Togo - Joint World Bank-IMF Debt Sustainability Analysis - April 2020

Jul 19, 2026

Uploaded by Aurelia

Joint World Bank-IMF Debt Sustainability Analysis for Togo assesses risks to external and overall public debt, confirming moderate risk of external debt distress and high risk of overall public debt distress. Despite low mechanical indicators for external debt, judgment accounts for domestic vulnerabilities. Under the baseline scenario, the present value of total public and publicly guaranteed debt-to-GDP breaches the benchmark through 2021. The analysis calls for sustained fiscal consolidation, stronger debt management, and robust macroeconomic policies to return debt to prudent medium-term levels.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages20

Reading Time50 min

AccessFree to download

Executive Summary

Risk of Debt Distress Assessment

Need for Fiscal Consolidation and Debt Management

Public Debt Coverage

Definitions and Coverage Scope

Currency-Based Coverage Rationale

Background on Debt

Debt Dynamics and Drivers (2016–2019)

Expected Developments in 2020

Public Disclosure Authorized Public Disclosure Authorized INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL MONETARY FUND TOGO Joint World Bank-IMF Debt Sustainability Analysis1 April 2020 Prepared jointly by the staffs ofthe International Development Association (IDA) and the International Monetary Fund (IMF) Approved by Marcello Estevão (IDA) and Dominique Desruelle (IMF) | Joint Bank-Fund Debt Sustainability Analysis | | | --- | --- | | Risk of external debt distress | Moderate2 | | Overall risk of debt distress | High | | Granularity in the risk rating | Substantial space to absorb shocks on external debt | | Application of judgment | Yes: Historical vulnerability to multiple shocks | This Debt Sustainability Analysis (DSA) confirms Togo’s moderate risk of external debt distress and high risk of overall public debt distress—unchanged from the previous DSA update published in October 2019. While the mechanical results point to a low risk of external debt distress, judgment was applied given domestic debt vulnerabilities; external debt distress is therefore considered to be moderate. The overall risk of debt distress is assessed as high considering that the present value (PV) of total public and publicly guaranteed (PPG) debt-to-GDP ratio breaches the debt distress benchmark through 2021 under the baseline scenario. This analysis highlights the need for sustained fiscal consolidation, improved debt management, and strong macroeconomic policies to reduce public debt to prudent levels over the medium term. 1 This DSA was prepared jointly with the World Bank and in collaboration with the Togolese authorities. 2 Togo’s Composite Indicator (CI) is 2. 91, which corresponds to a medium debt-carrying capacity as confirmed by the October 2019 WEO data and the 2018 Country Policy and Institutional Assessment (CPIA) . PUBLIC DEBT COVERAGE 1. Togo’s public debt includes obligations of the central government and public entities. Debt data include external and domestic obligations of the central government, including arrears to suppliers and guaranteed debt, as well as external and domestic debt of state-owned enterprises (SOEs). As such, it also includes debt of the Caisse Nationale de Sécurité Sociale (Social Security Fund), which is considered as an SOE. As for local authorities, they cannot contract new debt, and the central government is in the process of identifying residual local debt that is gradually repaid, akin to arrears to the national electricity company that have been totally reimbursed. The Central Bank of the currency union (BCEAO) does not issue debt on behalf of its member countries. Domestic debt is defined as debt denominated in franc dela Communauté Financière d’Afrique (CFAF), while external debt is defined as debt contracted orservicedina currency other than theCFAF. Thechoiceof coverage based on currency, rather than residency, is dueto the difficulty of monitoring the residency of creditors for debt traded in the WAEMU regional market. | Text Table 1. Togo: Public Debt Coverage | | --- | | 1 Subsectors of the public sector Sub-sectors covered Central government X 2 State and local government 3 Other elements in the general government 4 o/w: Social security fund X 5 o/w: Extra budgetary funds (EBFs) 6 Guarantees (to other entities in the public and private sector, including to SOEs) X 7 Central bank (borrowed on behalf of the government) X 8 Non-guaranteed SOE debt X
1 The country's coverage of public debt The central government plus social security, central bank, government-guaranteed debt, non-guaranteed SOE debt Default Used for the
analysis Reasons for deviations from the default settings 2 Other elements of the general government not captured in 1. 0 percent of GDP 0.0 3 SoE's debt (guaranteed and not guaranteed by the government) 1/ 2 percent of GDP 0.0 All SOE debt is already included in the country's coverage of public debt. 4 PPP 35 percent of PPP stock 6.8 5 Financ

FAQs

How does the analysis classify Togo’s external debt distress risk?

External debt distress risk is assessed as moderate. Mechanical results suggest low risk, but judgment is applied because domestic vulnerabilities could amplify external shocks.

Why is the overall risk of debt distress considered high?

The overall risk is high because the present value of total public and publicly guaranteed debt-to-GDP breaches the debt distress benchmark through 2021 under the baseline scenario.

What debt items are included in Togo’s public debt coverage?

Coverage includes obligations of the central government and public entities, incorporating external and domestic central government debt (including arrears to suppliers and guaranteed debt) as well as external and domestic debt of state-owned enterprises (SOEs).

What explains changes in Togo’s debt ratios after 2016?

After a 2016 peak, the debt ratio fell due to fiscal consolidation. Domestic debt declined mainly from reimbursement of domestic arrears and early repayment of costlier obligations, while external debt increased slightly via reprofiling and multilateral lending.

Jul 19, 2026

Uploaded by Aurelia