Documentof The WorldBank FOROFFICIALUSEONLY ReportNo. 45004-TG REPUBLIC OF TOGO EnhancedHeavily IndebtedPoor Countries(HIPC) Initiative PreliminaryDocument September 2,2008 ~This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not otherwise be disclosed without World Bank authorization. INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL MONETARY FUND TOGO EnhancedHeavily IndebtedPoor Countries(HIPC) Initiative PreliminaryDocument Preparedby the Staffs of the International Development Association andthe International Monetary Fund Approved by DannyLeipziger and Obiageli K. Ezekwesili (IDA) and Thomas Krueger and Adnan Mazarei (IMF) September2. 2008 Contents Page Executive Summary................................................................................................................... i I.Introduction........................................................................................................................... 1 I1.Background andEligibility for HIPC InitiativeAssistance................................................. 1 A.PRGF andIDA Status...................................................................................................... 1 B.Poverty and Social Issues................................................................................................. 3 C.PolicyTrack Record......................................................................................................... 4 I11 Macroeconomic Outlook .................................................................................................... . 5 IV.DebtReliefAnalysis andPossible HIPC andMDRIAssistance ....................................... 7 A.DebtReconciliation Status............................................................................................... 7 B.Structure ofExterna1Debt................................................................................................ 8 C.PossibleAssistance under the HIPC Initiative................................................................. 9 D.PossibleAssistance underMDRI................................................................................... 12 E.Impact ofHIPC andMDRIDebtReliefonDebt Ratios and Sensitivity Analysis........13 V.The DecisionandFloatingCompletion Points.................................................................. 14 A. PossibleDecision Point Timing..................................................................................... 14 B. PossibleTriggers for the FloatingCompletion Point..................................................... 14 C. MonitoringPublic Spending Following Provision ofH P C Assistance ........................ 16 VI. Issues for Discussion........................................................................................................ 17 FOR OFFICIAL USEONLY Tables Table 1: Medium- to Long-Term Macroeconomic Framework, Selected Indicators, 2007-27................................................................................................ 7 Table 2: Togo: Nominal Stocks andNet Present Value o fDebt at end-2007 by Creditor Groups.................................................................................................................................. 9 Table 3: HIPC Initiative Assistance Undera ProportionalBurden-Sharing Approach...........10 Boxes Box 1:Arrears Clearance......................................................................................................... 12 Box 2: Togo - Proposed Triggers for the Floating Completion Point..................................... 15 Box 3: Possible Medium-Term Expenditure Priorities........................................................... .17 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. LISTOFACRONYMS AfDB African Development Bank AfDF AfricanDevelopment Fund AFRITAC-West Africa Technical Assistance Center-West (Bamako) BADEA Arab Bank for Economic Development inAfrica BCEAO Central Bank of West African States BOAD West African Development Bank CBAO Eastern Africa BankingCompany DSA Debt Sustainability Analysis ECOWAS Economic Community o f West African States EIB European Investment Bank EITI Extractive Industries Transparency Initiative EPA Economic Partnership Agreement EPCA EmergencyPost-Conflict Assistance EU European Union FED European Development Fund FEGECE FundofAid ando fLoans Guarantee ofthe Agreement Council FSF Fragile States Facility (AfDB) FSAP Financial Sector Assessment Program GFS Government Finance Statistics HIPC Heavily IndebtedPoor Country IFAD International Fundfor Agricultural Development IDA InternationalDevelopment Association IMF International Monetary Fund IsDB Islamic Development Bank LIC Low-income country MDG MillenniumDevelopment Goal MDRI Multilateral Debt ReliefInitiative NPV Net Present Value OFID OPEC Fundfor InternationalDevelopment PEMFAR Public ExpenditureManagement and Financial Accountability Review P F M Public Financial Management PRGF Poverty Reduction and GrowthFacility PRSP Poverty Reduction Strategy Paper WAEMU West African Economic andMonetary Union i EXECUTIVE SUMMARY After more than a decade with limitedexternal assistance, Togo has made significant progress on political and economic reforms, and has regularized its relations with key development partners, including IDA, the IMF,the African Development Bank (AfDB), and the EuropeanUnion (EU).Economic performance has been improving though the country has been strongly affected by the recent surge in food and fuel prices. As a consequence o f the extended political crisis, interruption inforeign aid and the economic decline, Togo's social indicators remain among the lowest inthe world. Togo's public- andpublicly-guaranteed external debt was estimated at US$2.2 billion as o f end-December 2007 (US$1.4 billion inNPV terms after assuming full application o f traditional debt reliefmechanisms). A preliminaryDebt ReliefAnalysis (DRA) shows that Togo meets the HIPC Initiative indebtedness criterion under the fiscal window based on end- 2007 data. HIPC debt reliefi s estimated at US$270 million inNPV terms, implyinga common reduction factor o f 19percent. Uponreaching the HIPC completion point, Togo will also qualify for reliefunder the Multilateral Debt ReliefInitiative, which i s estimated to reduce debt service on debt to IDA, the IMF, andthe African Development Bank by approximatelyUS$404 million(inNPV terms). Togo could reach the decision point by end-October 2008, subject to satisfactory perfonnance under the PRGF arrangement, and understandings with IDA and IMF staffs on appropriate completion point triggers to be established by the Executive Boards of the two institutions. A sensitivity analysis o f Togo's external debt after full delivery o fHIPC Initiative assistance shows that evenunder worsening economic conditions, Togo's debt ratios remainbelow HIPC initiative thresholds. Documentof The WorldBank FOROFFICIALUSEONLY ReportNo. 45004-TG REPUBLIC OF TOGO EnhancedHeavily IndebtedPoor Countries(HIPC) Initiative PreliminaryDocument September 2,2008 ~This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not otherwise be disclosed without World Bank authorization. I.INTRODUCTION 1. This paper,preparedjointly by the staffs of the IMFandIDA, presentsa preliminaryassessment of the eligibilityof Togo for assistanceunderthe Enhanced HIPCInitiative.'The assessment is based on ajoint IDA/IMFdata reconciliation mission to Lome inMarch2008 and subsequent revisions based on updated information. 2. The analysisindicatesthat after traditionaldebt reliefmechanisms are applied, Togo's NPV of debt-to-revenueratioat end-2007was significantlyabovethe HIPC Initiativethreshold. Togo is potentially eligible' for debt reliefunder the HIPC Initiative and could reach the decision point by end-October 2008. Togo has already adopted an I- PRSPU3Satisfactory implementation o f the PRGF-supported program for at least six months and agreement on appropriate completion point triggers will be necessary to reach the decision point. 3. The paperis organizedas follows. SectionI1provides background information on Togo's eligibility under the HIPC Initiative, including the country's recent economic developments. Section I11discusses the macroeconomic outlook. Section lV summarizes the preliminaryDRA andpresents the size ofpossible HIPC, MDRIandMDRI-type assistance, including through support obtained for arrears clearance. Section V suggests a timeline for the decision point, outlines possible completion point triggers, and discusses the monitoring o f the use o fHIPC resources. Section VIpresents issues for discussion by Executive Directors. 11. BACKGROUND ELIGIBILITY AND A. PRGFandIDA Status 4. Followinga successfulStaff-MonitoredProgram(SMP), the IMFExecutive Boardapprovedon April 21,2008, a three-yearSDR66 millionPRGFarrangement,the first since the mid-1990s.The PRGF-supportedprogram, anchored inTogo's I-PRSP, aims to revive economic growth and improve living conditions within a stable macroeconomic environment by: (i) bringingpublic debt to a sustainable level; (ii) facilitating the resumption o f external assistance; (iii) increasingresources for infrastructure, health, and education; (iv) strengtheningfiscal governance; (v) restructuring fragile banks; and (vi) reforming the business environment and state-owned enterprises. Preliminary information indicates that '"Enhanced HIPC Initiative" i s hereafter referred to as "HIPC Initiative." Togo i s inthe list of potentially eligible countries that have been grandfathered on end 2004-data. See IDA and IMF, "Heavily Indebted Poor Countries (HIPC) Initiative-Issues Related to the Sunset Clause," August 16. 2006. 3Togo's I-PRSP was adopted inMarch 2008, and discussed by the Executive Boards of the IMF and IDA in April 2008. The full PRSP is expectedto be completed inearly 2009. 2 performance under the PRGF arrangement has been satisfactory, with continued progress on strengthening public finances and governance. Despite unfavorable economic conditions, expenditure has been under control and the primary deficit target has been achieved by a wide margin. 