COUNTRY HIGHLIGHTS Togo 2016 The World Bank Group conducted face-to-face interviews with top managers and business owners of 150 enterprises in Togo from July 2016 through November 2016. The Enterprise Survey (ES) sample is representative of Togo’s formal private sector. The ES covers several aspects of business environment along with measures of firm performance. Below are the main highlights from the survey. Firm performance in Togo is positive and higher than comparators 12 12 Between 2013 and 2015 firms in Togo experienced 10 positive performance. Real annual sales growth doubled 10 8 from 5% during the period 2005-2008 to 10% in 2013- 6 8 2015. This is in contrast with the average negative Percentage Percentage 4 growth rate for firms in economies in the same income 6 2 group (-3.8%). Annual employment growth was also 4 0 positive (8%), despite a small decrease compared to Real annual sales growth (%) -2 2013-2015 when it was 9.5%. Despite this small 2 -4 2016 TOGO ENTERPRISE SURVEY contraction, firms in Togo still outperformed the -6 0 average annual employment growth for firms in low Annual employment growth (%) income economies (6.3%). Togo2016 Togo2009 Low Income Firms also have better access to financial services The share of firms that have a loan or line of credit has 45 45 doubled between 2009 (22%) and 2016 (42%). The 40 40 percentage of firms using banks to finance working 35 35 capital also increased from 17% in 2009 to 40% in 2016. 30 30 Percentage Percentage On average, firms in Togo have better access to finance 25 25 20 20 than firms in comparators economies. The percentage 15 15 of firms with a bank loan or line of credit in countries in 10 10 the same income group is 22%—roughly half that of 5 5 Togo, and the percentage of firms using banks to 0 0 finance working capital in the low income group is 24%, Percent of firms with a bank Percent of firms using banks to loan/line of credit finance working capital also almost half that of Togo. Togo2016 Togo2009 Low Income The regulatory environment is more difficult for firms in Togo than in comparator economies In 2016, firms in Togo spent more time dealing with 90 12 government regulations and obtaining licenses than in 80 10 2009. The percentage of firms that met with tax officials 70 increased from 67% in 2009 to 77% in 2016. The 60 8 Percentage Percentage percentage of senior management’s time spent dealing 50 6 with regulations (“time tax”) also increased, from 3% in 40 30 4 2009 to 10% in 2016. On average, the regulatory and tax 20 burden on firms in Togo is higher than the average for 2 10 comparator economies. In low income economies, on 0 0 average, 70% of firms met with tax officials and time tax Percent of firms that were visited Senior management time spent in was on average was 8.5 percent —lower than in Togo. or required to meet with tax dealing with requirements of officials government regulation(%) Togo2016 Togo2009 Low Income Corruption in Togo has declined since 2009 The share of public transactions that was 25 accompanied by the request of a gift or informal 20 payment (bribery depth) decreased substantially from 19% in 2009 to 7% in 2016. The share of firms that 15 Percentage experienced at least one bribe payment request across six transactions involving access to utilities, 10 permits, licenses, and taxes (bribery incidence) also decreased, equally substantially, from 16% in 2009 to 5 5% in 2016. Firms in Togo face lower bribery depth 0 and lower bribery incidence rates than firms on Bribery depth (% of public Bribery incidence (% of firms average in low income economies (18% and 24%, transactions where a gift or experiencing at least one bribe informal payment was requested) payment request) respectively). Togo2016 Togo2009 Low Income Increase in imports has been accompanies by delays The percent of firms using material inputs or supplies 90 25 of foreign origin increased substantially, from 72% in 80 20 2009 to 81% in 2016, suggesting improved 70 2016 TOGO ENTERPRISE SURVEY performance in international trade. At the same time, 60 15 the number of days it takes to clear imports from 50 Percentage Percengate customs more than doubled, increasing from 8 in 40 10 2009 to 19 in 2016. Togo’s average of 19 days to clear 30 imports through customs is the same as the average 20 5 for low income economies. Yet, in terms of the 10 prevalence of firms that use inputs of foreign origin, 0 0 Togo substantially outperforms average for low Percent of firms using material Days to clear imports from customs inputs and/or supplies of foreign income economies, 81% in Togo compared with origin 64% for low income average. Togo2016 Togo2009 Low Income Firms consider tax rates as the biggest business environment obstacle facing firms in Togo Among 15 areas of the business environment, 26% Tax rates Access to finance of firms in Togo chose tax rates as the biggest Political instability obstacle to their daily operations. Access to finance Tax administration Informal competitors and political instability are the second-most and Electricity Corruption third-most frequently cited top obstacle among 24% Customs & trade regulations and 9% of firms respectively. In 2009, access to Transport Crime, theft and disorder finance was identified as the biggest obstacle by firms Poorly educated workers Togo2016 in Togo (24%), immediately followed by political Courts Togo2009 Licensing and permits instability (23%). In contrast, only 7% of firms cited Access to land tax rates as the biggest obstacle in 2009. Labor regulations 0% 5% 10% 15% 20% 25% 30% Percentage of firms The Enterprise Analysis Unit is a joint World Bank and IFC team of economists, survey experts specialized in private sector development. Surveys implemented by the team reveal what businesses and firms experience across the world by interviewing representative samples of the formal, non-agricultural, non-extractive, private sector with 5 employees or more. The resulting globally comparable firm-level data is used to construct business environment indicators and measure firm performance. The findings and recommendations help policy makers identify, prioritize, and implement policy reforms that support efficient private economic activity. For more information on the survey visit http://www.enterprisesurveys.org Generated using Enterprise Survey data as of September 11, 2017