Policy Watch

BCEAO Monetary Policy Statement


The monetray policy committte decided to keep its key rate unchanged to 3.5%.

BCEAO Monetary Policy Statement


The monetary policy committte decided to maintain its key rate unchanged to 3.5%.

BCEAO Monetary Policy Statement


The monetary policy committee decided to keep its key rate unchanged to 3.5%.

BCEAO Monetary Policy Statement


The monetary policy committee has decided to maintain its key rate to 3.5%.

Debt vs GDP / Bonds vs bills

All Data - Togo

Year 2012 2013 2014 2015 2016 2017
GDP (billions US$) 3.90 4.18 4.18 - - -
Total Outstanding Amount (Billion US$) 0.41 0.69 - - - -
Bonds 0.29 0.41 - - - -
Bills 0.12 0.28 - - - -
Outstanding Amount/GDP (%) 10.59% 16.45% 0.00% - - -

Country Summary

The 5.6% growth in 2013 was largely due to the primary sector, namely cotton and food crops, plus services such as retail, transport and storage, and communications. Continuing public investment and a boost to the cotton and phosphate sectors are expected to sustain growth, projected at 6.0% in 2014 and 6.3% in 2015.

Despite an 11% increase in tax revenue, the tax ratio increased only slightly from 16.4% in 2012 to 16.9% in 2013. The deficit in the overall balance improved from 5.8% of GDP to 4.6%. Inflation was 1.8%, and will be controlled in the medium term.

The 2013 legislative elections were without incident. Peaceful preparation for the 2015 presidential elections will be a key factor in the country’s continued progress.

Three-quarters of the Togolese population are under 35 and just 35% are aged 15-35. The latter age group has a particularly high rate of unemployment (8.1%) and underemployment (20.5%). The poverty rate decreased 3 percentage points from 61.7% in 2006 to 58.7% in 2011. While these results are positive, they are well under the Millennium Development Goal (MDG) of 30.9% by2015. This is exacerbated by the extreme poverty rate, which increased from 28.6% to 30.4% over the same period. The rise in extreme poverty is linked to an upturn in inequality, with the gini coefficient increasing from 0.361 to 0.393.

In education, government measures in recent years led to a gross enrolment rate of 114.5% in 2012/13. Nevertheless, students at all levels are not completing their education. As a result, close to 85% of job seekers remain without qualifications.

Insufficient resources and governance issues plague the health sector. Child mortality increased slightly from 123 per thousand in 2006 to 124 per thousand in 2010, while infant mortality increased slightly from 76 per thousand to 77 per thousand over the same period. Maternal mortality, on the other hand, dropped from 350 per one hundred thousand births in 2008 to 300 per one hundred thousand in 2011. The HIV/AIDS infection rate also declined from 4% in 2006 to 3% in 2012.

Togo has significant mineral deposits (phosphate, limestone, iron and magnesium). It must first develop its extractive industry and processing plants in the medium and long term to take advantage of global value chains (GVCs). Port services and regional transport also hold opportunities. Other openings may develop in different industrial sectors, but they will depend on both the quality of public service and the cost and availability of utilities.

The state of Togo is one of the eight members of the West African Economic and Monetary Union (WAEMU). These eight states have a common Central Bank (BCEAO).

The regional debt market provide to the states of the WAEMU an alternative source to cover their financing needs, instead of direct monetary assistance from the BCEAO to national treasuries.

There is a common banking sector in the WAEMU. There are 119 accredited credit institutions on which 102 banks. Foreign banks dominate the Togolese banking sector, there are 12 banks and 2 financial institutions with a total assets of XOF 1338 billion which is 7,7% of the total assets of all the banks in region. The banking activity is characterized high interest rates and conservative lending process. Therefore, few firms have access to credit.

The other source of financing is the West African Regional Stock Exchange (BRVM). The market capitalization at end of 2014 was XOF 7 438 billion of which XOF 1 139 billion for the bond compartment. Bonds issuing by the States of WAEMU are traded at the BRVM.

Source: African Economic Outlook

Monetary policy & Public debt

Togo as WAEMU member has no sovereignty over the monetary policy decisions. Decisions are taken by the BCEAO in accordance with all members. The main role of the BCEAO is the price stability.

The Conference of Heads of State is the supreme authority of the Union. She decides on the accession of new members, and takes all decisions on matters submitted to it by the Council of Ministers.