5. Togo is an IDA-only countrywith a gross nationalincome(GNI) per capitaof US$360 in 2007 (usingthe World Bank's Atlas methodology).Followinga re-engagement strategy discussed by the IDA Board inDecember 2004, an InterimStrategy Note was presented to the IDA Board on May 29,2008. The note details a support program that i s closely aligned with the government's I-PRSP and aims to help Togo recover from its long periodo f instability and suspension o f aid and beginlaying the foundations for sustained, shared growth over the medium term. The program consolidates andmainstreams the work supportedbythe World Bank inthe areas ofpublic financial management, economic governance, infrastructure rehabilitation, and community development. InMay 2008, arrears to IDA were cleared through a bridge loanprovidedby a bilateral creditor. Togo then used the proceeds of a grant under a Development Policy Operation (DPO) to repay the bridge loan. 6. Togo has made major strides in regularizingits relationswith other donors and creditorsafter morethan a decadewith limitedexternalassistance.The European Union, Togo's largest donor, announced inlate 2007 the full resumption o f financial assistance after a 15-year suspension. On July 22,2008, the Executive Board o f the AfDB approved a grant to help clear Togo's arrears under its new Fragile States Facility. On June 12, 2008, the Paris Club agreed to clear all o f Togo's arrears through debt cancellation and rescheduling, and to reschedule all debt service due over the next few years. Other bilateral and multilateral partners are also reengaging. 3 B. Povertyand Social Issues 7. Togo's longpoliticalcrisis had a significantimpacton social indicators, Key Poverty & Social Indicators - 2006 many ofwhich lagbehindthose of neighboringcountries.The period o f Poverty ("A below poverty line) 62 political instability and the related Adult literacy rate (%) 53 withdrawal o f donor support have resulted Female literacy rate (%) 38 inaneconomic declinethat hasreduced Primarycompletion rate (%) 66 livingstandards for a large segment o fthe Female primary enrollment (%) 92 population. Expenditures on health, Under-five mortality (per 1,000) 75 education and public investment are far Life expectancy at birth(years) 55 below regional averages, largely reflecting Childmalnutrition (%; 2000) 25.1 low external assistance, weak expenditure HIVprevalence (%; 2005) 3.2 management andlack o fprioritization. Also, Note: Percent of total populations, unless otherwise government budgets favored urban rather indicated. thanrural areas; infrastructureinvestmentin Source: WorldDevelopment Indicators andTogoI- the rural areas was very limited, and there i s PRSP. highunemployment inthe urbanareas. Togo's HumanDevelopment Index failed to improve inrecent years and stood at 0.512 for 2007-2008, incontrast with a gradual improvement experienced inSub-Saharan Africa. 8. A survey on corewelfare indicators4carried out in2006 indicatedthat about 62 percentof the populationwas poor. The poverty levelwas muchhigher inrural (about 74 percent) than inurban(about 37 percent) areas. There were also significant variances among regions, with a relatively low level inthe Lome area (about 25 percent) and a very highincidence inthenorthernregion o f Savanes (over 90 percent). A qualitative surveyo f the perceptions o fpoverty inTogo revealed that the population sampled attributed the worsening o f living conditions between 2000 and 2006 mainly to economic difficulties and healthproblems. Weak public finance management, inparticular due to weak financial management o f key state-owned companies whose losses have been financedby the public treasury, has eroded resources for vital public services. 9. While some progresshasbeenachievedtowardreachingthe Millennium DevelopmentGoals (MDGs), manyof the goals are unlikelyto be met by 2015. According to a recent assessment of the MDGs,' progress has been most notable inreaching the goal of universalprimary education: boththe net primary enrollment andthe primary completion rate improvedbetween 1990 and 2005; the youth literacy rate also improved. In ~ 4 The survey was conducted by the Togo Government's General Statistics Department, funded inpart by the World Bank and other donors (UNDP, UNICEF and UNFPA). The assessment was undertaken by the Government o f Togo with support o f the UNDP. 4 addition, there has been some progress toward the attainment of the goal o fpromoting gender equality. However, it would be difficult to achieve the goals ofhalving extremepoverty and hunger, as well as the goals o faccess to improved water andsanitationfacilities andreducing maternal and infant mortality. The incidence o f tuberculosis increased duringthe period and the prevalence o fHIV/AIDS amongthe adult population was estimated at 3.2 percent in 2005. C. PolicyTrack Record 10. Togo is emergingfrom morethan a decade of politicalcrisis, interruptionin foreign assistance, andeconomic decline. Togo's growth performancehas been among the weakest insub-Saharan Africa, with per capita income declining by an average o f one percent a year since the early 1980s. The long-lasting socio-political crisis andwithdrawalo f donor support took a toll on Togo's economy, infrastructure and institutions. Traditional export sectors sufferedfrom adverse terms o f trade andmismanagemento f state-owned enterprises. Governance problems andbanking sector difficulties inhibited private investment. A heavy external debt burdenand weak fiscal management ledto the rapid accumulation o f arrears. Recent political and economic reforms have paved the way for donor reengagement. 11. In2006, the authoritieslaunchedan ambitiouseconomic reformprogram, initiallysupportedby an IMFStaff-MonitoredProgram.Performance under the SMP was good: all quantitative targets were comfortably met and progress was made on governance-related structural reforms. Administrative reforms initiated by the new tax and customs directors appointed inMay 2006 helpedbroaden the tax base and recover arrears, boosting fiscal revenues from 15%percent of GDP in2005 to 17 percent in2007. Despite election pressures and new outlays to address the energy crisis, expenditures were kept somewhat below the target. As a result, the primary fiscal position for 2007 was broadly balanced, compared to a 2006 primary deficit o f 1percent o f GDP, allowing a net reduction indomestic arrears. 12. Fiscal policieshavecontinuedto be prudentunderthe new PRGFarrangement, despitethe adverse impactof the recentglobalfood andfuelpriceshocks. The 2008 budgettargets abroadly balanced primary position andhigherresources for education, health, infrastructure, andthe restructuringo f state-owned banks and enterprises. Duringthe first half o f 2008, revenues have beenin line with projections while spending has been restrained, partlyreflecting emphasis on fiscal discipline. This resulted ina primaryfiscal surplus and sizeable government deposits available for spending inthe second halfo f the year. 13. Significantprogress hasbeen made on strengtheninggovernance.The authorities have implementeda wide range o fpublic financial management reforms, including the phasing out o fpayment orders without budget line identification. A new mechanism for 5 monthly monitoring o fbudget execution has been made fully operational, significantly shorteningthe time lag for analyzing fiscal data andproviding policymakers with the ability to maketimely andinformed spendingdecisions. A new General Inspectorate of Finance has been set up to conduct ex-post inspections o f agencies that handle public resources. Following an external audit o f Togo's large domestic arrears, the authorities are finalizing a strategy for clearing these arrears. Also, an action plan for public procurement reforms has been adopted. Audits o f the state-owned cotton company and clearance o f its arrears to farmers have paved the way for broader sector reform. The authorities have also prepared a strategy to strengthen Togo's fragile state-owned banks and placed the largest bank under new management and oversight. 14. A nascenteconomic recovery hasbeentempered by a region-wideenergy crisis and globalpriceshocks.After a sharp upturnin2006, real GDP growth moderated to about 2 percent in2007 as severe region-wideelectricity shortages and localized flooding partly offset positive factors such as favorable weather conditions for agriculture, growing regional trade, and a modest rebound inthe cotton sector. Despite buoyant money and credit growth, inflation remained subduedin2007, but has risen sharply over the past few months on account o fthe surge inworld food prices. Togo's external competitiveness has continuedto suffer from adverse terms o f trade and a poor business environment. The current account deficit increased slightly in2007, to 6% percent o f GDP, as higher remittances offset a wideningtrade gap. Gross international reserves stood at about 3 months o fimports. 111. MACROECONOMIC OUTLOOK 15. The near-termoutlookis cloudedby the surge inglobalfood andfuelprices,as well as recentheavyflooding. Togo i s amongthe world's hardest hit economies, with an estimated balance o fpayments impact o f 6 percent o f GDP in2008. This reflects Togo's heavy reliance on fuel imports owing to its role as a regional transport corridor and diesel- based electricity generation. The balance o fpayments impact o f the food price surge was more limited, but surging food prices have severely hit real incomes, particularly for the urbanpopulation without access to subsistence agriculture. Inflation has spikedand international reserves are expected to decline inthe near term. 16. Nonetheless,economic growthis projectedto pickup over the mediumterm as donorsreengageand confidencereturns.The I-PRSP's medium-term framework envisages real GDP growth o f almost 4 percent. The initialrecovery i s expected to be driven by donor-financedpublic investment, improvedbusiness confidence, growing regionaltrade, and a reboundincotton and phosphate production. Over the mediumterm, growth shouldbe sustained byhigher foreign direct investment (e.g. inbanking, telecom and phosphate sectors, and the port), improved financial intermediation, and upgrades to public infrastructure, especially electricity, which would alleviate bottlenecks that previously stymied private sector growth. 