo.

More broadly, Togo is a member of the United Nations (UN), the World Trade Organization (WTO) or the International Renewable Energy Agency (IRENA).

At the African level, the country is also party to the Council of the Agreement, the Benin Electric Community (CEB), the African Peer Review Mechanism (APRM), the Alliance Zone and the Co-operation Zone for Prosperity (ZACOP), and the African Union.

Legal System and Judicial Independence

Togo practices a code-based legal system inherited from the French system. The judiciary is recognized as the third power after the executive and the legislative (the press being the 4th) and thus remains independent of the executive branch. Togo, as a member of the OHADA, has a judicial process that is procedurally competent, fair, and reliable. Regulations or enforcement actions are appealable like any other civil actions and are adjudicated in the national court system.

A Court of Arbitration and Mediation created in 2011 legally enforces contracts. The main law covering commercial issues is the Investment Code adopted in 2012. In 2013, Togo created three commercial Chambers within the Lomé tribunal with specialized magistrates who have exclusive trial court level jurisdiction over contract enforcement and business disputes.

Laws and Regulations on Foreign Direct Investment

The Investment Code allows the resolution of investment disputes involving foreigners through: (a) bilateral agreements between Togo and the investor’s government; (b) arbitration procedures agreed to between the interested parties; or (c) through the offices of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. The OHADA also provides a forum and legal process for resolving legal disputes in 16 African countries.

Investment dispute are managed by SEGUCE Togo (Societe d’Exploitation du Guichet Unique pour le Commerce Exterieur), and can be accessed at www.segucetogo.tg 

Togo is a member of UNCTAD’s international network of transparent investment procedures http://togo.eregulations.org . Foreign and national investors can find detailed information on administrative procedures applicable to investment and income generating operations including the number of steps, name and contact details of the entities and persons in charge of procedures, required documents and conditions, costs, processing time and legal bases justifying the procedures.

Competition and Anti-Trust Laws

The Public Procurement Regulatory Authority (ARMP) ensures compliance and transparency for competition-related concerns. The government regularly seeks to improve the framework for public procurement (including professionalizing the public procurement sector, moving procurement online, enacting legislative regulations, etc). These reforms directly benefit the private sector, which serves as the engine for the National Development Plan (PND).

Expropriation and Compensation

The government can legally expropriate property through a Presidential decree submitted by the cabinet of ministers and signed by the President.

Only two major expropriations of property have taken place in Togo’s history. The first was the February 1974 nationalization of the then French-owned phosphate mines. The second was the November 2014 nationalization of the Hôtel du 2 Février after it had ceased operations for several years. Shortly after the nationalization of the hotel, Togo announced that it was establishing a commission to determine the fair market amount owed as compensation to the hotel’s Libyan owners/investors. Setting aside the case of the Hôtel du 2 Février as an isolated example, there is little evidence to suggest a trend towards expropriation or “creeping expropriation.” The government designed the 2012 Investment Code to protect against government expropriations. There are some claimants from lands expropriated for recent road construction, however, and the procedure to investigate and resolve those claims is slow. Another issue is that land titles are very unclear with traditional and modern systems overlapping. The government has occasionally earmarked land for development with unclear title that has raised complaints from local communities.

Dispute Settlement

ICSID Convention and New York Convention

Togo is not a party to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards. Togo is, however, a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention – also known as the Washington Convention), which it ratified in 1967.

Investor-State Dispute Settlement

Togo does not have Bilateral Investment Treaty (BIT) or Free Trade Agreement (FTA) with an investment chapter with the United States.

Togo does not have a history of extrajudicial action against foreign investors, notwithstanding the two historical examples above. There do not appear to be any investment disputes involving U.S. persons from the past ten years. Local courts recognize and enforce foreign arbitral awards issued against the government.

International Commercial Arbitration and Foreign Courts

The dispute resolution alternative is the Court of Arbitration of Togo (CATO), which conforms to standards as established by the Investment Climate Facility for Africa (ICF). Local courts recognize and enforce foreign arbitral awards and there are no known State Owned Enterprise investment disputes that have gone to the domestic court system.

