Agricultural Investment Briefing: Togo

1. Executive Summary of the Agricultural Sector

Togo's agricultural sector represents a significant portion of its GDP and employs a substantial part of the population. While predominantly rain-fed and reliant on traditional farming practices, the sector holds immense potential for modernization and increased productivity. Key crops include cotton, cocoa, coffee, maize, cassava, and yams. The Government of Togo has identified agriculture as a priority sector for economic development, actively seeking foreign investment and expertise to enhance value chains, improve infrastructure, and promote sustainable farming practices. Opportunities exist across the value chain, from primary production to processing and export, with a focus on enhancing yields, reducing post-harvest losses, and developing higher-value agricultural products.

2. Key Statistics

• Contribution to GDP: Agriculture accounts for approximately 40% of Togo's GDP.
• Employment: Over 60% of the workforce is engaged in agricultural activities.
• Major Export Commodities: Cotton, cocoa, coffee.
• Agricultural Policies: National Agricultural Investment Program (PNIA) aims to increase agricultural productivity and improve food security.
• Challenges: Limited access to finance, inadequate infrastructure, dependence on rainfall, smallholder farming dominance, and climate change vulnerability.
• Opportunities: Development of irrigation systems, improved seed varieties, enhanced fertilizer use, adoption of modern farming techniques, and development of agro-processing industries.

3. Strategic Opportunities for Integrated Agropoles

The development of integrated agropoles presents a strategic opportunity to transform Togo's agricultural sector. Agropoles can serve as hubs for agricultural production, processing, and marketing, fostering economic growth and creating employment opportunities. Potential areas for investment include:

• Cocoa Processing: Establishing processing facilities to produce higher-value cocoa products, such as cocoa butter, powder, and chocolate, for both domestic and export markets. This would leverage Togo's cocoa production capacities.
• Cotton Ginning and Textile Manufacturing: Expanding cotton ginning infrastructure and developing textile manufacturing facilities to add value to Togo's cotton production. This would reduce reliance on exporting raw cotton and create jobs in the manufacturing sector.
• Horticulture Development: Investing in the production and processing of fruits and vegetables for both domestic consumption and export. This would require the development of irrigation systems, cold storage facilities, and efficient transportation networks.
• Livestock Farming and Processing: Developing modern livestock farming operations and establishing processing facilities for meat and dairy products. This would require investment in animal feed production, veterinary services, and cold chain infrastructure.
• Maize and Cassava Processing: Establishing facilities for processing maize into flour and cassava into starch and other products for both domestic and export use. Focus on drought resistant and highly yielding strains.
• Infrastructure Development: Investments in roads, irrigation systems, storage facilities, and energy infrastructure are crucial to support the development of agro-processing industries. Consider renewable sources for reliable, cost-effective power.

4. Legal & Regulatory Framework for Foreign Investment

The Government of Togo actively encourages foreign investment in the agricultural sector and has implemented several measures to facilitate investment. Key aspects of the legal and regulatory framework include:

• Investment Code: Provides incentives for foreign investors, including tax exemptions, reduced customs duties, and streamlined procedures for obtaining permits and licenses.
• Land Ownership: Foreign investors can lease land for agricultural purposes with lease terms up to 50 years. Land laws are undergoing reforms to clarify land tenure and facilitate investment.
• Taxation: Corporate income tax is generally levied at a rate of 27%. There are specific tax incentives for companies investing in priority sectors, including agriculture.
• Repatriation of Profits: Foreign investors are generally allowed to repatriate profits and capital freely, subject to compliance with foreign exchange regulations.
• Dispute Resolution: Togo is a member of the OHADA (Organization for the Harmonization of Business Law in Africa), which provides a harmonized legal framework for business activities.
• Investment Promotion Agency: The Investment Promotion Agency (API-TOGO) provides support to foreign investors, including assistance with obtaining permits and licenses, identifying investment opportunities, and navigating the regulatory environment. Investors should proactively engage with API-TOGO.