6 17. A prudentfiscal policyis expected to support macroeconomicstabilityanddebt sustainability.A domestic primary surplus o fabout 1percent o f GDP, combined with comprehensive external debt relief and higher foreign aid, would result in a broadly sustainable fiscal and debt position that avoids renewed arrears. The authorities plan to achieve the required fiscal adjustment by gradually raising revenues to about 18 percent over the mediumrunwhile holding domestic spendingbroadly constant inrelation to GDP. Spending inpriority areas (health, education, infrastructure, and restructuring o f state-owned banks and enterprises) is to be increased significantly by (i)reallocating domestic spending away from nonpriority sectors, particularly untargeted subsidies andtransfers, (ii) bringing external assistance (it was US$12 per capita inthe period 2004-06, per the World Development Indicators database) to the regional average (US$43 per capita), and (iii) using resources to be freed up by H P C and MDRIdebt relief. The wage bill, though projected to rise modestly after a decade-long salary freeze, shouldremain inline with WAEMU convergence criteria. 18. Despitethe globalpriceshocks, inflationis expectedto be containedover the mediumterm, anchoredinthe WAEMU currencyunionandfiscal prudence. Nonetheless, inflation can be erratic incase o funfavorable weather conditions (droughts or the recent heavy floods) or further volatility inworld food and oil prices. 19. Externalconditionsare likelyto remainvery challenging.Togo's current account deficit i s not expected to decline much over the mediumterm: imports are likely to grow as foreign aid is absorbed andFDIincreases. Exports are also expected to pick up, partly on account o f higher phosphate prices, but sustained export growth will require enhancing competitiveness through reforms to improve the business environment. External financing i s expected to come primarily from debt relief, higher FDIflows and a moderate fall in international reserves. 20. Despitesuccessfulreformsover the pasttwo years, Togo stillfaces significant politicaland economic risks. Social tensions could intensify inthe current difficult economic environment with surging food and fuel prices and tight budget constraints. Capacity constraints resultingfrom decades o fpolitical conflict and donor disengagement severely limit the authorities' ability to implementreforms. Governance reform efforts inthe public sector, public enterprises and banks could falter under the weight o f the significant challenges. Fragile banks couldjeopardize macroeconomic stability and weakened public enterprises inkey sectors could hamper growth efforts. Furthermore, exogenous shocks could stymie the nascent economic recovery, including a continued rise inworld oil prices, a worseningenergy crisis, and badweather affecting agriculture. Already severe floods in August 2008 have negativelyimpactedcriticalinfrastructure. Togo's international reserves are expected to fall below three months o f imports inthe near term, and the country remains vulnerable to terms o f trade shocks (inparticular, from oil prices), further euro appreciation, and confidence shocks that could lower remittances or cause capital outflows from the bankingsector. 7 Table 1:Medium- to Long-Term Macroeconomic Framework, SelectedIndicators, 2007-27 2007 2008 2009 2010 2008-27 (avn.1 (Annual percentage change) National income and prices GDP at constant prices 2.1 2.5 3.5 4.0 3.6 GDP at current prices 3.0 6.9 5.0 6.0 5.7 GDP deflator 0.9 4.4 1.5 2.0 2.1 Consumer prices (yearlyaverage) 1.o 8.4 5.4 1.7 2.7 External sector Export volume 3.9 11.7 7.8 8.4 6.7 Import volume 8.4 21.3 9.0 6.2 6.3 Terms of trade (U.S. dollar basis) 4.8 6.9 5.1 1.2 0.3 Money and credit Domestic credit 14.9 ... ... ... ... Broad money 18.2 ... ... ... ... (In percent of GDP) Central government finance Total revenue (including grants) 18.7 19.3 21.o 21.9 22.1 of which: Tax and nontax revenue 17.0 16.6 17.0 17.6 18.0 Total expenditure 20.6 21.6 23.0 23.5 23.3 Overall balance (including grants) -1.9 -2.2 -2.0 -1.6 -1.2 Domestic primary balance I / 0.2 -0.3 0.3 0.9 0.9 External current account balance (including grants) -6.4 -9.6 -8.5 -7.1 -5.7 Exports of goods and services 42.3 42.0 43.8 45.1 48.1 Imports of goods and services 61.8 62.6 70.2 71.2 70.5 Net present value of external debt 2/ 190.6 162.5 140.4 123.3 83.8 Sources: Togolese authorities; and IMF and World Bank staff estimates and projections. 1/ Excludes interest payments, foreign-financed investment, and grants. 2/ In percent of exports of goods and non-factor services before traditional debt relief. IV. DEBTANALYSISAND POSSIBLEHIPCAND MDRIASSISTANCE~ A. Debt ReconciliationStatus 21. The preliminary DRA below was prepared jointly by the Togolese authorities and the Bank and IMFstaffs. It draws on dataprovidedbythe authorities andcreditors for the public andpublicly guaranteedexternaldebt disbursedandoutstandingas o fend-2007. The reconciliation processwas completedjointly bythe IMF,the WorldBank andthe 6The Debt Relief Analysis presented inthe paper i s based on the HIPC Initiative's methodology. 8 Togolese authorities inMarch 2008. All multilateral and 90 percent o fbilateral and commercial debt were reconciled. B. Structureof ExternalDebt 22. At end-2007,Togo's public andpubliclyguaranteedexternaldebt before traditionaldebt reliefwas estimatedat US$2.2 billionin nominalterms. The correspondingNPV (US$1.8 billion) equals about 72 percent o f GDP, 191percent o f exports, and 396 percent of fiscal revenues. Multilateral creditors accounted for around half of the total debt innominal terms, with liabilities to IDA alone constituting more than one thirdoftotal externaldebt. Other multilateralswith substantialclaims on Togo are AfDF (6.7 percent of total external debt), B O A D (3.4 percent), EIB (2.4 percent), IsDB (1.8 percent), IFAD (1.2 percent) and OFID (0.6 percent). BADEA, FEGECE, andthe IMF only held minor claims on Togo (amounting to 0.2 percent combined). Among the bilateral and commercial creditors, the Paris Club accounted for almost 90 percent o f nominal debt at end- 2007 (44 percent of Togo's total external debt), with France beingthe largest creditor. The non-Paris Club creditors were China, Kuwait and Saudi Arabia, together representing 4 percent o f total external debt. About 1.5 percent of debt was heldby 11commercial creditors o fwhich CBAO Senegal is the major creditor. 23. As of end-2007, a largeshare of Togo's externaldebt (about 39 percent)was in arrears, thoughmost of these arrears havesince beencleared(Box 1). External arrears stood at US$851million, of which US$200 million were owed to multilateral creditors, US$636 million to bilateral creditors, and US$15 million to commercial creditors. Arrears to IDA,whichwere cleared inMay 2008, constituted the lion's share o farrears to multilateral creditors at end-2007. Arrears to the AfDB were cleared inJuly 2008, andthe EUhas indicated its intentionto clear Togo's arrears to the EIB.Arrears to the Paris Club stood at US$635 million at end-2007, and were cleared through cancellation and rescheduling during the June 2008 Paris Club meeting. 9 Table 2: Togo: NominalStocks andNetPresentValue of Debt at end-2007 by Creditor Groups - Nwninal Debt Stock I / ArrearsStock NPV of Debt before NPV of Debt after traditional traditional debt relief I / debt relief I / 21 US$ million Percent US$ million Percent US$ million Percent US$ million Percent of total of total of total of total Total 2,208.2 100.0 851.2 100.0 1,804.5 100.0 1,410.8 100.0 Multilateral 1,127.5 51.1 199.8 23.5 784.3 43.5 784.3 55.6 IDA 764.8 34.6 129.1 15.2 511.7 28.4 511.7 36.3 AfDF 148.9 6.7 19.7 2.3 90.4 5.0 90.4 6.4 BOAD 75.9 3.4 70.1 3.9 70.1 5.0 EuropeanInvestmentBank 52.6 2.4 32.6 3.8 47.8 2.7 47.8 3.4 Others 3/ 85.3 3.9 18.5 2.2 64.2 3.6 64.2 4.6 Bilateral 1,048.1 47.5 636.0 74.7 988.8 54.8 595.4 42.2 Pans Club: 964.3 43.7 634.9 74.6 922.7 51.1 511.2 36.2 Other Official Bilateral: 83.8 3.8 1.1 0.1 66.1 3.7 84.1 4/ 6.0 Commercial 32.6 1.5 15.4 1.8 31.4 1.7 31.2 2.2 Sources: Togoiese authorities: and Fund and Wolld Bank 6taH estimates il includes arrean. 21Base situationfor the calculation of HiPC debt relief: assumes a stock.ofdebt operationon Napier terms at end-December2007: and comparable action by other ORlciai bilateral creditors on eligible debt (pre-cutoff and non-ODA). 31 Othermuitiiaterais include iMF, isDB, BADEA, FEGECE, iFAD and OFiD. Togo has no arrean to the formerthree. 41 l h e loans that have been cancelled in 2007 have been added back to the outstandingdebt stock as of end-2007. C. PossibleAssistanceunderthe HIPCInitiative 24. Togo qualifiesfor debt reliefunder the HIPC Initiative's "fiscal window" based on end-2007data; the common reductionfactor is estimatedat 19 percent.' After full application o f traditional debt relief mechanisms, Togo's NPV o f debt i s estimated at US$1,411 million at end-2007, equivalent to 309 percent o f fiscal revenues.' The required debt reliefneededto bringthis ratio down to the 250 percent HIPC threshold is estimated at US$270 millioninend-2007 NPV terms (equivalent to a common reduction factor o f 19 percent). Basedon proportional burdensharing, multilateral assistance would amount to US$lSO million, andbilateral and commercial assistance to US$120 million (both inNPV terms). So far, 47 percent o f HIPC relief has been deliveredthrough multilateral arrears clearance and the cancellation o f loans by China. The requiredthreshold for financing assurances for H P C interimand completion point relief should be easily attained, given the large share o fParis Club andmultilateral debt. 