The World Bank’s International Finance Corporation (IFC) worked with the Government of Togo to improve commercial justice through the strengthening of alternative dispute resolution mechanisms. The aim of the project was to increase the speed and efficiency of settlement of commercial disputes through the procedures used by the CATO.

As a result of the project, 30 new arbitrators and 100 magistrates and professionals received training in mediation/arbitration techniques. Further, the new CATO procedure manual is explicit that the time between filing and judgment shall be a maximum of 6 months as per article 36 of the ruling procedures.

Bankruptcy Regulations

Togo uses the standards set forth under the Organization for the Harmonization of Business Law in Africa (OHADA). That law states that if bankruptcy occurs, the competent jurisdiction designates an expert that concludes an agreement with creditors and stakeholders (preventive arrangement). The Manager (or managers) can be put under “patrimonial sanctions”, meaning they can be personally liable for the debts of the company. The manager is then forbidden to do business, to manage, administer, or control an enterprise, or hold political or administrative office, for three to ten years. Bankruptcy is criminalized, but generally as a last resort.

According to data collected by the World Bank, insolvency proceedings take three years on average and cost approximately 15 percent of the debtor’s estate, with the most likely outcome being that the company will be sold off in pieces. The average recovery rate is 27.9 cents on the dollar. The World Bank’s Doing Business 2020 places Togo at 88 of 190 for the “Resolving Insolvency” indicator, well above the Sub-Saharan Africa regional average.

Investment Incentives

Investment incentives are available to foreign investors that invest more than $100,000. Incentives include exemption from VAT and Customs Duties on new imported plant and materials, reduced income taxes for up to five years, and depending on the number of permanent jobs created for nationals, reduction on salary taxes during an approved period of time. Incentives are also available in the Export Processing Zone (EPZ).

Foreign Trade Zones/Free Ports/Trade Facilitation

The 2011 law modifying the 1989 law creating the Export Processing Zone (EPZ) provides an advantageous taxation scheme for companies based in the EPZ with a reduced tax bill on their profits for their first 20 years of operation, including a five percent tax on profits for the first five years. The law also exempts companies from customs duties and VAT on imported equipment and inputs, as well as an exemption from VAT on goods and services purchased locally. It also provides EPZ companies the freedom to repatriate capital, including dividends and other income. The law also exempts companies within the EPZ from providing workers with many legal protections, including protection against anti-union discrimination with regard to hiring and firing.

The government created the National Agency for the Promotion of Investments and the Free Zone (API-ZF) in 2003 but it is not yet operational. API-ZF is now a government priority to help accelerate the growth of investments in line with the government road map. The government anticipates that API-ZF will help boost national and international investments across all sectors, leading to increased jobs and wealth creation.

The 400-hectare “Adetikope Industrial Plateform” (PIA) industrial zone will open in June 2021. PIA will be dedicated to processing industries, including the cotton sector and agro-processing. This industrial zone will boost Togo’s capacity to transform raw materials into goods for export. PIA aims to process 30% of Togo’s total exports within five years.

The African Continental Free Trade Area (AfCFTA / ZLECAF) will facilitate intra-African trade and eliminate customs duties for 90% of goods from other African countries. The trade accord also aims to reduce or eliminate non-tariff impediments such as corruption and border delays and encourage trade facilitation measures. Additionally, UNDP and AfCFTA signed a March 2021 agreement to promote trade as a stimulus for Africa’s socio-economic recovery from the COVID-19 crisis, especially for women and youth.

Performance and Data Localization Requirements

Firms are required by law to employ Togolese nationals on a priority basis, and after five years foreign workers cannot account for more than 20 percent of the total workforce or of any professional category. In practice, the Togolese government strongly encourages large foreign employers outside of the EPZ to hire as many Togolese nationals as practical. These encouragement schemes do not typically apply to senior management level employees.

There are reports that foreigners seeking to legalize their status for long-term work and residence purposes have encountered significant administrative obstacles and delays, although the steps for receiving residence permits are well defined. Issuance of such permits is the responsibility of the National Police.

There are no government-imposed conditions on permission to invest and there is no policy on “forced localization.” Foreign IT providers are not required to turn over source code and/or provide access to encryption and there are no measures that prevent or unduly impede companies from freely transmitting customer or other business-related data outside the economy/country’s territory.

