Togo – Joint World Bank-IMF Debt Sustainability Analysis

Overview & Synopsis

This Debt Sustainability Analysis (DSA) assesses Togo to be at moderate risk of both external debt distress and overall public debt distress, unchanged from the last DSA.2 Two breaches of the external debt service-to-revenue threshold in the baseline over 2026-27 signal a higher risk but judgement is applied to maintain an assessment of moderate risk. This is because the breaches reflect the rollover of a single loan on the same terms that does not involve cash outlays. All other DSA ratios remain below the indicative benchmark and thresholds under the baseline and stress tests. Debt is considered sustainable because (i) the present value (PV) of public debt to GDP remains below the benchmark, and all but one external DSA indicators remain below their respective thresholds under the baseline scenario and stress tests throughout the projection period; (ii) all DSA indicators trend downwards over the medium term; and (iii) Togo’s access to the WAEMU market and support from regional debt institutions bolster the country’s financing options and debt management capacity. The authorities should continue revenue mobilization efforts, reduce near-term liquidity risks, and build space to absorb shocks; step up efforts to contain non-deficit drivers of debt accumulation and reduce fiscal risks from underperforming SOEs; and pursue structural reforms to encourage more FDI and boost exports