'In April 1997, the fiscal revenues/openness criterionwas established to allow for the possibilitythat, for countries with a high export base, reaching the debt-to-export criteria targets may still leave the country with a large external debt burden relative to fiscal revenues. Inorder to qualify for debt reliefunder the revenue window, a country must have its NPV/revenue ratio above 250 percent. Inaddition, to be eligible to access under this window, the country must have an export-to-GDP ratio o f at least 30 percent, and a fiscal revenues- to-GDP ratio o f at least 15 percent, using an average o f the last three years o f actual data (see "Modifications to the Heavily IndebtedPoor Countries (HIPC) Initiative", July 23, 1999, IDNSecM99-475, and EBS/99/138). For 2005-2007, Togo's average export-to-GDP ratio was 42 percent and its average revenue to GDP ratio was 17 percent. * Togo does not qualify for the export window o f the HIPC initiative since its N P V o f debt to exports ratio as o f end-2007 was 149 percent. 10 Table 3: HIPC Initiative AssistanceUnder a ProportionalBurden-SharingApproach 1/2/ (In millions of U.S. dollars, unless otherwise indicated) Debt Outstanding Debt Outstanding Reduction of the (NPV terms) (NPV terms) NPV of Debt due end-2007 (A) Post-HIPC (B) to HIPC (A-B)/3 Total 1411 1141 270 (as percent of revenue) 309 250 59 of which: Multilateral 784 634 150 Bilateral 595 481 114 Paris Club: 511 413 98 Other Official Bilateral: 84 68 16 Commercial 31 25 6 Memorandum Items: Common reductionfactor (percent) 31 19 Revenue 41 456 Revenue/ GDP (3 year average) 17 Exports/GDP (3 year average) 42 Sources: Tcgoleseauthorities;and iMF and World Bank staffestimatesand projections 1/The proportionalburdensharing approach is describedin "HIPC Initiative-Estimated Costs and BurdenSharing Approaches" (EBS/97/127,7/7/97and IDNSEC M97-306, 7/7/97). 2/ Includesa hypotheticalstock-ofdebtoperationon Naplesterms (end-December2007)and comparabletreatment by other officialbilateralcreditors 3/ Each creditots NPV reduction in percentof its exposure at the referencedate, end-December2007, calculatedas (A-ByA. 4/ 2007 centralgovernmentrevenuesexcludinggrants. 25. A sizeableshare of HIPC reliefwill be (and has already been)deliveredthrough arrears clearance(Box 1).IDA and AfDB have already delivered their full share o fHIPC assistance through arrears clearance operations inMay and July 2008. Other multilaterals are also likely to deliver a substantial share o fHIPC reliefthrough arrears clearance. Togo does not have arrears to the IMF, IsDB,BADEA, andBOAD. 26. Eachcreditor decides at the decisionpointthe modalitiesandtimingfor their delivery of HIPC Initiativeassistance.However, inorder to assessthe impact o fthe HIPC Initiative assistance the following working assumptions have beenmade inaccordance with previous practice (all values are inNPV terms): IDA assistancewould amount to approximately US$98 millionandhasbeenprovided through its concessional arrears clearance operation (Box 1). IMFassistancewouldtotalUS$0.3 millioninNPVterms. Immediately followingthe approval o f the decisionpoint by the Boards o f IDA and the IMF, the IMFwill extend interimassistance-provided that the necessary financing assurances are inplace-in the form of debt-service reduction. Since there will be no principal repayments falling due through 2013, interimHIPC assistance of about US$O.1 millionwill be appliedto cover over half ofPRGFinterimobligations untilthe completion point, presently assumed for October 2010 (Table AS). 11 0AfDB assistanceo fUS$17.3 millionhas been deliveredthrough its concessional arrears clearance operation (Box 1). 0 Other multilateralsare expected to deliver assistance amounting to US$35 million through concessional rescheduling o f arrears and/or debt service reduction, to commence at decision or completion points. 0 The Paris Club creditors are assumed to provide their share o f HIPC debt relief (US$98 million inNPV terms) through a Cologne flow operation (i.e. a 90 percent NPV reduction) after Togo reaches decision point, with the remaining HIPC assistance deliveredthrough a stock o fdebt operation at the completion point. For non-ParisClub officialbilateralcreditorsand commercialcreditors,China has already deliveredits share o fHIPC relief in2007 through loan cancellation. For other bilateral and commercial creditors, Togo has agreed to seek comparable treatment to that givenby the Paris Club creditors. 12 Box 1: Arrears Clearance The large scale of Togo's arrears distinguishesit from most other HIPC cases.As o f end-2007, almost half o f Togo's official external debt (inN P V terms) was inarrears. Most of these arrears have been or are expected to be cleared through concessional arrears clearance operations. Consistent with the HIPC Initiative methodology, the grant element embedded inthe clearance o f arrears will be counted toward the creditor's contributionto debt reduction under the HIPC Initiative. Togo has so far cleared or reachedunderstandings o n the clearance o f 96 percent o f its external arrears. It is expectedthat Togo will normalize relations with the remaining creditors inthe context o f the HIPC Initiative on terms consistent with Togo's limitedpayment capacity. - Togo's arrears to IDA were cleared inMay 2008 through a bridge loan providedby a bilateral donor. Togo then usedthe proceeds o f an exceptional allocation o f IDA resources through a development policy operation, provided o n grant terms, to repay the bridge loan.' - Arrears to the AfDB Group were cleared inJuly 2008 under the Fragile States Facility. Ninety-nine percent o f the cost was financed from FSF grant resources, and, inrecognition o f Togo's limitedpayment capacity, the country received bilateral donor assistance to finance the remainder. - The authoritieshave madeprogressindiscussionson clearance of arrears with other multilateral creditors.The European Commission intends to provide grants to clear Togo's arrears to the European Investment Bank intwo tranches in2008 and 2009 under the ninthand tenth European Development Funds. The International Fundfor Agricultural Development has proposed an arrears rescheduling with a moratorium period without debt service. The authorities have approached the remaining multilaterals (OFID and FEGECE), and are expected to clear arrears to these creditors inthe context o f the HIPC Initiative on terms consistent with Togo's limitedrepayment capacity. - Togo has been accorded exceptional treatment by the Paris Club. Paris Club creditors reached agreement withTogo inJune 2008 to alleviate Togo's externalpublic debt under Naples terms, which ledto the immediate cancellation o f US$347 million o f debt contracted prior to the 1st January 1983 cut-off date, leaving a balance debt o f U S 3 9 2 million which is rescheduled or deferred. On an exceptional basis, considering Togo's very limited payment capacity further constrained by the sharp rise o f commodities and food prices, the agreement also provides for a moratoriumperiod with no debt service payments between 1st April 2008 and 31 March 2011provided that Togo continues to satisfactorily implement the PRGF-supported program. Creditors also agreed, o n an exceptional basis, to defer untilafter March2011the repayment o f arrears accumulatedby Togo on short term and post cutoff date debts, the maturities falling due for those debts as well as all moratorium interest due o n the rescheduled and deferred amounts. The Togolese authorities are expected to seek comparable treatment from its non-Paris Club creditors. "See IDA. "Further elaboration of a svstematic amroach to arrears clearance". June. 2007 (IDNSecM2007-0443'1. D. PossibleAssistance under MDRI 27. On reachingthe completionpoint underthe HIPC Initiative,Togo would qualify for MDRIdebt relieffrom IDA andAfDF. MDRIrelief from IDA would include all debt outstanding and disbursedbefore end-2003 and still outstanding at the beginning ofthe quarter following the date on which the country reaches completion point. Similarly, MDRI 13 assistance from the AfDF would include cancellation o f all debt outstanding and disbursed before end-2004 and still outstanding on the day following the completion point. 28. Assumingthat Togo reachesthe completionpointin October 2010, preliminary estimatesindicatethat the MDRIdebt reliefcouldamountto US$753 millionin nominalterms (US$404 millioninNPV terms). Ofthis amount, US$618 millionand US$135 million would be providedby IDA and the AfDF, respectively. After repaying its debt to the IMFinearly 2008, Togo has no debt outstanding that would benefit from MDRI- type reliefby the IMF.Other debt reliefbeyond HIPC at completion point includes the LIC initiative o f the EIB, as well as additional debt reliefthat has been granted, on a voluntary basis, by Paris Club creditors. E. ImpactofHIPC andMDRIDebtReliefon DebtRatiosandSensitivityAnalysis 29. The applicationof bothtraditionaldebt reliefandHIPC debt reliefwould bring the NPV of externalpublic debt downto 196percentof revenues by 2010, from 396 percentin 2007 (Table A5). With MDRIreliefadded, the NPV would fall further, to 124percent o f revenues (or 21.8 percent o f GDP, 51.4 percent o f exports) in2010, primarily as a result o f cancellation o f debt to IDA. This does not include possible "beyond HIPC" debt relief that maybe provided by Paris Club creditors or the ED. 30. The NPV of debt is projectedto declinefurther over the longterm. Withboth HIPC and MDRIdebt relief, the NPV o f debt would continue to decline, to 83 percent o f revenues by 2027, reflecting the projected growth infiscal revenues and the authorities' intention to limit new borrowing. Debt service would average about 6.5 percent o f revenues (2.5 percent of exports) during2008-27. 31. Togo's externalpublic debt would remainbelowthe HIPC Initiativethreshold under an alternativescenariowith lower growth,revenues,andexports.The scenario in Table A 6 assumesper capita real GDP growth o f negative one percent a year throughout 2009-2027, which decreases the average annual growth rate from 3.6 (see Table 1) percent to 1.6 percent. The scenario also assumes that the export- and revenue-to-GDP ratios remain unchangedfrom the baseline, implyingthat exports andrevenues would be lower by about 40 percent indollar terms by 2027. Assumingthat expenditures cannot be fully compressed inlinewith GDP andrevenues, the expenditure-to-GDPratio wouldriseto 30percent by 2027, compared to 23 percent inthe baseline, necessitating additional borrowing. With these assumptions, the NPV o f debt would still decline over the longterm, reaching 180percent o f revenues by 2027 (68 percent of exports, 33 percent o f GDP). Debt service would average around 12 percent o f revenues and 4.5 percent o f exports over the 20-year period. 