Togo： An Attractive Destination for Foreign Investors

--本文原刊载于环球网（Huanqiu.com）“西非漫谈”栏目

链接：https://opinion.huanqiu.com/article/4CfmkESMMR2

（【西非漫谈】2023年第4期，总第71期。作者：电子科技大学西非研究中心团队；执笔人：Koffi Dumor（电子科技大学西非研究中心团队成员）；译者：洪菱（外国语学院）；校对：曾佳锐（外国语学院）；整理：孟雅琪、黄锐（公共管理学院）；供稿：电子科技大学西非研究中心团队。）

Togo, located in West Africa, is among the smaller countries in the region but boasts a range of diverse landscapes and multiple bioclimatic zones. The northern region of Togo experiences a seasonal Sudanian climate with a single rainy season. Meanwhile, the Atacora mountain range spans across central Togo, exhibiting diverse wooded landscapes and a limited number of isolated remnants of dense tropical forest.

The coastal area of Togo, despite its relatively dry savanna zone known as the Dahomey Gap, plays a crucial role in separating high rainfall regimes outside the country in East and West Africa. Togo's economy heavily relies on its natural resources and food crops, such as cacao, coffee, and cotton, which are primary sources of economic growth. Additionally, the Agriculture and Mining sectors are the major drivers of the country's economy. It is worth noting that Togo is one of the world's leading producers of phosphates, limestone, and minerals, which further reinforces its status as a key player in the global extractive  industries.

Source: Author from https://www.britannica.com/place/Togo

Production and Impacts of the Mining Industry

In 2013, Togo's output of phosphate totaled 1.2 million tons, of which 7.5% constituted the country's exports. Over the last few decades, there has been a notable rise in the production of clinker, limestone, and hydraulic cement. The commissioning of the clinker plant in 2015 enabled the production of 5,000 tons of clinker per day, equating to an estimated 1.5 million tons annually. Togo possesses a variety of regions containing deposits of diamonds and gold, in addition to limestone mining activities in the Tabligbo basin situated near the coast.

Togo's diverse range of soils and climatic conditions create favorable conditions for the cultivation of a wide array of products. The mining and quarrying sectors dominate the country's natural resource industry, with phosphate ranking as a primary mineral resource and a top export product. Furthermore, significant reserves of limestone near Lomé are predominantly utilized for cement production. Additionally, Togo possesses a substantial amount of marble deposits.

Togo boasts an array of other mineral resources with promising commercial potential, including but not limited to iron ore, bauxite, uranium, chromite, gold, diamonds, rutile (titanium dioxide), manganese oxide, and kaolin (China clay). Although iron ore reserves are substantial, the metal content is at most 50%. While more than three-fifths (3/5) of the electricity generated in Togo is hydroelectric, petroleum remains a crucial energy source to meet the demands of the population. As of 2016, Togo's GDP amounted to $4.39 billion, a figure that increased to $4.767 billion in 2017, ranking the country as the 156th highest GDP in the world. Togo is endowed with a wealth of natural resources within its borders, including arable land, breathtaking scenery, minerals, and forests.

Source: Author from https://www.togofirst.com/fr/mines/1708-6059-les-donnees-minieres-du-togo-sont-desormais-accessibles-en-ligne

1.Arable Land

Based on the CIA World Factbook, as of 2011, the arable land in Togo represented 5.2% of the total land area. This arable land is utilized for cultivating a diverse range of crops, and subsistence farming is the mainstay of the country's economy. Some of the crops grown include cocoa, coffee, yams, cotton, cassava, beans, corn, rice, sorghum, and millet, among others. The production of both cash and food crops in the country accounts for a significant proportion of the labor force and contributes about 42% of the total GDP(see, Mawussi G.(2008)

Source:https://www.researchgate.net/publication/37244076_Bilan_environnemental_de_l%27utilisation_de_pesticides_organochlores_dans_les_cultures_de_coton_cafe_et_cacao_au_Togo_et_recherche_d%27alternatives_par_l%27evaluation_du_pouvoir_insecticide_d%27extraits_de_pl

2.Minerals

Togo has emerged as a significant player in the mineral industry, with a major focus on the production of limestone, gold, and diamonds. The country possesses abundant reserves of minerals, including iron ore, gypsum, bauxite, manganese, zinc, rutile, marble, and others, which remain untapped. (Please refer to the chart depicting Togo's Minerals Production from 2009 to 2020 for more details.)

