S&P Upgrades Togo’s Sovereign Rating to B+ on Growth, Fiscal Reform

BREAKING NEWSApril 24, 2025 at 11:48 AM UTC

TLDR

S&P Global Ratings has upgraded Togo’s long-term local and foreign currency sovereign credit ratings to B+ from B, with a stable outlook
The agency expects Togo’s GDP to grow by an average of 6% annually from 2025 to 2028, supported by fiscal reforms, investment in infrastructure, and ongoing international support
However, challenges remain, including low GDP per capita and security risks in northern regions

S&P Global Ratings has upgraded Togo’s long-term local and foreign currency sovereign credit ratings to B+ from B, with a stable outlook. The agency expects Togo’s GDP to grow by an average of 6% annually from 2025 to 2028, supported by fiscal reforms, investment in infrastructure, and ongoing international support.

S&P cited Togo’s improved external debt position, driven by concessional financing from multilateral partners and declining reliance on high-cost regional market borrowing. The agency noted that Togo’s cost of debt remains among the lowest in its peer group, at 2.6% of GDP.

The government is targeting a fiscal deficit of 3% of GDP by 2027. Debt-to-GDP is projected to fall below 60% by 2028. However, challenges remain, including low GDP per capita and security risks in northern regions. The outlook is stable, reflecting expectations of continued economic growth, fiscal discipline, and gradual diversification of the economy.

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Key Takeaways

Togo’s upgrade reflects confidence in its economic direction, underpinned by pro-business reforms, improved tax collection, and investment in manufacturing and logistics. Major projects include port and airport expansion and the development of the Adétikopé industrial platform. With inflation projected to stay below 3% and foreign aid supporting macroeconomic stability, Togo has shown resilience amid global shocks. The IMF and World Bank remain key partners, providing budget support and concessional loans. Yet structural weaknesses persist. GDP per capita is projected to remain under $1,400 through 2028, and the informal economy limits revenue mobilization. Security threats in northern regions may also drive up defense spending, complicating fiscal targets. Continued access to concessional financing, steady reforms, and regional integration under WAEMU will be essential for Togo to sustain momentum. S&P's upgrade provides a signal to investors, but lasting gains will depend on how reforms translate into inclusive, broad-based growth.

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