Real Property

Property rights and interests are enforced, although nearly 80% of court cases are reported to involve land title disputes. Mortgages and liens exist but land titles are precarious and often subject to litigation. Most land does not have a clear title, especially outside of urban areas. The government is attempting to fix this issue through various commissions that will issue recommendations, but it will take years to resolve.

The average time to proceed with property transfer decreased from eight days in 2018 to five days in 2019.

All land-related operations are carried out via the government’s “One-Stop Shop” for property transactions (called the Guichet Unique Foncier) at the Togolese Revenue Office (OTR). This “One-Stop Shop” within the OTR simplifies property transfer procedures, reduces administrative costs, and minimizes the risks in the process. The government has reduced the registration fee for property transfer to a 35,000 FCFA ($64) flat fee rather than the previous 4% of market value. The process of issuing a land title now takes only five hours, down from 48 hours in 2018.

An independent complaints mechanism exists in the Togolese Revenue Office (OTR). OTR has been set up to deal with land complaints. The office gives itself 48 hours to respond to requests.

Since December 10, 2019, all cadastral maps of greater Lomé (2,568 in total) were digitized and are made available in a database. This makes it possible to update the targeted plans and to carry out studies and validation of files at the “Guichet Unique Foncier” (GUF).

In Togo, only Togolese citizens, French citizens, foreign governments, and those granted citizenship by the judiciary are allowed to possess real property. Other foreigners must request permission from the Prime Minister, which is usually granted for investors who will develop the land. Land speculation is discouraged by the government. Property legally purchased that remains unoccupied will not be reverted to other owners under the law; however, in practice, unused land that is not protected will likely be occupied or used by others and potentially subject to lengthy court battles to prove ownership.

Intellectual Property Rights

The regional African Intellectual Property Organization (OAPI) and National Institute for Industrial Property and Technology (INPIT) are the two agencies that protect IP in Togo. On November 30, 2020 Togo ratified the Bangui Agreement, which governs intellectual property in the 17 OAPI member states.. There are no official figures available on how the country tracks and reports on seizures of counterfeit goods. The country may prosecute IPR violations, but there are no known cases.

Togo is not listed in USTR’s Special 301 report or in the notorious market report. For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/.

Capital Markets and Portfolio Investment

Togo and the other West African Economic and Monetary Union (WAEMU) member countries are working toward greater regional integration with unified external tariffs. Togo relies on the West African Economic and Monetary Union (WAEMU) Regional Stock Exchange in Abidjan, Cote d’Ivoire to trade equities for Togolese public companies.

WAEMU has established a common accounting system, periodic reviews of member countries’ macroeconomic policies based on convergence criteria, a regional stock exchange, and the legal and regulatory framework for a regional banking system. The government and central bank respect IMF Article VIII and refrain from restrictions on payments and transfers for current international transactions. Credit is generally allocated on market terms. With sufficient collateral, foreign investors are generally able to get credit on the local market. The private sector in general has access to a variety of credit instruments when and if collateral is available.

Money and Banking System

The penetration of banking services in the country is low and generally only available in major cities.

The government and the banking sector have worked to restore Togo’s reputation as a regional banking center, which was weakened by political upheavals from 1991 to 2005, and several regional and sub-regional banks now operate in Togo, including Orabank, Banque Atlantique, Bank of Africa, Diamond Bank, International Bank of Africa in Togo (BIAT), and Coris Bank.

Additionally, Togo is home to the headquarters of the ECOWAS Bank for Investment and Development (EBID), the West African Development Bank (BOAD – the development bank of the West African Economic and Monetary Union), Oragroup, and Ecobank Transnational Inc. (ETI), the largest independent regional banking group in West Africa and Central Africa, with operations in 36 countries in Sub-Saharan Africa.

The banking sector is generally healthy, and the total assets of Togo’s largest banks are approximately $25-30 billion, including Ecobank, a very large regional bank headquartered in Lomé.

Togo’s monetary policy and banking regulations are managed by the Central Bank of West African States (BCEAO). No known correspondent relationships were lost in the past four years. No known correspondent banking relationships are in jeopardy.