14 v. DECISIONANDFLOATING COMPLETIONPOINTS A. Possible DecisionPoint Timing 32. Togo could reach the HIPC decision point by end-October 2008, together with the completion of the first review under the PRGFarrangement. Assumingthat performance under the PRGF is considered satisfactory, Togo would have satisfied the minimumsix month track recordo f satisfactory performanceunder aprogram ofupper-credit tranche policy conditionality with the IMF. B. Possible Triggers for the FloatingCompletion Point 33. IMFand World Bank staffs have reachedpreliminary understandingswith the Togolese authorities on a set of completion point triggers. Inaddition to standard triggers on macroeconomic stability and implementinga full PRSP, the triggers cover four areas critical for ensuring the effectiveness o f debt relief (Box 2). The triggers are consistent with the authorities' medium-term economic reform program described inthe I-PRSP and monitoredunder the IMF's PRGFprogram and IDA'SDevelopment Policy Operations. 34. Inpublic financial management, the central objective is to continuebuilding institutions that support good governance and transparency, in particular inthe areas of procurement, monitoring of budget execution, and auditing. Followingthe recent implementationo f a monthly monitoring template for budget execution, a key medium-term objective i s to implementa functional expenditure classification that allows the monitoring and publication o f data on poverty-reducing spending. To improve the efficiency and transparency o f spending, another important goal i s to start reforming Togo's weak public procurement system.Finally, making the Court o f Accounts (Cow des Comptes) operational would improve transparency and quality o freporting on budget expenditures by ensuring that public accounts are externally audited and certified annually, and that the audit results are published. 35. On governance, a central goalis to sustain recent efforts to improve transparency in the phosphate sector, Togo's only major natural resource and one of its major exports. An external financial and strategic audit of the sector i s under preparation. For the mediumterm, it will be important to regularly audit the payment flows betweenthe government and the sector, and inform the public about the audit results inorder to ensure the transparency o f resource extraction. 36. The triggers also reflect the needto bolster the effectiveness and transparency of debt management. Inparticular, external anddomestic debt data shouldbe consolidated under a single unit charged with all public debt management tasks. Regular publicationo f public debt data will help support debt sustainability and strengthenrelations with creditors and investors. 15 37. In the social area, the objective is to strengthen health and education services. The authorities are committed to raising the share o fpublic spending on health, which i s among the lowest inthe region, partlyreflecting consistent shortfalls inbudget execution. The spending increase is critical to increasingthe number o fmedical personnel, drugs and other medical materials inthe country's regional health facilities. Another critical objective i s to improve education quality, particularly through teacher recruitment andprovision o f teacher training. Box 2: Togo -ProposedTriggers for the Floating CompletionPointg PRSP Prepare a full PRSP through a participatory process and implement satisfactorily its recommended actions for at least one year, as evidenced by an Annual Progress Report submitted by the Government to IDA and the IMF. Macroeconomic stability Maintainmacroeconomic stability as evidenced by satisfactory performance under a PRGF-supported program. Public financial management Adopt a mechanism to track public expenditures for poverty reduction on the basis o f a functional expenditure classification and publishquarterly reports on these expenditures executed over a period o f at least six months preceding the completionpoint. Nominate and install the judges for the Cour des Comptes, and submit the draft o f the Loi de rgglement and draft General Treasury Balance (Balanceginirale du T r b o r ) for a given fiscal year to the Cour des Comptes and Parliament within the statutorily-specified period (9 months after the end o f that fiscal year) for at least one year immediately preceding the completion point. Adopt a decree creating the Procurement Regulatory Authority inconformity with the WAEMU Procurement Directives, nominate its managerial staff, and provide them with an adequate budget; and monthly publication ina public procurement gazette or on a government website o f all o f the signed contracts, including sole source contracts and public concessions, for at least six months immediately preceding the completion point. Governance Regular public reporting o f payments to, and revenues received by, the government for the phosphates sector inline with the EITI criteria, including an annual report for at least the year immediately preceding the completion point. Debt Management Consolidate external and domestic debt data under a single unit charged with all public debt management tasks. Publishan annual report on a government website providing accurate and complete data on external and domestic public debt, including information on debt stocks, actual debt service, and new loans within six months after the end o f the year, for at least one year immediately preceding the completionpoint. Social sectors Increase domestically-hnded health expenditures inthe year prior to the completion point to at least 7.5 percent o f actual domestic non-interest expenditures (the 2007 ratio was 5.7 percent). Start implementationo f the national education sector plan as evidenced by completing the training o f at least 500 new teachers and the remedial training o f at least 4,000 existing teachers. The first two triggers (PRSP implementation and satisfactory macroeconomic performance) are requirements for reaching the completion point under the IMFPRGF-HIPC Trust Instrument. 16 C. MonitoringPublicSpendingFollowingProvisionof HIPCAssistance 38. Debtreliefunderthe HIPC Initiative andbeyondHIPC (includingMDRI) shouldbe accompaniedby a programthat ensures the effectiveuse of domestic and externalresources and reflectsthe expenditureprioritiesof the PRSP.This will require continued efforts to strengthen the programming, management, control and monitoring o f expenditures, and improved service delivery inkey sectors. It will also require costing PRSP priorities and developing a medium-termexpenditure framework to efficiently allocate public resources for meeting PRS objectives. 39. With technicalassistancefromthe IMF,the World Bankandother donors, major steps havebeentaken to improvepublicfinancialmanagement(PFM)." Budget discipline has improved with the closure o fbank accounts usedfor off-budget operations, the unification o f cash management under the Treasury, the near elimination of the use o f exceptional payment authorizations without ex-ante authorization inthe Finance Law, and the greater involvement o f financial control staff inthe review o f expenditures processed through normal budget processing channels. Monthly monitoring o f budget execution has been established, and strengthenedtax and customs administration has enabled a significant increase inrevenues. 40. Furtherefforts are neededto improvePFM, andthe governmentis developinga medium-termPFM reformstrategy.Key challenges include improving the quality and composition o fpublic spending, streamlining the expenditure circuit, and strengtheningthe ex-post system o f control over budget execution. Restoration o f the regular budget preparation timetable i s important during2008. Implementation o f a new procurement code and associatedprocedures i s critical, as i s greater transparency o fthe procurementprocess outcomes. A Public ExpenditureManagement and Financial Accountability Review (PEMFAR)beingconducted inFY09bythe World Bankandother development partners will support these reform efforts, as will an IMFtechnical assistancemission scheduled for September 2008 aimed at defining a strategy to strengthen the public accounting system. Progress o f the reforms are beingmonitoredby Bank and Fundstaff under the respective support programs (development policy operations and the PRGF, respectively), and selected actions are among the proposed completion point triggers. 41. A basic monitoringmechanismfor trackingexpendituresis beingimplemented. The government plans to introduce a fbnctional classification by end-2008 that can track poverty reduction expenditures, for implementation inthe 2009 budget.The government intends to use this mechanism(a proposed completion point trigger) to track its total budget loThis includes an IMFtechnicalassistancemission in2007 to review the PFMsystem, follow-upwork by IMF's AFRITAC-West,anda Public ExpenditureManagementandFinancialAccountabilityReviewconducted by the Bank andother donors in2006. 17 outlays against its medium-term expenditure priorities, as defined by its I-PRSP and successor PRSP. Possible medium-term expenditure priorities are inBox 3. These are indicative only and will be elaborated upon inconsultation with the government as it develops its PRSP and expenditure plans. Box 3: PossibleMedium-TermExpenditurePriorities Education Increasingprimary school completionrate and reducing primary school repetition. 0 Training o f teachers. Health Increasing healthpersonnel inthe country's regional health facilities. 0 Increase inavailability o f drugs and other materials. Agriculture and food security Expand income generating activities at the community level, including those that increase food production andor facilitate the supply o f food products to markets and the population. 