Source: https://www.ceicdata.com/en/indicator/togo/minerals-production

· The annual report on Togo's gold production as of December 2020 recorded a stable output of 20,000.000 kg compared to the same period in 2019.

· According to data updated yearly from December 2008 to 2020, Togo's gold production averaged 18,551.000 kg with a total of 13 observations.

· The highest recorded amount of gold production was in 2013 with 21,086.000 kg while the lowest was in 2010 with 10,452.000 kg. This data is considered active status in CEIC and is reported by the U.S. Geological Survey.

· It falls under the World Trend Plus’s Association: Metal and Mining Sector – Table WB. USGS.GOLD: Precious Metals: Gold: Production by Country or Locality.

Source: https://www.ceicdata.com/en/indicator/togo/gold-production

3.Phosphate production

Phosphate is one of the most essential minerals in Togo, with the country possessing reserves of around 60 million tons. This mineral occurs naturally in rocks that have a high concentration of phosphate minerals, which are categorized into various types, such as triphylite, monazite, hinsdalite, vanadinite, erythrite, and others.

Phosphate mining plays a crucial role in Togo's mining industry, positioning the West African nation as the 19th largest mineral producer globally. Sedimentary phosphate is typically found in unconsolidated sedimentary rocks in open pits, which are mined on a small scale using dredge lines and machinery. In 2013, Togo produced approximately 1.2 million tons of phosphates, accounting for 7.5% of its total exports. Additionally, several other phosphate mines are located in different regions and are overseen by the Ministry of Mines and Energy.

Meanwhile, output from Togo's existing phosphate mines rose by 22.3% in 2012, to 926,500 tonnes, a six‑year high, according to the latest Franc Zone report from Banque de France. Output fell from a recent high of 1.47m tonnes in 2003 to 695,200 tonnes in 2010 because of underinvestment and weak management, but has since been on a rising trend, underpinned by fresh investment from the state-owned Société nouvelle des phosphates du Togo (SNPT). A US$150m expansion program launched in 2010 has seen the arrival of new mining equipment (such as specialist loading vehicles), although SNPT's initial target of lifting production to 1.5m tonnes/year by 2013 is unlikely to have been realized. A strike by workers demanding higher wages brought output to a brief halt in October but was quickly settled. The benefits of rising production have been partly offset by the decline in world phosphate prices from a recent peak of about US$200/tonne in early 2012 to about US$120/tonne in October 2013. Nonetheless, prices remain higher than the estimated cost of production in Togo of about US$70/tonne.

Source:http://country.eiu.com/article.aspx?articleid=1621318146&Country=Togo&topic=Economy&subtopic=Fore_7

4.Limestone

Togo has substantial reserves of limestone, mainly located in the capital region of Lomé. This mineral is extracted from quarries through rock excavation, which can be carried out on the surface or underground. The location of extraction plays a role in determining the composition of the stone. The Ministry of Mines has overseen the mining of limestone in Togo for many years, and the abundant reserves have contributed to a steady increase in annual production.

The extraction process occurs on-site, and trucks transport the limestone to factories. The mineral is crushed or cut into blocks according to the end-users requirements. Togo's limestone reserves are primarily utilized in cement production facilities and for other construction materials, including mortar and slaked lime.

5.INVESTMENT POTENTIAL IN TOGO’S NATURAL RESOURCES & MINING INDUSTRY

The mining industry and natural resources are vital for the economic development of Togo. Arise IIP is committed to supporting the expansion of these sectors to promote diversification and ensure long-term sustainability. Despite being a small West African nation, Togo boasts abundant natural resources that offer significant investment opportunities. Its mining industry is a critical component of the country's economy, contributing substantially to its Gross Domestic Product (GDP).

The primary focus of Togo's mining industry is phosphate, which is the country's most significant natural resource. Togo has some of the largest phosphate reserves on the continent, and it ranks as the fifth-largest producer of this mineral in the world. The government has made substantial investments in modernizing the mining industry, creating favorable conditions for investment and fostering partnerships with international mining companies.

