HOW FRAGILE COUNTRIES CAN INCREASE REVENUE AND LEVERAGE FLOWS FROM EXTERNAL SOURCES TO FINANCE DEVELOPMENT TOWARDS THE ACHIEVEMENT OF SDGs. IN THE CASE OF TOGO.

1. FINANCING SOLUTIONS TO ADDRESS THE DEVELOPMENT GAPS IN TOGO, TOWARDS THE
ACHIEVEMENT OF THE SUSTAINABLE DEVELOPMENT GOALS (SDGs)
Raising adequate funds to finance development still remains a challenge which hinders the efforts of
governments and international bodies in reducing the development gap (inequalities) between rich
and poor countries. For fragile countries to achieve the Sustainable Development Goals, focus
should be put on how external and internal flows from Official Development Assistance (ODA),
International Development Association (IDA), Multinational Development Banks (MDBs)
International Monetary (IMF), government and private sector can be multiplied through effective
government spending to increase funds for development finance.
GEOGRAPHIC LOCATION AND DEMOGRAPHY OF TOGO
Togo is a developing country located in the western part of Africa and shares boarders with Burkina
Faso to the North, Benin to the East and Ghana to the west. The population of the country is about
7.3 million with demographic growth rate of about 3% (World Bank Group, 2016). About 60.4% of
the population forms the rural population as against urban population of 39.6%. The rural
population is projected to drop for urban population to increase to 50% by 2030 (African
Development Bank Group, 2015).
DEVELOPMENT ISSUES AND FINANCING SOLUTIONS
Extreme poverty is a major development issue in Togo with about 69% of rural households living on
less than $1.25 a day. The female rural household heads are the group mostly affected by poverty
due to the difficulty of them getting access to economic opportunities such as credit from financial
institutions (World Bank Group, 2016). The financing solutions to address the issue include;
 Accessible Loans: Banks and microfinance companies should make loans accessible by;
reducing documentation, deposit and collateral requirements to enable rural population
especially women gain access to funds to start up businesses, expand agriculture production
and acquire lands for farming (AfDB, 2012 as cited in Heinrich- Fernades, 2016, p. 28).
 Involvement of rural population by private companies and businesses in an inclusive
business approach. This approach would help create economic opportunities and expand
access to basic products and services. The approach would also integrate the rural poor as
customers, retailers and distributors of the products produced by private business at an
affordable price. This would create jobs for rural population and also expand the market
base of the private businesses.
The rural farmers can also be integrated as suppliers of raw materials to agribusinesses and
processing industries whiles the agribusinesses also provide farmers access to farm
technology, fertilizers and seeds (World Bank Group, 2016).
 The involvement of private philanthropy such as NGOs and corporate institutions, through
the formulation of policies and regulations by government, would attract and require these
actors to invest in the provision of social amenities such schools, hospitals, potable water in
rural areas. This would help reduce the rural urban gap in social infrastructures.

2. The reliance on external government and foreign funds to finance development infrastructure, has
been a major cause of the rise in government debt from 46.0% of GDP in 2012 to 62.5% in 2016
(African Development Bank Group, 2015).The financing solutions to address this obstacle include;
 Involvement of MDBs and IMF in the provision of technical assistance, guidance and advice
on macroeconomic policies and capacity building for both government and private sector.
This type of support would improve macroeconomic stability, attract investors and provide
employment to citizens in Togo
 Leveraging some of the grants and concessional loans received from ODAs, IDAs and MDAs
to invest in a robust IT tax system. This system would help ease the registration of clients
especially in the informal sector, keep record of all tax payers and generate the total tax
revenue government should expect monthly and yearly. This would aid the National Tax
Office monitor progress of tax payment and track tax defaulters and evaders for payments at
a fine. This reform will complement the efforts of the National Tax Office and Corruption
prevention unit (AfDB, 2015).
 Improvement in Business Environment: This would be through the establishment of a
National Investment Promotion Unit with the mandate to formulate investment policies and
identify specific projects and viable business opportunities that private and foreign direct
investors could invest in. The government should also formulate action plans that would
improve the period for land property registration and access to finance aside the efforts
previously made to reduce the period for business registration (IMF, 2015).
Another development obstacle Togo faces is with the volatile nature of agriculture production. In
2015, agriculture growth fell from 14% in 2014 to 2% (World Bank Group, 2015). The financing
solution to address the problem includes;
 Investment of grants and public funds to construct and improve transport systems, extend
electricity to rural areas, import varieties of climate resistance seeds and crops, construct
dams for irrigations, subsides the prices of farm machinery and other inputs. This would
increase agriculture production for local consumption and exportation.
 Institutional investors such as insurance and pension trust institutions investment in
agriculture warehouse and storage facilities as practiced in Uganda using the receipt system.
This project would help preserve agriculture products and secure farmers against loses
(World Bank, 216 cited in: Heinrich- Fernades, 2016, p.29).
The balance of payment deficit in 2015 fell from 10.1% to -9.8 % (AfDB, 2015). This issue was due to
the exportation of low value- added products such as cotton and cocoa as against the importation of
value added product and high value product such as petroleum (IMF, 2015). The ways to improve
importation to increase revenue include;
 Investment in industrialization. Togo is fortunate to have cash crops and natural resources
such as cocoa, cotton, clinker etc. which needs value addition by industries. Government
should therefore focus on investing some of its revenue and leverage concessional and non-
concessional loans from IDA, ODA, insurance companies and pension trust to finance
additional Industries for the production of clothes, processed food, cleaning detergents
among others.
 The formulation of import and export policies such as lifting or reducing import duties on
the importation of industrial and agriculture machinery and exportation of value added

3. products and tax exemptions that would attract Foreign Direct Investors to the industrial
sector.
 Public and Private Partnership in the provision of educational infrastructure and
implementation of policies such as free universal primary education would help develop
human resources needed for industrial operations and productivity.
REFERENCES
African Development Bank Group (2015). African Economic Outlook (AEO) 2015. African
Development Bank, 01 BP 1387 Abidjan 01, Côte d'Ivoire
Heinrich- Fernades M. (2016). How to Create an Enabling Environment for Inclusive Business.Donor
Committee for Enterprise Development, United Nations, New York- USA.
International Monetary Fund (2015).2015 Article IV Consultation- Press Release; Staff Report; and
Statement by the Executive Director for Togo. IMF Country Report No. 15/309, Washington D.C
20431 USA
Multilateral Development Banks, International Monitory Fund, & World Bank Group (2015). From
Billions to Trillions: Transforming Development Finance Post- 2015 Financing for Development:
Multilateral Development Finance, DC2015-0002
World Bank Group (2016). Togo Overview (2016) Retrieved on March 26, 2016
fromhttp://www.worldbank.org/en/country/togo/overview
World Bank Group (2016). What is Inclusive Business? Opening Learning Campus:
https://olc.worldbank.org/
.