Foreign Exchange and Remittances

Foreign Exchange

There are no restrictions on the transfer of funds to other FCFA-zone countries or to France. The transfer of more than FCFA 500,000 (about $1,000) outside the FCFA-zone requires justification documents (e.g. pro forma invoice) to be presented to bank authorities.

The exchange system is free of restrictions for payments and transfers for international transactions. Some American investors in Togo have reported long delays (30 – 40 days) in transferring funds from U.S. banks to banks located in Togo. This is reportedly because banks in Togo have limited contacts with U.S. banks to facilitate the transfer of funds.

Togo uses the CFA franc (FCFA), which is the common currency of the eight (8) West African Economic and Monetary Union (WAEMU) countries. The currency is fixed to the Euro at a rate of 656 FCFA to 1 Euro. As a result of this fixed exchange rate, Togo’s inflation rate is consistently below 2%.

Remittance Policies

The 2012 Investment Code provides for the free transfer of revenues derived from investments, including the liquidation of investments, by non-residents.

Sovereign Wealth Funds

Togo does not maintain a Sovereign Wealth Fund (SWF) or other similar entity.

The government published a list of 16 State-owned Enterprises (SOEs) and the shareholding of twenty-six (26) other semi-public companies in December 2019. These SOEs may enjoy non-market based advantages received from the host government, such as the government delaying private enterprise investment in infrastructure that could disadvantage the market share of the SOE.

All SOEs have a Board of Directors and Supervisory Board, although the Togolese government has not specified how it exercises ownership in the form of an ownership policy or governance code. The SOEs also have auditors who certify their accounts. Once certified by these auditors, the accounts of these companies are sent to the Court of Auditors, Togo’s supreme audit institution, which verifies and passes judgment on these financial statements and reports to the National Assembly. The Court publishes the results of its audits annually, including at http://courdescomptestogo.org .

SOEs control or compete in the fuel, cotton, telecommunications, banking, utilities, phosphate, and grain-purchasing markets. The government wants to revitalize the phosphate sector and become a leading global player via the state-owned New Phosphate Company of Togo (SNPT).

In June 2020, the New Cotton Company of Togo (NSCT) which produces cotton domestically was sold to the Singaporean Company OLAM Group (51%) with 40% to Cotton Producers Consortium (FNGPC) (40%), while the Government of Togo maintained a 9% stake. Through this privatization, the Government hopes to further develop the textile industry. Before this privatization, NSCT was 60% state-controlled after the bankruptcy and dissolution of the 100% state-owned Togolese Cotton Company (SOTOCO) in 2009.

In September 2012, Togo sold the formerly state-owned Togolese Development Bank to Orabank Group, which has some U.S. investors. Likewise, in March 2013, Togo sold the formerly state-owned Banque Internationale pour l’Afrique au Togo to the Attijariwafa Bank Group of Morocco.

Following these sales, Union Togolaise de Banque (UTB) and Banque Togolaise pour le Commerce et l’Industrie (BTCI) are now the only two state-owned banks. Togo’s first call for tenders for these two banks, completed in 2011, was unsuccessful. Togolese authorities are working in consultation with the IMF to either merge the two banks into a single entity, or try to privatize one or both. These two remaining state-owned banks hold weak loan portfolios characterized by high exposure (about one-third of total bank credit) to the government, as well as to the cotton and phosphate industries.

In the telecommunications sector, the government combined in 2017 the two state-owned entities Togo Telecom and TogoCell into a holding company, TogoCom. In November 2019, Agou Holding consortium, made up of the Madagascan conglomerate Axian (majority) and the capital-investor Emerging Capital Partners (ECP) bought a 51% stake in TogoCom. The Togolese Government maintains a 49% stake. Agou Holding plans to invest $271 million in TogoCom over seven years to improve international connectivity and expand its high-speed fiber-optic and mobile networks. However, such investment is not yet apparent, with 4G restricted to a small area in Lomé. Nonetheless, Togocom announced in March 2021 that it is launching 5G service at the Port of Lome, the main government administrative area, and the Adetikope Industrial Platform (PIA), using Nokia equipment.