In recent years, Togo's mining industry has attracted significant foreign investment. The government has taken steps to increase transparency and improve the legal and regulatory frameworks governing mining activities, making the investment environment more attractive to potential investors. Additionally, Togo has an open-door policy towards foreign investors, making it an appealing destination for those interested in investing in the mining sector.

In addition to phosphate, Togo possesses other mineral resources with investment potential, such as gold, diamonds, and iron ore. The nation's considerable unexplored mineral resources present substantial investment prospects for both domestic and international investors.

Apart from the mining industry, Togo's natural resources offer investment prospects in the field of agriculture. The nation has a beneficial climate and fertile soil that is appropriate for growing diverse crops such as cotton, coffee, cocoa, and cashew nuts. The government has taken measures to enhance agricultural productivity and increase exports, by providing encouragement and assistance to investors who are interested in this sector.

Those who invest in Togo's natural resources and mining industry have the potential to reap substantial returns on their investment. The government's dedication to modernizing the sector, creating a favorable investment climate, and enticing foreign investment has established an environment that is advantageous to investors. Togo's plentiful natural resources and unexplored potential present significant investment possibilities for those who are willing to take the initiative and invest in the nation.

6. What to consider if you invest in Togo

Investing in Togo, like any other country, requires careful consideration and analysis of various factors that can affect the return on investment. Here are some of the things to consider.

1. Economic Indicators: It is important to analyze Togo's economic indicators, such as the GDP growth rate, inflation rate, unemployment rate, and other factors that can affect the investment climate.

2. Infrastructure: Togo has been investing in infrastructure, including roads, ports, and airports, to improve its business climate. It is important to consider the availability and quality of infrastructure when investing in Togo.

3. Investment Incentives: The Togolese government has implemented several investment incentives, including tax breaks and reduced import duties, to encourage foreign investments. It is important to research and understands these incentives to determine their benefits and eligibility.

4. Market Potential: Togo's population of approximately 8 million people represents a potential market for investors. It is important to analyze the market potential, including consumer behavior and purchasing power, to determine the viability of investing in Togo.

5. Regulatory Environment: The regulatory environment in Togo is relatively stable, but investors should be aware of the legal and regulatory frameworks governing their industries and investments.

7. Why China should expand investment in Togo

Togo investment advantage

Togo, located on the western coast of Africa, presents itself as a promising investment hub among various African nations. The country boasts abundant natural resources, such as marble, attapulgites, manganese, limestone, iron, peat, gold, and uranium, and notably, a significant phosphate deposit that accounts for over 40% of its export revenue.

Regarding investments, the Togolese Government is making a lot of effort to address the lack of infrastructure. Additionally, they are providing opportunities for diverse cooperation in terms of capacity, as well as a low-cost, proficient workforce that has the potential to reduce production costs.

Togo is recognized for having the sole deepwater port in West Africa, which includes three terminals equipped to fulfill the needs of the newest and biggest cargo ships, along with advanced machinery. Consequently, the nation has become a significant hub for logistics, distribution, and commerce within the sub-region.

China-Togo: Trade Valued at $380 Million in H1 2021

Source:https://www.togofirst.com/en/investments/2408-8359-china-togo-trade-valued-at-380-million-in-h1-2021

In the second session of the Joint Commission for Cooperation between Togo and China, Qian Keming, China's Deputy Minister for Trade, revealed that the trade between the two nations reached $380 million in the first half of 2021. This amount signifies the increasing trade collaboration between the two countries and the immense possibilities it holds.

Reference:

Guerrera, F., Martín-Martín, M., Tramontana, M., Nimon, B., & Essotina Kpémoua, K. (2021). Shoreline changes and coastal erosion: The case study of the coast of togo (bight of benin, west africa margin). Geosciences, 11(2), 40.

Cisse, L., & Mrabet, T. (2004). World phosphate production: overview and prospects. Phosphorus Research Bulletin, 15, 21-25.

Mawussi, G. (2008). Bilan environnemental de l'utilisation de pesticides organochlorés dans les cultures de coton, café et cacao au Togo et recherche d'alternatives par l'évaluation du pouvoir insecticide d'extraits de plantes locales contre le scolyte du café (Hypothenemus hampei Ferrari) (Doctoral dissertation.