0 Expanding availability o f quality services to producers-advice, agricultural education and training, and researchand development for improving the supply o f agricultural inputs. Infrastructure Expand supply of and access to electricity through intensified sub-regional cooperation in the area o f investment innew production, purchase and sale o f energy, and energy transportation. 0 Expand and improve port and road infrastructure. VI. ISSUES FORDISCUSSION 42. This paper assesses Togo's eligibility for assistance under the Enhanced HIPC Initiative. Executive Directors' views and guidance are sought on the following issues: Eligibility: D o Directors agree that Togo is eligible for assistance under the HIPC Initiative? Timing of the decision point: D o Directors agree with the staffs' recommendation that Togo could reach its decision point by end-October 2008, provided that it (i) has a satisfactory performance under the PRGF-supportedprogram, and (ii) agrees on appropriate completion point triggers? Floating completionpoint triggers: What are Directors' views on staffs' recommendations on possible triggers against which satisfactory performance would be measured for the floating completion point (Box 2)? 18 Figure la. Togo: Composition of Stock of External Debt at End- 2007 by Creditor Group (Nominal stock: $1.07 billion) (Nominal stock: $2.208 billion) Commercial 1.5% IDA Bilateral: 0.1% '-'O 4yo Other Multilateral 10% Figure lb. Togo: Potential Costs of the HIPC Initiative by Creditor Group (Total Estimated HIPC Enhanced Assistance: $270 million, end-2007 NPV terms) Commercial 2% DA Pans Club: 6% 36% Other Official IMF , AR)F L Bilateral: 0.1% 6% 6% Other Multilateral 13% Sources: Togolese authorities and staff estimates. 19 Figure 2. Togo: External Debt Sustainability Indicators, 2007-27 NPV of Debt to Revenues (In percentof Revenues) 400 Before traditional 300 8 8 200 ---.-_- llPC assistance - - - - 100 1 - 1 - - I - - I After conditionalHlPC assistance and MDRl I / 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2027 Debt Service to Revenues (In percent of Revenues) 25 20 15 10 5 assistance 0 I 2007 2009 2011 2013 2015 2017 Sources:Togolese authorities and staff estimates. 20 Figure 3. Togo: Sensitivity Analysis, 2007-27 NPV of Debt to Revenues (In percentof Revenues) 300 I 250 200 150 100 50 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2027 Debt Serviceto Revenues (In percent of Revenues) 20 18 16 14 12 10 8 6 4 2 0 1 1 , , I , , 1 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sources: Togolese authorities and staffestimates. 21 Table Al. Togo: Discountand ExchangeRate Assumptions as of end-December 2007 Discount Rate I / Exchange Rate 21 CurrencyName (In percent per annum) (Currency per US. dollar) Canadian Dollar 5.42 0.99 CFA Franc 5.35 445.59 Swiss Franc 3.95 1.13 ChineseYuan 5.29 7.30 Danish Krone 5.39 5.08 Euro 5.35 0.68 U.K. Pound 6.33 0.50 JapaneseYen 2.47 114.00 NorwegianKroner 5.93 5.41 Special Drawing Rights 5.29 0.63 Swedish Krona 5.31 6.41 US. Dollar 5.64 1.oo Memorandum item: Paris Club cutoff date January 1, 1983 Sources: OECD; and IMF, lnternafional Financial Statistics. I / The discount rates used are the average commercial interest reference rates over the six-month period piror to end-December 2007, Le.,the end of the periodfor which actual debt and export data are available. 2/ The exchange rates are expressed as nationalcurrency per US. dollar at end-December 2007. 22 Table A2. Togo: NominalStock andNetPresentValue of Debt as of December 31,2007, by Creditor Groups Base Situation for Calculation Legal Situation of HlPC Debt Relief 2/ Nominal Debt Stock 11 Arrears Stock NPV of Debt 1/ NPV of Debt US$ million Percent US$ million Percent US$ million Percent US$ million Percent of total of total of total of total Total 2,206.2 100.0 851.2 100.0 1,804.5 100.0 1,410.8 100.0 Multilateral 1,127.5 51.1 199.6 23.5 784.3 43.5 784.3 55.6 IDA 764.6 34.6 129.1 15.2 511.7 28.4 511.7 36.3 AtDF 146.9 6.7 19.7 2.3 90.4 5.0 90.4 6.4 75.9 3.4 70.1 3.9 70.1 5.0 52.6 2.4 32.6 3.6 47.6 2.7 47.8 3.4 40.1 1.8 0.0 0.0 27.2 1.5 27.2 1.9 27.6 1.2 7.5 0.9 19.9 1.1 19.9 1.4 OFb 13.6 0.6 10.5 1.2 13.2 0.7 13.2 0.9 iMF 1.7 0.1 1.6 0.1 1.6 0.1 BADEA 1.6 0.1 0.0 0.0 1.6 0.1 1.6 0.1 FEGECE 0.7 0.0 0.4 0.0 0.6 0.0 0.6 0.0 Bilateral and Commercial 1,060.7 46.9 651.4 76.5 1,020.2 56.5 626.5 44.4 Bilateral 1,046.1 47.5 636.0 74.7 966.6 54.6 595.4 42.2 Paris Club: 964.3 43.7 634.9 74.6 922.7 51.1 511.2 36.2 Post-cutoff date 108.7 4.9 27.2 3.2 100.7 5.6 100.4 87.7 ODA 79.3 3.6 26.7 3.1 73.3 4.1 73.0 56.4 Non-ODA 29.5 1.3 0.5 0.1 27.4 1.5 27.4 29.3 Pre-cutoff date 655.5 36.7 607.7 71.4 822.1 45.6 410.6 29.1 ODA 7.4 0.3 2.0 0.2 5.5 0.3 2.2 0.2 Non-ODA 648.2 38.4 605.7 71.2 616.6 45.3 406.6 29.0 Austria 51.7 2.3 35.4 4.2 46.3 2.6 21.4 1.5 Belgium 173.3 7.6 90.9 10.7 167.4 9.3 61.2 5.6 EEC-IDA administered loans 7.4 0.3 2.0 0.2 5.5 0.3 2.2 0.2 France 234.0 10.6 184.9 21.7 233.6 12.9 142.5 10.1 Germany 42.6 1.9 35.8 4.2 43.6 2.4 27.0 1.9 ltaly 13.0 0.6 9.6 1.1 12.3 0.7 5.5 0.4 Japan 75.6 3.4 26.7 3.1 70.1 3.9 69.6 5.0 Netherlands 28.2 1.3 20.7 2.4 29.1 1.6 15.6 1.1 Spain 79.2 3.6 45.5 5.3 74.5 4.1 26.4 2.0 Sweden 6.9 0.3 5.6 0.7 7.2 0.4 4.3 0.3 Switzerland 205.2 140.0 187.2 66.1 United Kingdom 46.6 2.1 37.8 4.4 46.1 2.6 27.1 1.9 Other Official Bilateral: 83.6 3.6 1.1 0.1 66.1 3.7 64.1 6.0 China 51.0 2.3 0.7 0.1 41.6 2.3 59.6 3/ 4.2 Kuwait 30.6 1.4 0.4 0.1 23.1 1.3 23.0 1.6 Saudi Arabia 2.0 0.1 1.5 0.1 1.5 0.1 Commercial 32.6 1.5 15.4 1.6 31.4 1.7 31.2 2.2 Arysta 3.1 0.1 3.1 0.4 3.1 0.2 3.0 0.2 Bayer 7.6 0.3 7.6 0.9 7.6 0.4 7.5 0.5 CBAO Senegal 14.1 0.6 13.1 0.7 13.1 0.9 Cotecna 3.3 0.1 3.3 0.4 3.3 0.2 3.2 0.2 Filtisac Fortis Bank 3.1 0.1 0.1 0.0 3.0 0.2 3.0 0.2 lvoirembal 0.1 0.0 0.1 0.0 0.1 0.0 0.1 0.0 Natexis Sotico 0.2 0.0 0.2 0.0 0.2 0.0 0.2 0.0 Tema 0.5 0.0 0.5 0.1 0.5 0.0 0.5 0.0 Yara 0.5 0.0 0.5 0.1 0.5 0.0 0.5 0.0 Sources' Togoleseauthorities; and FundandWorld Bank staff estimates. I/Includesarrears. 21 Includesa hypotheticalstock-of-debtoperationon Naplesterms at end-2007andat least comparableaction by other officlal bilateralandcommercial creditors on eligible debt (pre-cutoffand non-ODA). 3/ The loans that havebeen cancelledin 2007 habe been added back to the outstandingdebt stock as of end-2007. 23 Table A3. Togo: External Debt Service, 2008-2027 (in millions of U.S. dollars, unlessotherwiseindicated) Averages 2008. 2018- 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 2027 2017 2027 Before tradltlonal debt relief and muitllatenl arrears Clearance Total 96.0 96.8 93.7 94.0 89.3 89.0 82.1 77.8 71.7 69.6 64.4 74.2 86.0 87.7 Existing debt 21 96.0 96.2 92.4 92.1 86.9 85.9 78 5 73.5 66.6 63.8 49.2 45.4 83.2 51.1 Munilateral 50.6 49.0 48 5 47 8 46.4 45 8 45.5 43.2 41.6 40.8 39.8 35.4 45.9 38.8 World Bank Group 26 4 26 9 27.1 28.5 28.4 28.2 28.6 28.7 29.7 30.0 29.5 27 4 28.3 29.1 IMF 1.7 0.0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 AmB Group 3.3 3.8 3 9 4.0 4.2 4.7 4.7 4.6 4.6 4.8 5 1 4.6 4 3 5.0 Others 19.1 18.3 17.4 15.2 13.9 12.8 12.2 9.9 7.3 6.0 5.3 3.3 13.2 4 7 Official bilateral 38.3 39.6 43.4 43.8 39.9 39.7 32.5 29 9 25.0 23.0 9.4 10.0 35.5 12.3 Pans Club 29 8 31.1 31.3 31.6 31.9 31.7 28.2 25.5 20.9 19.4 8.9 9.8 28.1 11.1 Non Paris Club 8 5 8 5 12.1 12.1 8.0 7 9 4.3 4.4 4.1 3.8 0.5 0 3 7.4 1.2 Commercial 7.2 7.6 0.5 0.5 0 5 0.5 0 5 0 4 0.0 0 0 0.0 0.0 1.8 0.0 New debt 0.0 0 6 1 2 1 9 2.5 3 0 3 7 4.4 5.1 5.8 15.2 28 8 2 8 16.6 Debt seMce lo exports ratio 7.3 6.7 8.0 5.5 4.8 4.5 3.8 3.4 3 0 2.7 1.9 1.7 4.8 2.0 Debt seMce to revenue ratio 19.3 17.8 15.6 14.2 12 7 11.9 10.4 9.3 8.1 7.4 5.2 4.6 12.7 5.4 After tradltlonal debt rdlefand multllat~ralarrears clearance 31 41 Total 101.4 100.4 97.3 114.5 109.0 108.4 101.7 99.4 81 7 82.9 86.8 1054 99 7 90 8 Exlating debt 101.4 99.8 96.1 112.6 106 5 105.4 98.0 95.0 76.6 77.1 71.6 76 6 96.9 74.2 Munilateral 52.7 49.3 48.8 48 0 46.7 46.7 46.5 44 1 42 5 41.7 40.8 36.3 46.7 39.8 World Bank Group 26.4 26.9 27.1 28.5 28 4 28.2 28.8 28.7 29.7 30.0 29.5 27.4 28.3 29.1 IMF 31 1.7 0.0 0.0 0.0 0 0 0 0 0.0 0 0 0 0 0.0 0.0 0.0 0.2 0.0 AOB Group 3.3 3.8 3 9 4.0 4.2 4.7 4.7 4.6 4.6 4.8 5.1 4.8 4.3 5.0 Others 21.2 18.6 17.7 15.5 14.2 13.8 132 10.8 8 2 6.9 6.3 4.2 14.0 5.7 Official bilateral 40.7 42.1 45.9 60.2 55.6 54.7 47.7 47.3 34.1 35.4 30.6 40.3 46 4 34.4 Pans Club 32 2 33.5 33.8 47.7 47 3 46.5 43 2 42.7 30.0 31.8 30.2 40.1 38 9 33.2 Non Pans Club 8 6 8.6 12.1 12.4 8.3 8.2 4 5 4.6 4.1 3.6 0.5 0 3 7.5 1.2 Commercial 8 0 8.5 1.4 4.4 4 2 4.0 3.8 3 6 0.0 0.0 0.0 0.0 3.8 0.0 Newdebt 0 0 0.6 1.2 1.9 2.5 3.0 3.7 4 4 5 1 5.8 15.2 28 8 2.8 16.6 Debt seMce to exports ratio 7.7 7.0 6.2 6.7 5.9 5.4 4 7 4.3 3.4 3.2 2.6 2.4 5.5 2.6 Debt seMce to revenue ratio 20.3 18 5 16 2 17.3 15.5 14.5 12.9 11.8 9.2 8.9 7 1 6.6 14.5 7.2 After HlPC assistance 51 Total 55 7 48.3 48.5 81.4 102.2 120.2 126.5 126.9 107.9 90.2 82 0 98.5 90 8 86 4 Exultng debt 21 55.8 47 8 47 3 79.5 99.8 117.4 122.8 122.5 102 8 84.4 66.8 69.7 88.0 89.7 Munilateral 52.7 47 8 47 3 43.7 41.5 42.5 43.6 41.8 40 3 40 5 40.8 36.3 44.1 39.8 World Bank Group 26 4 26.9 27.1 28.5 28.4 28 2 26.6 28.7 29.7 30.0 29 5 27.4 28.3 29.1 IMF 31 1 7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0 0 0.0 0.0 0.0 0.2 0.0 AmB Group 3.3 3.8 3.9 4.0 4 2 4.7 4.7 4.6 4.6 4.8 5.1 4.6 4.3 5 0 Others 21.2 17 1 16.2 11.2 8 9 9.5 10.3 8 4 5.9 5.7 6.3 4.2 11.5 5 7 Official bilateral 2.7 0.0 0.0 35.0 54.2 67.9 71.4 73 0 57.8 42.4 26.0 33.4 40 5 29 9 Pans Club 0.3 0.0 0.0 32.2 44 4 56.4 61.0 59 4 45.0 32 1 25.4 33.2 33.1 28 2 Non Pans Club 2.4 0.0 0.0 2.9 9.8 11.5 10.4 13.6 12.8 10.3 0.5 0.3 7 4 1.6 Cornmemlal 0.4 0 0 0.0 0 7 4.1 7.0 7 8 7.8 4.7 1.4 0.0 0.0 3.4 0.0 Newdebt 0.0 0 5 1.2 1.9 2.5 2.8 3.7 4.4 5.1 5.8 15.2 28.8 2.8 16.6 Debt SeMceto exports rat!! aRer HlPC assistance 4 2 3.3 3 1 4 8 5.5 6.0 5 9 5.5 4.5 3.5 2 5 2.2 4.6 2.5 Debt seMce to revenue ratio aYcer HIPC fssutance 11.2 8 9 8.1 12.3 14 5 16 1 16.0 15 1 12.2 9.6 6.7 6.1 12.4 6.9 Reduction In debt HNICe as a rerutl Of HlPC lnhiatlve assutance 61 52.1 48.8 33.1 8.8 -11.8 -24.8 -27.5 -26.1 .7.3 4.8 6.9 4.8 4.5 After HlPC and MDRl assistanca 71 Total 55.7 48 3 48 5 48.9 69.6 87.3 93 2 93 6 73.5 55.4 47.4 66.4 67.4 52.3 Exuling debt 61 55.8 47 6 47 3 47.0 67 2 84.5 89.5 89 2 68.4 49.6 32.3 37.7 84.6 35.6 Munilateral 52.7 47.8 47 3 11.2 8 9 9.5 10.3 8.4 5 9 5 7 6.3 4.2 20.8 5.7 Official bilateral 2 7 0.0 0.0 35.0 54.2 67.9 71 4 73.0 67.8 42.4 26.0 33 4 40.5 29.9 Commercial 0 4 0.0 0.0 0.7 4.1 7.0 7 8 7.8 4.7 1 4 0.0 0.0 3.4 0.0 Newdebt 0 0 0.5 1.2 1.9 2.5 2.8 3.7 4.4 5 1 5 8 15.2 26.8 2 8 18.6 Deb1SeMce to exports ratio after HlPC and MDRl essislance 4.2 3.3 3.1 2 9 3.8 4.4 4.3 4.1 3.0 2.2 1.4 1.5 3.5 1 5 Debt seMce to revenue ratio afier HlPC and MDRl assislance 11.2 8.9 8.1 7 4 9.9 11.7 11 8 11.2 8 3 5.9 3 9 4.1 9.4 4.1 Reduction In debt ~ w k as 1rerun of e MDRl fssistance 0.0 0.0 0.0 32.5 32.6 33 0 33 3 33.3 34.3 34.6 34 6 32.0 23.4 34.1 Memorandum Items: Exports of goods and nonfactor sewices 81 1,319.3 442.0 1,566.9 701.9 1,847.9 997.1 2,157.7 2,288.9 2,418.3 2,550.9 3,345.0 4,386.4 1,928.9 3,478.7 Government revenues 91 498.4 543.1 599.0 659.9 703.0 745.8 791 1 839.2 885.9 935 3 1,228.4 1,808.2 720.1 1,275.5 Sources: Tcgolese authornies and staff estimates and pmjedions. 