4.2.2 Domestic debt
Until 1989, Togo's domestic debt was not significant. This
debt was partly due to technical and administrative problems and not to cash
tensions. But since 1990, as a result of socio-political unrest characterized
by the paralysis of economic activities and resource scarcity, the arrears have
increased. They went from 1.32 billion CFA francs in 1990 to about 396.508
billion CFA francs at 31 December 2008.
4.2.2.1 STRUCTURE
AND EVOLUTION OF DOMESTIC DEBT
4.2.2.1.1 Structure of the domestic
public debt
At 31 December 2008, the stock of the domestic debt of Togo
accounted for 32.29o/o to GDP. It consisted of a
commercial debt (18.40o/o) owed to private creditors and
public enterprises, financial debt (52.33°/0), which is the set
of financial aid granted by banks and public enterprises as well as the bond
loans, social debt (23.100/0) constituted of social
contributions owed to the National Social Security Fund and the Pension Fund of
Togo and finally, commitments and risks (6.16o/o) mainly
owed to the Central Bank of West African States and depositors of funds with
the Treasury of Togo.
Financial debt 54%
Social debt 22%
Commitments and risks 6%
Commercial debt 18%
Structure of Togo's domestic debt in 2008
- Graph NO 2 : Structure of Togo `s
domestic debt as at 31 December 2008
Source: Author based on data from the Directorate of
Public Debt
4.2.2.1.2 Comparative evolution of
Togo's domestic debt and budget deficit between 1990 and 2008
Domestic debt trended upward and budget deficit has been
stranding between 1990 and 2007.
Graph N0 3 : Comparative evolution of domestic
debt and budget deficit between 1990 and 2003
Comparative evolution of domestic debt and budget deficit
between 1990 and 2008
Billion CFA francs
Year
Budget defict
Domestic public debt
Source: Author based on data from the Directorate of
Public Debt
The opposite evolution reflects the close link between budget
deficit and debt. Both clusters have evolved unevenly.
The causes of massive increase in domestic debt are mainly
lower raw materials prices (coffee, cocoa, cotton, phosphates), the Gulf war,
the low level of tax revenue, the prices charged by suppliers, suspension of
cooperation with the European Union (EU) and the accumulation of arrears.
Domestic debt is thus a real obstacle to the resumption of
growth.
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