The Council of Ministers sets monetary policy and credit of the Union to safeguard the value of the currency and to fund activity and economic development of the states of the Union. It approves such netting agreements and payments between the central bank and foreign issuing institutions intended to facilitate external paymentsn of the Union's states.

In the WAEMU zone, the debt to GDP ratio must stay under 70%. 

Togo’s debt stock is composed of external and domestic debt managed at a lower level. In 2012, the external debt to GDP ratio is equal to 19,24% compared to a domestic debt to GDP ratio of 10,42%. 

Market Structure

Issuers and Instruments issued

Instruments issued

Treasury Bills (T-Bills): Maturities available 7 days, 1 month, 3months, 7 months, 1-year and 2-year.

Treasury Bonds (T-Bonds): Maturities available are greater than 2 years but don’t exceed 7 years.

The nominal value of treasury bills is set at XOF 1 million or a multiple of this amount. The nominal value of Treasury bonds XOF 10 000 or a multiple of this amount.

T-bills are dematerialized and held in current account in the books of the Central Bank. While T-bonds are dematerialized and held in current account in the books of the central depositary.

Market participants

Each State under the responsibility of the Ministry of Finance, issues T-bills and T-bonds.

The Central Bank of the States of West Africa (BCEAO) provides, on behalf of the Treasuries, the material organization of auctions.

West African Development Bank (BOAD) issues bonds to finance the development projects in the WAEMU zone.

Banks and the financial institutions are main actors in the purchase and repurchase of Treasury securities. 

Primary & Secondary Market

Primary Market

Togo has issued for XOF 108,07 billion in 2012. The repartition between T-Bills and T-Bonds is almost equal, with XOF 60 billion on T-Bills and XOF 48,07 billion on T-Bonds.

In the WAEMU zone, the outstanding of the new issuances decreased by 8,5% to XOF 1 545 billion in 2012 from to XOF 1 689,7 billion in 2011. T-bills, represent 52,2% of the total issuances. The average interest rate of the T-Bills issuances was 5,15% in 2012.

The total debt’s outstanding of the WAEMU zone, amounted XOF 3 023,9 billion at end of 2012. It increased by 14% compared to 2011. The total debt outstanding represents 7,6% of the GDP of the WAEMU zone.

For the year 2013, the expectations are to raise XOF 1 961 billion, an increase of 26,9% compared to 2012. The share of T-Bills will be around 57%. The total debt outstanding is estimated at end of 2013 at XOF 3 261 billion.

Secondary Market

T-Bills are traded OTC. The secondary market is not liquid because of the buy & hold strategy commonly used.

T-Bonds are traded at the Regional Bond Exchange (BRVM) but it can also be traded OTC.  There are 34 quoted lines at the BRVM. There are 10 bonds issued by the countries directly and 3 bonds by the BOAD. The rest of the bonds are belonged by state companies or institutions. 

The state of Togo has one debt instruments quoted at the BRVM.

At end of December 2012, the market capitalization of quoted bonds at the BRVM was equal to XOF 831,8 billion. The average of bond traded by day is equal to 1, which demonstrates the illiquidity of the secondary market. The yield curve is inexistent in reason of the absence of maturities greater than 7 years.

Clearing, Settlement and Custody

Payments for purchases of treasury bills by subscribers is done by debiting their ordinary current account with the Central Bank, at the value date defined before the issuance of such bonds. Purchasers must take all steps to ensure that these accounts are adequately funded to ensure the settlement of Treasury allocated to them for their own account or on behalf of their clients.

The day after the settlement, all account holders receive a statement of their securities account, confirming the movements and balances out the latest. A value date of the issuance of Treasury bonds, the proceeds of sales deductions, net of discount paper is credited to the ordinary current account of the National Treasury with the BCEAO.

On the secondary market, the Central Bank clears transactions between stakeholders with an account "Treasury" and a regular checking account in his books. Settlement is organized according to the principle of double reporting, the aim being to ensure the outcome of the simultaneous delivery of Treasury bills and cash settlement. Thus, for a given transaction, each Contracting Party shall notify the Central Bank, stating the main characteristics of the transaction.

The Central Depository (DC/BR) is responsible for the preservation and circulation of securities on behalf of issuers and financial intermediaries approved by the Regional Council for Public Savings and Financial Markets (CREPMF). It acts as settlement bank and may hold cash accounts negotiators.