11All dab1IndiCaloR refer lo public and pUbliClyoUamnlee3(PPG)debl and are defined aflor rescheduling,unless Othewire indicated FIPCSIyear ends in Dosember 21Includesonlyprlnslpaland Interestdue on debt DutotandlnQ81of the referencedate (1213112007)and door not include pr0)eCld penallyIntereston BrresrS 31 Includes the impect of amears c1earance operation by IDA, AfDB and EIB 41AsPUmeI a hypothebsd stock of debt DpCratIonon NapleP terms and Cornpatabletrealmenlfrom other bilateralCredltom 51 Biiclertl and cOmmetCisl crediton are assumed to pmMda a Coiwne flow reschedulmgon eligible debt during the intenm penad and a Colwne slmk of debt operelion at the complolion pint (end alabDi 2010) Mull~Islerslcredllois am assumed lo proude HlPCdebt relief as Of the dcclsion plnt. ezupt for IFAD. BADEA m d DFID. whlch era srwmed lo provlds relief at the oomptetionpoint 81 The reductionI$ measured 8s the dlfferense be0v-n the ploiected debt S ~ M E @after hili use of trd1110na1debt mhef and debt s e ~ c after the applic~lt~on HiPC relief e of 71MDRl ass~stllncc(IPPII~S the World Bmk, the IMF and the ADB m d starts after tho assumed completion pmt (October20101 AlPUmeD that MOR1 has no impact on TOQO'Pnew mnowing over !he prqaction period to 81As defined 8n IMF, Bdmnceof Payment* MmuaI. 5th edition, 1883 Refers lo current R(Yexpork el Rsianuer are defined LIS centralgowmment reian~cs,asiuding grants 24 Table A4. Togo: NetPresentValue of ExternalDebt 2007-2027 (in millions of U.S. dollars, unlessotherwiseindicated) Averages 2007- 2018- 2007 2008 2009 2010 2011 2012 2017 2022 2027 2017 2027 I. Before traditional debtqellef NPV Of total debt 1.804.5 1.791.5 1.784.0 1,778.1 1.763.3 1.755.0 1.800.9 1.975.6 2.233.6 1,774.6 2,009.7 NPV of outstandingdebt 1,6045 1.757.2 1,7072 1,658.5 '1,6076 1,559.3 1.347 8 1,I 1,014.3 84.7 1,565.7 1,164.9 Official bilateraland commercial 1,020.2 992.7 962.0 933.0 902 2 873.8 762 2 710.7 668.1 880.7 705.8 Pans Club 922.7 906.6 888.4 869.0 848 4 826.5 735 0 692.1 650.7 827.0 666.3 Other officialbilateral 66.1 81.0 55.7 46.5 36 6 30.6 11 8 3.2 1.9 35.1 4 0 Commercial 31.4 25.1 17.9 17.5 17 1 16.7 154 15.4 15.4 18.6 15.4 Multilateral 784.3 784.5 745.2 725.5 705 4 685.5 585 6 474.0 346.2 685.0 459.1 Worid Bank 511.7 505.6 498.7 491.3 482 0 472.4 412 6 330.0 231.3 468.6 318.2 APJB Grwp 90.4 90.5 90.2 89.6 89 1 88.3 81 0 69.8 56.9 87.1 68.3 IMF 1 6 0.0 0.0 0 0 0 0 0.0 0 0 0 0 0.0 0 1 0.0 Other multilateral 180.5 166.3 156.3 144.5 134 3 124.9 82 0 74.1 58.1 129 1 72.7 NPV Of new borrmng 11 0.0 34.3 76.7 119.6 155 7 195.7 453 1 791.0 1219.3 208.9 844.8 iI. After traditional debt relief and mulitiateral arrears clearance 2131 NPV of total debt 1,410.8 1,1983 1.199.8 1,203.5 1,1818 1.167.2 1.193.2 1,333.5 1,500 1 1, I98.8 1,352.1 NPV of outstandingdebt 1,410.8 1,1640 1.123.1 1,0839 1,0261 971.5 740.2 542.6 280.8 989.9 507.3 Official bilateraland commercial 626.5 589.3 567.4 547 7 509 7 474.7 345 0 262.1 131.4 477.2 242.0 PansClub 511.2 503.5 494.1 484 0 459 4 434.2 334.3 260.0 130.6 429.5 239 1 Other official bilateral 84.1 61.0 55.7 46.5 36 5 30.1 10.7 2.1 0.8 36.3 2.9 Commercial 31.2 248 17.7 17.2 13 8 10.3 0.0 0.0 0 0 11.4 0.0 Multilateral 764.3 5747 555.7 536.2 516 4 496.8 395.2 280.5 149.4 512.7 265.3 World Bank 511.7 376 5 369.6 362.2 352 9 343.3 283.5 200.9 102.2 351.3 189.1 AfDB Group 90.4 70.8 70.4 69.9 69 4 68 6 61.3 50.1 37.2 69.2 48.6 IMF 1.6 0.0 0.0 0.0 0 0 0.0 0.0 0 0 0.0 0.1 0.0 Other multilateral 180.5 1273 115.6 104.0 94 1 85.0 50.5 29.5 10.1 92.1 27.6 NPV of new b o m n g 0.0 343 767 118.6 155 7 195.7 453 1 791 0 1,219.3 208.9 844.8 111.After conditional delivery of enhanced HlPC asslstance 41 NPV of total debt 1.670 6 1,301 7 1,2982 1,173.5 1,211 1 1,2174 1.148 1 1,291 5 1,479.1 1,242.3 1,313.6 NPV of outstandingdebt 1.870 8 1.287 4 1,221 5 1,054.1 1,0557 1,021 9 695 1 500 5 259.8 1,033.5 468.9 Omclal bilateraland commercial 1,020 2 6955 6673 537.0 555 1 5365 299 9 220 0 110.4 539.2 203.6 Pans Club 922 7 6097 575 1 451.9 4658 4492 284 7 217 9 109.5 470.9 200.6 Other officialbilateral 66 1 810 609 59.0 620 61 8 14 9 2 1 0.8 49.5 3.0 Commercial 31 4 249 31 3 28.2 273 254 0 3 0 0 0.0 18.8 0.0 Multilateral 650 3 571 9 554 3 517.0 5005 4854 395 2 280 5 149.4 494.4 265.3 World Bank 382 6 3765 3696 362.2 3529 3433 283 5 200 9 102.2 339 5 189.1 APJB Group 70 7 708 704 69 9 694 686 61 3 50 1 37.2 67.4 48 6 IMF 1 6 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.0 0.1 0.0 Other multilateral 1954 1246 1142 84 9 78 3 73 5 50 4 29 5 10.1 87.3 27 6 NPV Of new b o m n g 0 0 342 767 1194 1554 1955 453 1 791 0 1219.3 208.8 844.8 IV. After unconditional delivery of enhanced HlPC assistance 51 NPV oftotal debt 1,140.5 1,112.4 1,161 4 1,173.5 1.211.1 1,217.4 1,148 1 1.291.5 1.479.1 1,164.5 1,313.6 NPV of outstandingdebt 1,1405 1,076.3 1.084 9 1,054 1 1.055.7 1,021.9 695 1 500.5 259.8 955 7 468.9 ORcial bilateral and commercial 506.5 523.7 548 9 537.0 555.1 536.5 299 9 220.0 110.4 466 1 203.6 Pans Club 413.3 438.3 459 0 451.9 465.8 449.2 284 7 217.9 109.5 398.4 200.6 Other officialbilateral 68.0 60.7 63 9 59.0 62.0 61.8 14 9 2 1 0.8 49.8 3.0 Commercial 25.2 24.6 25 9 26 2 27.3 25.4 0 3 0.0 0 0 17.8 0 0 Multilateral 634.0 554.8 536 1 517 0 500.5 465.4 385 2 280.5 149.4 489.7 265.3 Wwld Bank 413.7 376.5 369 6 362.2 352.8 343 3 283 5 200.9 102.2 342.3 169.1 APJB Group 73 1 70.8 70 4 69.9 69.4 68.6 61 3 50.1 37.2 67 6 48.6 IMF 1.3 0.0 0 0 0.0 0.0 0.0 0 0 0.0 0.0 0.1 0.0 Other multilateral 1459 107.3 96 0 84.9 78.3 73.5 50 4 28.5 10.1 79.6 27.6 NPV of new bormmng 0.0 34 1 76 5 119.4 155.4 195.5 453 1 791 0 1.219.3 208.8 844 8 V. After conditional delivery of enhanced HlPC and MDRl asslstance 4161 NPV of tota debt 1,670.6 1.301.7 1.298.2 741.4 768 8 805 5 803 4 1,040.5 1.339.7 957.3 1,076.0 NPV of outstandingdebt 1.670.6 1.267.4 1.221.5 621.9 633 4 610 0 350 3 249.5 1204 748.5 231.2 Officialbilateraland commercial 1,0202 695.5 667.3 537.0 555 1 536 5 299 9 220.0 110.4 539.2 203.6 Pans Club 922.7 609 7 575.1 451.9 465 6 449 2 284 7 217.9 109.5 470.9 200.6 Other official bilateral 66.1 61.0 60.9 59.0 62 0 61 8 14 9 2.1 0.6 49 5 3.0 Commercial 31.4 24 9 31.3 26 2 27 3 25 4 0 3 0 0 0 0 18.8 0 0 Multilateral 650.3 571 9 554.3 84 9 78 3 73 5 50 4 29.5 10.1 209.3 27.6 World Bank 362.6 376.5 369.8 0 0 0 0 0 0 0 0 0 0 0.0 102.6 0.0 ADB Group 70.7 70.8 70 4 0.0 0 0 0 0 0 0 0.0 0.0 19.3 0.0 IMF 1.6 0.0 0.0 0.0 0 0 0 0 0 0 0.0 0.0 0.1 0.0 Other multilateral 1954 124.6 114.2 84.9 78 3 73 5 50 4 2 9 5 10.1 87 3 27.6 NPV of new b m n g 0.0 34.2 78.7 119.4 1554 195 5 453 1 791.0 1219.3 208.8 844.8 Sources Tcgolese authorities and staff estimatesand projections. 11Includesthe effect of IMF HIPC reliefapplied to the PRGF approvedin April 2008. 2/ Includesthe impact of arrears clearanceoperations In 2008 by the Worid Bank and APJF (actual) and EIB, IFAD. OFiD and FEGECE (hypothetical) as well as the 2007 loans'canceliationby China. 31 Interms of simple historicalthreeyear averageof exports of gwds and nonfactorseMceS 41 Assumes intenm relief under the enhanced HlPC Initiativefrom November2008 to October 2010 and hll deliveryof assistanceIn November2010 51 Assumes full deliveryofestimated HlPC initiativedebt reliefas November2008. 61 MDRl assistanceapplies to the World Bank and the ADB Group,and star!s afterthe assumed completion point (December2011) 25 Table A5. Togo: ExternalDebt Indicators,2007-27 1/ Averages 2007- 2018- 2007 2008 2009 2010 2011 2012 2013 2014 2015 2027 2017 2027 (in percent,unlessothelwiseindicated) I. Beforetraditionaldebt-relief NPV of debt-to-GDP ratio 72.3 59.5 55.8 52.2 48.6 45.4 42.7 40.3 38.2 25.3 47.9 29.1 NPV of debt-to-exportsratio2/ 3/ 190.6 162.5 140.4 123.3 112.3 102.9 94.6 87.6 82.0 53.7 113.5 61.8 NPV of debt-to-revenueratio4/ 395.6 359.4 328.5 296.9 267.2 249.6 234.6 221.5 210.0 138.9 268.8 159.8 Debt service ratio ... 7.3 6.7 6.0 5.5 4.8 4.5 3.8 3.4 1.7 4.8 2.0 Debt service-to-revenueratio4/ ... 19.3 17.8 15.6 14.2 12.7 11.9 10.4 9.3 4.6 12.7 5.4 II. After traditional debt relief and mulitlateralarrears clearance 5/ 6/ NPV of debt-to-GDPratio 56.5 39.8 37.6 35.4 32.6 30.2 28.2 26.5 25.0 17.0 32.6 19.6 NPV of debt-to-exportsratio2 31 149.0 108.7 94.4 83.4 75.3 68.4 62.5 57.6 53.7 36.1 77.6 41.6 NPV of debt-to-revenueratio4/ 309.3 240.4 220.9 200.9 179.1 166.0 154.9 145.6 137.3 93.3 183.1 107.5 Debt service ratio ... 7.7 7.0 6.2 6.7 5.9 5.4 4.7 4.3 2.4 5.5 2.6 Debt serviceto-revenueratio4/ ... 20.3 18.5 16.2 17.3 15.5 14.5 12.9 11.8 6.6 14.5 7.2 111.After conditional delivery of enhanced HlPC assistance 7/ NPV of debt-to-GDPratio 66.9 43.3 40.6 34.5 33.4 31.5 29.2 26.9 24.8 16.7 34.3 19.0 NPV of debt-to-exportsratio2/ 3/ 176.5 118.0 102.2 81.3 77.1 71.4 64.7 58.4 53.2 35.6 81.8 40.3 NPV of debt-to-exportsratio(existing debt only) 176.5 114.9 96.2 73.1 67.2 59.9 51.7 44.1 37.4 6.2 71.1 15.2 NPV of debt-to-revenueratio4/ 366.2 261.2 239.1 195.9 183.5 173.2 160.3 147.8 136.3 92.0 192.2 104.3 Debt service-to-exportsratio ... 4.2 3.3 3.1 4.8 5.5 6.0 5.9 5.5 2.2 4.6 2.5 Debt service-to-revenueratio4/ ... 