The new entity stills directly competes with a private cell phone company, Moov Togo. Atlantique Telecom, a subsidiary of Emirates Telecommunications Corporation (Etisalat), owns and controls Moov Togo. The Government of Togo has licensed Togocom and Moov for 4G. Private company CAFÉ Informatique also offers satellite-based internet access and other services, mainly to the business sector. Two new internet service providers, Teolis and Vivendi Africa Group (GVA-Togo), entered the market in 2018 and the government is installing new fiber optic cable in the country.

Public utilities such as the Post Office, Lomé Port Authority, Togo Water, and the Togolese Electric Energy Company (CEET) hold monopolies in their sectors.

The National Agency for Food Security (ANSAT) is a government agency that purchases cereals on the market during the harvest for storage. When cereal prices increase during the dry season, it is ANSAT’s task to release cereals into the markets to maintain affordable cereal prices. When supplies permit, ANSAT also sells cereals on international markets, including Ghana, Niger, and Gabon.

Togo does not adhere to the OECD Guidelines on Corporate Governance for SOEs (link to guidelines at www.oecd.org/daf/ca/oecdguidelinesoncorporategovernanceofstate-ownedenterprises.htm 

Privatization Program

Previous privatization in Togo covered many sectors, such as hotels, banking, and mining. Foreign investors are encouraged to compete in new privatization programs via a public bidding processes. The government publishes all notifications in the French language, but unfortunately, a relevant government website is not available.

Responsible Business Conduct (RBC) is not officially addressed in Togo by the government, other than as it relates to corruption and criminal activity. RBC and its variants such as “Fair Trade” is known by independent NGOs and businesses which promote these practices and are able to do their work freely.

Some American-owned companies follow generally-accepted RBC principles, and participate in outreach programs to local villages where they supply, among other things, school buildings, water, electricity, and flood abatement resources. In accordance with a law passed in March 2011, new construction projects must now address environmental and social impacts.

Togo joined the Extractive Industries Transparency Initiative (EITI) in 2009 and has been officially recognized as EITI-compliant since 2013. Togo’s EITI Secretariat carries out a yearly verification of financial statements relating to the extractive industry.

The Ministry of Civil Service, Labor, Administrative Reform, and Social Protection sets workplace health and safety standards and is responsible for enforcement of all labor laws. There have been no high-profile, controversial instances of private sector impact on human rights or resolution of such cases in the recent past.

Togolese law provides workers, except security forces (including firefighters and police), the right to form and join unions and bargain collectively. There are supporting regulations that allow workers to form and join unions of their choosing. Workers have the right to strike, although striking healthcare workers may be ordered back to work as necessary for the security and well-being of the population. While no provisions in the law protect strikers against employer retaliation, the law requires employers to get a judgment from the labor inspectorate before they fire workers. If firms fire workers illegally, including for union activity, the companies must reinstate the employees and compensate them for lost salary.

The law recognizes the right to collective bargaining; representatives of the government, labor unions, and employers negotiate and endorse a nationwide agreement. This collective bargaining agreement sets nationwide wage standards for all formal sector workers. For sectors where the government is not an employer, the government participates in this process as a labor-management mediator. For sectors with a large government presence, including the state-owned companies, the government acts solely as an employer and does not mediate.

The government follows OHADA recommended rules and regulations on corporate governance, accounting, and executive compensation.

Private security companies are present in Togo but the country is not a participant in the International Code of Conduct for Private Security Service Providers Association (ICoCA).

The Togolese government has established several important institutions designed in part to reduce corruption by eliminating opportunities for bribery and fraud: the Togolese Revenue Authority (OTR), the One-Stop Shop to create new businesses (CFE), and the Single Window for import/export formalities.

In 2015, the Togolese government created the High Authority for the Prevention and Fight against Corruption and Related Offenses (HAPLUCIA), which the government designed to be an independent institution dedicated to fighting corruption. The government appointed members in 2017. HAPLUCIA encourages private companies to establish internal codes of conduct that, among other things, prohibit bribery of public officials. HAPLUCIA presented on February 7, 2019 its strategic plan for the period 2019-2023; it set up a toll-free number, the “8277” to receive complaints and denunciations.

Anti-corruption laws extend to family members of officials, and to political parties and the government does not interfere in the work of anti-corruption NGOs.