It performs the following tasks:

  • Centralization conservation securities accounts on behalf of its members;
  • Regulation and delivery of stock exchange transactions, arranging for each SGI (Management Company and Intermediation);
  • Settlement of the balances arising from compensation relating to market transactions and payment products (interest, dividends, etc.) attached to the holding of securities;

The headquarter of the DC / BR is in Abidjan. It is represented in each Member State by a national antenna of the Stock Exchange.

Protection of investors

The Regional Council for Public Savings and Financial Markets (CREPMF) is the regulatory body of the WAEMU. Its mission is to protect savings invested in securities, financial products traded on the BRVM and other investments. 

To achieve the aims related to its mission, the CREPMF has the regulatory authorities, decision-making, monitoring, investigation and sanctions.

The DC/BR provides actuation of the Guarantee Fund in the event of a participant default.

Guide to Buying Bonds

Procedures for market participation

The frequency of auctions is determined by the states, together with the Central Bank. Each state cannot hold T-Bills and Government bonds auction more than once a week. For Treasury Bills, a calendar program specifying the instruments and their amounts and maturities, is published quarterly by the Minister of Finance in consultation with the Central Bank, and in consideration mainly the foreseeable revenue and government spending. Whereas Treasury bonds, an indicative issuance calendar specifying the instruments and their amounts and maturities, is set annually by the Minister of Finance in consultation with the Central Bank.

Each issuance should be advertised at least 7 days before the auction by describing the issuance characteristics. Bidders submit to the Central Bank, sealed in a ballot box reserved for this purpose, a submission form specifying the amounts and the interest rates or the price offered. Submissions may also be made electronically in the conditions defined by the Central Bank.

No later than one hour after the deadline of bids submission, the National Directions of the BCEAO transmit electronically, by fax or any other means of rapid communication accepted by the Central Bank, the main submissions to the principal agency of the BCEAO, which is organizing the auction.

Treasury bills are eligible for refinancing by the Central Bank. Investors and the Central Bank may buy or sell Treasury bonds on the secondary market, awarded by private treaty. In this context, they are required to post the purchase price and sale, which they are willing to transact.

Treasury bonds can be traded on the secondary market. As such, they can be exchanged at the Regional Stock Exchange (BRVM) or outside the BRVM.

Settlement cycle

The settlement date is T+1 for domestic operations and T+3 for operations between Members of the Union. This period can be modified by BCEAO. However, the contracting parties are free to agree on a minimum term above to unwind their operations. If the instructions given by the two parties are identical, the operation is definitely offset the value date agreed. In case of discrepancy between the evidences, the Central Bank suspends the transaction and notifies this decision to both parties for correction. Central Bank ensures the existence of adequate provisions before executing the compensation requested. Transmission to the Central Bank of notifications occurs in the selection of speakers, fax, telex, ordinary mail or any other means of rapid communication accepted by the BCEAO.


Treasury bills and Treasury bonds incomes are tax-free throughout the territory of the Member States of the WAEMU. But for non-members, the tax rates are different from one country to another. In Togo, the tax rate one securities income is equal to 6%.


Rating AgencyCurrent ratingOutlook
Moody’sNo ratingNo outlook
FitchNo ratingNo outlook
Standard and Poor’sNo ratingNo outlook

Primary Dealers

There is no appropriate Primary Dealers System in the WAEMU zone.

Subscription of Treasury bills is reserved to banks, financial institutions as well as regional financial institutions with an ordinary current account in the books of the Central Bank. Other investors, physical or legal persons, whatever their country of origin can also purchase Treasury bills in the primary market through banks located in the territory of the Union.

The primary subscription of Treasury bonds is restricted to banks, financial institutions, regional organizations and financial management company and intermediation (IMS). Other investors, physical or legal persons, whatever their country of origin may also purchase Treasury bonds on the primary market through banks and brokerage firms (SGI) located on the territory of the Union.

Market restrictions

Openness to international investors

The members of the zone are actively encouraging foreign investment. Foreign companies are free to invest and list on the regional stock exchange (BRVM), which is based in Abidjan and is dominated by Ivorian and Senegalese firms. 

Capital controls

There are no significant limits on foreign investment nor are there generally differences in treatment of foreign and national investors, either in terms of the level of foreign ownership or sector of investment.

Restriction on FX and profit repatriation

WAEMU has unified foreign exchange regulations. Under these regulations, there are no restrictions for transfers within the community, and designated commercial banks are able to approve routine foreign exchange transactions inside the community. The transfer abroad of the proceeds of liquidation of foreign direct investments no longer requires prior governments approval.