Since the founding of Popovi / Aného in the 17th century and of Lomé in 1877, the coast of Togo has been part of Atlantic trade, which has shaped the mentality of the south to this day. Regardless of whether cigarettes are sold in detail in the informal sector or whether goods are imported from overseas on a large scale and exported to neighboring countries: trade in general is one of the most important sectors of the economy. Togo has been a member of the WTO since 1995. Without the trade, there would have been no Togo colony.
The port in Lomé, which was expanded into a modern deep-sea port in the 1960’s with German financial help, is of great importance for Togo as a transit country for goods traffic with Mali, Burkina Faso and Niger. Togo also plays an important role in trade between economically important producers such as Nigeria, Ghana and the Ivory Coast.
According to hyperrestaurant, foreign trade is of central importance for the Togolese economy and is considered to be largely liberalized, but with considerable restrictions. However, according to the Index of Economic Freedom of the Heritage Foundation, freedom of trade fared better than freedom of investment and finance. Togo has four Free Export Zones (EPZ); three in Lomé and one in Kara, managed by the SAZOF company. The aim is to further promote foreign trade and to attract investors by granting privileges and benefits of a tax, financial and administrative nature. Since August 1, 2015, Togo’s foreign trade, which takes place via the container port, has been recorded by a computer system.
The port is one of the largest transshipment centers in the region for used vehicles from Europe. However, due to the immense increase in import tax, some of the importers are considering switching to the ports of neighboring countries. 566 ships sail under the Togolese flag worldwide, as the Direction des Affaires maritime reported.
Informal trade with neighboring countries is also widespread, as can be seen in the two articles on smuggling on the Ghana-Togo and Togo-Benin borders . The smuggling of petrol in particular brings the Togolese state an annual loss of 33 billion francs CFA. Togo also seems to be a hub for international drug smuggling. The government intends to better secure the maritime border in order to protect itself from piracy and drug smuggling.
The World Trade and Development Conference UNCTAD – United Nations Conference on Trade and Development published a number of reports and documents, including the World Investment Report 2019 with a data sheet on Togo. OEC World offers an overview of Togolese exports and imports. The total value of exports and imports related to merchanting was 105% of GDP (Heritage Index of Economic Freedom) in 2018. These were mainly petroleum products (from Nigeria), cotton (from Burkina Faso) and used cars (from Europe).
One of the “landmarks” of Lomé are the legendary Nana Benz, the fabric dealers with the car as a status symbol, who as wholesalers order the fabrics called Pagnes preferably in the Netherlands and from their warehouses in Lomé to a well-functioning network of middlemen in Togo and continue to act in neighboring countries. The Dutch company Vlisco, producer of the expensive, high-quality and highly valued wax materials (as a status symbol, roughly comparable to our earlier “trousseau”) serves a wealthy clientele today. In order to be able to sell the fabrics better, the dealers give them names that sound like wisdom or proverbs and that can contain certain messages.
To protect against cheaper Asian imitations and forgeries that are increasingly flooding the market, the Vlisco company signed an agreement with the Togolese customs authorities at the beginning of June 2013. Two of the successful and well-known retailers, Dédé Rose Creppy and Maggy Lawson, report on the entrepreneurial legacy of Nana Benz and how the new generation of fabric retailers is doing business with China in order to remain competitive.
Togo is a founding member of CEDEAO – Communauté Économique des États de l’Afrique de l’Ouest, the Economic Community of West African States (in English ECOWAS), which has just celebrated its 40th anniversary, and a member of the West African Economic and Monetary Union UEOMA with the Central Bank BCEAO. The common currency, the Franc-CFA – Communauté Financière Africaine, which dates back to the colonial era (Franc des colonies françaises d’Afrique), is pegged to the euro at a fixed ratio (€ 1 = 655.957 Francs CFA). It has been in existence for 70 years in 2015celebrated. This dependence on France is also viewed critically, even ‘Le Monde’ sees the Francs CFA as a brake on Africa’s development. The pros and cons and the future of the Franc CFA are discussed again and again.
Togo belongs to the Bourse Régionale des Valeurs Mobilières (BRVM), the regional exchange of the UEOMA, is a member of the African Development Bank Group and BOAD, the West African development bank based in Lomé. Ecobank was founded in 1985 by the chambers of commerce in several countries at the suggestion of CEDEAO / COWAS in Lomé, where it is also based. The Ora bank has quietly grown from Lomé into an important regional bank. In April 2016 Togo became the 40th member of the ‘Banque africaine d’import d’export’ Afreximbank and wants to campaign for African integrationget involved, as President Gnassingbé assured during his visit to Cairo, the seat of the Afreximbank, and organized the week of African integration for the first time.
The Fonds de GARI – Guarantee des Investissements Privés en Afrique de l’Ouest, based in Lomé, aims to financially support and promote the private sector in the countries of the CEDEAO. The Fagace – Fonds africain de garantie et de coopération économique is a little known to the public, instrument for guaranteeing loans, which was initiated by several countries and to which 14 West and Central African countries belong today.
The Réseau des Systèmes d’Information des Marchés en Afrique de l’Ouest – RESIMAO is an information network of the agricultural markets of the CEDEAO countries with the aim of contributing to food security and poverty reduction.
Economic relations with Ghana, Benin and Nigeria are to be intensified through the Zone d’alliance de la co-prospérité – COPAZ, founded in 2009. The Communauté Electrique du Bénin (CEB), which is operated jointly with Benin, already exists in the energy sector. The pipeline of the West African Gas Pipeline (WAGP) Project was completed in 2007 and supplies Benin, Togo and Ghana with Nigerian natural gas, but the balance is not particularly positive. Together with Ghana and Burkina Faso, Togo would like to simplify the border formalities.