Togo was one of the first African countries to respond to the crisis, developing and quickly implementing the most urgent components of a comprehensive, multi-year response plan that aims to protect lives, livelihoods, and future growth prospects. This comprehensive economic and social resilience plan seeks to upgrade the health system, contain the economic fallout of the crisis, and provide targeted support to vulnerable households and firms. It is comprised of measures targeting:
Health: Additional health spending was reported at 1.4 percent of GDP in 2020. The state of health emergency triggered the implementation of a set of containment and mitigation measures, including strengthening laboratory diagnostic capacity, equipping treatment centers, improving drug availability, and the launch of a vast program to rehabilitate hospitals and to provide health centers with standard infrastructure to screen and treat people with COVID-19. At least 160,000 doses of COVID vaccines have been administrated so far. As of May 31, it was estimated that 3.3 percent of the population had received at least one vaccine dose.
Social objectives: Additional spending on social objectives was reported at 0.7 percent of GDP in 2020. A new mobile cash-transfer program, NOVISSI, was launched in April 2020. Eligibility is limited to informal workers in specific districts recording a high contagion rate. Eligible applicants receive a state grant of at least 30 percent of the minimum wage, with payouts from CFAF 10,500 ($18) to CFAF 20,000 ($34). Based on program data, 65 percent of the beneficiaries are women. In total, 1.6 million individuals have registered and over 800,000 have received a NOVISSI payment so far. The Government has also subsidized water and electricity use for groups paying social tariffs and made funds available to strengthen food stocks, fertilizer, and seed stocks for the benefit of vulnerable groups.
Economic recovery: Support to the private sector is estimated at about 1 percent of GDP mainly because of measures that allowed for lower tax payments, including: (i) suspension of all procedures for forced tax collections and ongoing tax prosecutions during the state of emergency; (ii) rescheduling of submission deadlines for businesses that cannot submit their tax declarations on time; (iii) small- and medium-sized enterprises permitted to pay taxes in tranches and enjoy more flexibility regarding outstanding taxes due; and (iv) reduction of the standard VAT rate of 18 percent to 10 percent for firms in the hospitality and catering sectors.
The overall fiscal deficit was reported at 7 percent of GDP in 2020. The IMF provided significant financing, approving an ECF disbursement (with an augmented quota) of US$131 million (1.8 percent of GDP) in 2020. The World Bank provided budget support of US$70 million (1.0 percent of GDP) and project support for Covid-19 measures equivalent of about 0.5 percent of GDP. The West African Development Bank (BOAD), the European Investment Bank (EIB), and the African Development Bank (ADB) also provided financing.
Heads of states of the West-Africa Economic and Monetary Union (WAEMU) have declared a temporary suspension of the WAEMU growth and stability pact (setting six convergence criteria, including the 3 percent of GDP fiscal deficit limit) to help member-countries cope with the fallout of the Covid-19 pandemic. As a result, member countries are allowed to raise their overall fiscal deficit temporarily and use any additional external support provided by donors in response to the Covid-19 crisis. The declaration by the heads of states sets a clear expectation that fiscal consolidation will resume once the crisis is over.