In 2011, the government effectively implemented procurement reforms to increase transparency and reduce corruption. The government announces procurements weekly in a government publication. Once contracts are awarded, all bids and the winner are published in the weekly government procurement publication. Other measurable steps toward controlling corruption include joining the Extractive Industries Transparency Initiative (EITI) and establishing public finance control structures and a National Financial Information Processing Unit.

Togo signed the UN Anticorruption Convention in 2003 and ratified it on July 6, 2005.

Resources to Report Corruption

Contact at the government agency or agencies that are responsible for combating corruption:

Essohana Wiyao
President of HAPLUCIA, the High Authority for the Prevention and Fight against Corruption and Related Offenses
Tel. +228 90 21 28 46 / 90 25 77 40
Email: essohanawiyao@yahoo.fr 
Lomé, Togo

Directeur, Anti-Corruption
Office Togolais des Recettes (OTR)
41 Rue des Impôts
02 BP 20823
Lomé, Togo
+228 – 22 53 14 00
otr@otr.tg 

Contact at a “watchdog” organization:

Samuel Kaninda
Regional Coordinator, West Africa
Transparency International
Alt-Moabit 96
10559 Berlin
Germany
+49 30 3438 20 773
skaninda@transparency.org 

After a period of sustained political instability and economic stagnation from 1990 to 2007, the government started the country along a gradual path to political reconciliation and democratic reform. Togo has held multiple presidential, legislative, and local elections that were deemed generally free and fair by international observers, though the most recent legislative elections were boycotted by the majority of the opposition. Political reconciliation has moved slowly. A political crisis erupted in 2017 regarding the failure of the government to implement political measures, such as presidential term limits. After international facilitation between the government and opposition parties, in May 2019 the government implemented non-retroactive term limits and a two-round election system. The government held local elections in 2019, the first since 1986. President Faure Gnassingbe was elected for a fourth term on February 22, 2020 in a peaceful election.

Political protests still occur on occasion and can often lead to tire burning, stone throwing, and government responses include the use of tear gas and other crowd control techniques. There are no known examples over the past ten years of damage to projects and/or installations pertaining to foreign investment due to political violence.

The labor market is predominately unskilled and there is a shortage of skilled labor and English speaking employees. Some migrant farm workers arrive from Ghana and Benin based on familial ties. Widespread underemployment exists, and large portions of the non-agricultural workforce participate in the informal economy.

In general, government labor policy favors employment of nationals.

Regulations require that firms hire workers with time specific contracts that include severance requirements. The labor code, and regulations called the “Convention Collective” differentiate between layoffs and firings, but both require severance payments. Free Trade zones offer different labor law provisions to encourage investment.

Public employee unions (school teacher, judicial clerks, etc) use collective bargaining, and are willing to take to the streets in non-violent protest to raise the profile of their demands. Labor disputes are often resolved on an ad-hoc basis, usually with the intervention of parliamentarians.

Togo adopted a new Labor Code on December 29, 2020, replacing the 2006 code. The new code has increased social protection measures, requires employers to register employees with the National Social Security Fund (CNSS), and introduces severance pay and precarious work premiums. At the same time, it provides greater flexibility in the labor market by allowing for a variety of contract types depending on a company’s activities (e.g. seasonal labor, project-based contracts, telework). Finally, the new code allows the government to favor disadvantaged geographic areas and social groups.

The U.S. and Togo have a DFC agreement in place. DFC provides political risk insurance and financing for ContourGlobal’s 100-megawatt power plant in Togo. The plant began operation in the fall of 2010 providing base-load electricity for the country. DFC also provides insurance for the West African Gas Pipeline Company Limited through Steadfast Insurance Co. The French government agency COFACE provides investment insurance in Togo under programs similar to those offered by DFC. Investment insurance through the Multilateral Investment Guarantee Agency (MIGA) is also an option to explore.

Note: U.S. based ContourGlobal built a 100 megawatt power plant in Togo in 2010. This FDI is not recorded in official U.S. government statistics.

Table 4: Sources of Portfolio Investment
Data not available.

Political-Economic Section
U.S. Embassy, Lomé
4332 Blvd Eyadéma – BP 852, Lomé, Togo
+228 2261 5470, ext 4466
togocommercial@state.gov