11.2 8.9 8.1 12.3 14.5 16.1 16.0 15.1 6.1 12.4 6.9 IV. After unconditional delivery of enhanced HlPC assistance 8/ NPV of debt-to-GDPratio 45.7 37.0 36.4 34.5 33.4 31.5 29.2 26.9 24.8 16.7 31.4 19.0 NPV of debt-to-exportsratio2/ 3/ 120.5 100.9 91.4 81.3 77.1 71.4 64.7 58.4 53.2 35.6 74.2 40.3 NPV of debt-to-exportsratio(existing debt only) 120.5 97.8 85.4 73.1 67.2 59.9 51.7 44.1 37.4 6.2 63.5 15.2 NPV of debt-to-revenueratio4/ 250.0 223.2 213.9 195.9 183.5 173.2 160.3 147.8 136.3 92.0 175.9 104.3 Debt service-to-exportsratio ... 4.2 3.3 3.1 4.8 5.5 6.0 5.9 5.5 2.2 4.6 2.5 Debt service-to-revenueratio41 ... 11.2 8.9 8.1 12.3 14.5 16.1 16.0 15.1 6.1 12.4 6.9 V. After conditional delivery of enhanced HlPC and MDRl assistance 9/ NPV of debt-to-GDPratio 66.9 43.3 40.6 21.8 21.8 20.9 19.4 18.0 16.7 15.2 27.3 15.4 NPV of debt-to-exportsratio2/ 3/ 176.5 118.0 102.2 51.4 50.2 47.2 43.0 39.0 35.8 32.2 66.4 32.6 NPV of debt-to-exportsratio(existing debt only) 176.5 114.9 96.2 43.1 40.3 35.8 30.0 24.7 19.9 2.9 55.7 7.5 NPV of debt-to-revenueratio4/ 366.2 261.2 239.1 123.8 119.5 114.6 106.6 98.7 91.5 83.3 154.1 84.4 Debt service-to-exportsratio ... 4.2 3.3 3.1 2.9 3.8 4.4 4.3 4.1 1.5 3.5 1.5 Debt service-to-revenueratio4/ ... 11.2 6.9 8.1 7.4 9.9 11.7 11.8 11.2 4.1 9.4 4.1 Sources:Togoieseauthoritiesand staffestimates and projections I / All debt indicatorsrefer to public and publiclyguaranteed (PPG)debt at end-December2007. 21Exportsare definedas in IMF, Balanceof PaymentsManual,5th edition, 1993. 31Based on a three-year average of exports on the previousyear (e.g..export averageover 2005-2007 for NPV of debt-to-exports ratioin 2007). 41Revenueis definedas centralgovernment revenue,excludinggrants. 51Shows the external debt situation after the full use of traditional debt-reiiefmechanisms,and assumingat least comparabletreatment from official bilateralcreditors. 61 Includesthe impact Of arrears Clearanceoperation by IDA,AfDB, EiB, IFAD, OFiD and FEGECEas well as the 2007 loans'cancellationby China. 7/ Assumes interim reliefunder the enhanced HiPC Initiativefrom November2008 to October 2010 and full deliveryof assistance in November2010. 8/ Assumesfuii deliveryof estimated HlPC initiativedebt reliefas end-December2007. 91MDRi assistance to the Wodd Bank, the iMF and the AfricanDevelopmentBank,and starts after the completion point (October2010). Assumes that MDRi has no impacton Togo's new borrowingover the projection period. 26 Table A6. Togo: Sensitivity Analysis,2007-27 1/ Averages 2007- 2018- 2007 2008 2009 2010 2011 2012 2013 2014 2015 2027 2017 2027 (In percent, unless othelwise indicated) I.Baseline scenario 21 NPV of debt-to-GDP ratio 45.7 37.0 36.4 34.5 33.4 31.5 29.2 26.9 24.8 16.7 31.4 19.0 NPV of debt-to-exportsratio 3/ 4/ 120.5 100.9 91.4 81.3 77.1 71.4 64.7 58.4 53.2 35.6 74.2 40.3 NPV of debt-to-revenueratio51 250 223 214 196 184 173 160 148 136 92 176 104 Debt service-to-exports ratio ... 4.2 3.3 3.1 4.8 5.5 6.0 5.9 5.5 2.2 4.6 2.5 Debt service-to-revenue ratio ... 11.2 8.9 8.1 12.3 14.5 16.1 16.0 15.1 6.1 12.4 6.9 II.Permanently lower growth, exports, revenues 61 NPV of debt-to-GDP ratio 45.7 37.0 37.3 36.5 36.4 35.5 33.8 32.2 30.6 32.8 34.9 30.8 NPV of debt-to-exports ratio3141 114.7 100.9 92.4 83.8 81.9 78.2 73.2 88.3 64.2 68.0 80.1 64.0 NPV of debt-to-revenueratio5/ 250 223 219 207 200 195 186 177 168 180 196 169 Debt service-to-exports ratio ... 4.3 3.5 3.3 5.2 6.2 7.0 6.9 6.7 4.0 5.3 3.8 Debt service-to-revenue ratio ... 11.3 9.3 8.7 13.5 16.4 18.6 18.9 18.3 10.8 14.3 10.5 Sources:Togolese authoritiesand staff estimatesand projections. 1/ All debt indicators referto public and publicly guaranteed (PPG) debt and are defined after HlPC debt relief assumed delivered unconditionallyat end-December2007. 2/ The macroeconomicprojections for the baselinescenarioare described in Section 111. 3/ As defined In IMF, Balance of Payments Manual, 5th edition, 1993. 41 Basedon a three-year averageof exportson the previousyear (e.g.,export average over 2005-2007 for NPV of debt-to-exportsratio in 2007). 5/ Revenue is defined as centralgovernment revenue, excluding grants. 61Assumes penanently lowergrowth, revenues and exportswith higher new borrowing, see section IV E for details. 27 TableA7. Togo: PossibleDelivery of WorldBankGroup's Assistanceunder the Enhanced HIPCInitiative,2008-2044 1/ (in millions of U.S. dollars, unlessotherwise indicated) Cumulative 2008 2009 2010 2011 2012 2013 2014 2015 2016 2028 2008-16 2008-44 Debt servicebefore HlPC Assistance 26.4 26.8 27.1 28.5 28.4 28.2 28.6 28.7 29.7 22.3 252.5 704.0 of which principal 21.6 22.3 22.7 24.3 24.4 24.4 24.9 25.2 26.4 21.4 216.2 704.0 of which interest 4.7 4.6 4.4 4.2 4.0 3.9 3.7 3.5 3.3 0.9 36.3 63.4 Debt Serviceafter MDRl Assistance 21 26.4 26.8 27.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 80.3 86.3 of which principal 21.6 22.3 22.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 66.6 86.3 of which interest 4.7 4.6 4.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 13.7 14.7 Savings on debt serviceto IDA 0.0 0.0 0.0 28.5 28.4 28.2 28.6 28.7 29.7 22.3 172.2 617.7 of which principal 0.0 0.0 0.0 24.3 24.4 24.4 24.9 25.2 26.4 21.4 149.6 569.0 of which interest 0.0 0.0 0.0 4.2 4.0 3.9 3.7 3.5 3.3 0.9 22.6 48.7 0.0 0.0 Savings as percent of debt servicedue to World Bank Grow 0 0 0 100 100 100 100 100 100 100 100.0 88.5 Source: Staff estimates. 1/ Enhanced HlPC assistance of USD 98 million in end-2007 NPV terms Will be fully delivered through the clearance of the Togo's arrears to IDA on grant terms (USD 146 million): 2/ Decision point is expectedto be reached in October 2008 but no delivery of interim assistance Will be provided by the World Bank Group. 28 Table AS. PossibleDelivery of IMFAssistanceunder the EnhancedHIPC Initiative2008-2018 1/ (in millionsof U.S. dollars, unlessotherwiseindicated) 2008 2009 2010 2011 2012 2013 2014 2015 2018 2017 2018 Nov-Dec (Basedon the USIlSDR exchange rat. as of July 31,2008) I PwMDRI Debt tellef (under the HlPC tntttattvsonly) ZI HlPC-ellglble debt semce due on IMF obligations 31 0 1 0 1 0 1 0 1 0 1 2 3 4 4 4 4 4 3 4 3 2 2 Prlnslpai 2 1 4 3 4 3 4 3 4 3 2 1 Interell 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 0 0 0 0 0 HlPC assirtancedepeiit~into member'sUmbrellaA C C O U ~ ~ Interim ~ssl~tance 41 0 08 0 0 6 Completionpoint disbursement51 0 21 Completion pint m ~ l ~ t a n ~ e 0 19 Completionpoint tntere~t 0 02 IMF aosIotanc~dihvdOwnschedule horn member'sUmbrellaAccount 0 03 006 0 0 3 0 24 IMF ~ i ~ l s t a n ~ e wthout ~ntemot 0 03 0 0 6 003 0 19 Ertimeted interertearnings 81 0 00 000 ... 0 05 Debt DBN~CB due on cumnt IMF oblgations sflei IMF a s ~ i i t i n ~ e 0 02 OM 0 1 0 1 0 1 2 0 4 4 4 4 4 3 4 3 2 2 Dellveryscheduleof IMF mSsiStanCe(In pewnt Of the total assistance on a now basls) 1 0 0 20 0 1 0 0 . 8 0 0 . Share of debt DBNICB due on IMF obligations coveredby HIPC assistance (in prcant) 57 7 58 4 307 . 1 0 5 . Proportion (in partent) ofeach repaymsnt felting due dunng IhB parid lo be paid by HlPC a ~ i i $ l a ~ e the principaldapsited in UmbrellaAccount 71 hom 57 7 58 0 2 9 0 . 8 7 - I1POIt.MDRI Debt rellef(under bothMDRlandHlPCIntttltve.) Pmiected pre MDRI cutoff dale debt at completion point 81 Deliveryof remainingHlPC ass1stmce fw post MOR1cutoffdate debt (onStock basis) 0 21 111 Debt sewloe due to the IMF .fur HlPC and MDRt debt relief 0 02 OM 0 1 0 1 0 1 1 9 4 4 4 4 4 3 4 3 2 2 Source Fund 81ane~timite~ prqectiens and 11Told IMF a ~ s i ~ t a nunder the enhanced HlPC lnltlatl~eIS US$ 0 312 mlllon in NPV terms calculated on the b w s Of data availableat the decision point, exduding interest earned on Tcgo's ~ e Umbrellakcwnt and on sommittsdbut undiabuisadamwnto as describej in footnote8 21Estimated deltteryof HlPC aSSlStBnC0 the absenceOf MDRt declsion 31 Forthcoming obligations estimated based on schedules in efect BP of May 31,2008 Interest&ligatlens do not include net SDR chiVgeS and ase9sment1 41The first delweryof interim86s1stmce of 20 percentof commitmentw11be deposited intoTqo'o Umbreta BCCOY~I at the ~xpecteddeason pint ~nOctober 2008 to cover PROF Interestobtigatlonsfalling due to the Fund o w the next 12 mnths The DBCOnd lntenm mslitan~eIS mourned to be dlSbYrSed !n October2009 51The remainingI M hgrant HlPC 86sisIance BPSUmedto be disbumedinto member'seccount at IhB assumedcornpietion point in October 2010, Which IS reflected in the calcuIatlon of int~est 81 Estimated interestearnings on (a) amwnts held in Togo's UmbrellaAccount, and (b) up lo the completionpant, Bmwnts committed but not yet diDbYrsed The projected intere51earnings are estimated based on assumed interestratelWhich are giadYalty riling to 5 percent~n2013 and bapnd. actud ~nteieitearningo may be higheror lower 71HlPC ~sslslan~eexpected lo cover PROF interest obligationsfalingdue b e w e n Notember 2008 and Septembar 2010 as there are no principalobligatianPfallingdue lo the Fund until October2013 1s 81 T q o hm repaid 119 MDRl~tgibledebt by January 2008 29 TableA9. HIPC Initiative:Statusof Country Cases ConsideredUnder the Initiative, March 18,2008 Target EstimatedTotal NPV of Debt-ta- AssistanceLevels li Percentage NandnalDebt Decision Conpletion GOV (Innillions 0fU.S dollars, presentvalue) Reduction SeMce Relief country Point Point ExportS revenue Bilateral and Multilateral inNPV of (Inmillions of (inpercent) Total c o m c i a l Total IMP World Bank Debt 21 US.dollars) Completion point reachedunder enhancedframework (23) Benin Jul 00 Mar 03 150 265 77 I89 24 84 31 460 Boli\ia 1,302 425 876 84 194 2,060 origiwlfromework sep. 97 Sep.96 225 448 I5 7 291 29 54 14 760 erihoncdfromework Feb. 00 Jun. 01 150 854 268 565 55 140 30 1.300 BurkinaFaso 553 83 469 57 231 930 originalframework sep. 97 JU~. no 205 229 32 I96 22 91 27 400 enhonced fromework Jul. 00 Apr. 02 150 195 35 I61 22 79 30 300 topping-up Apr. 02 150 129 16 112 14 61 24 230 Camroon Oct. 00 Apr 06 150 1,267 879 322 37 176 27 4,917 Ethiopia 1,982 637 1,315 60 832 3,275 enhancedframework Nov. 01 Apr. 04 150 1,275 462 763 34 463 47 1.941 topping-up Apr. 04 I50 707 155 552 26 369 31 1.334 M i a ,The Dec 00 Dec 07 150 67 17 49 2 22 27 112 Ghana Feb 02 Jul 04 144 250 2,186 1,084 1,102 112 781 56 3,500 Guyana 591 223 367 75 68 1,354 origrnolfromework Dec. 97 May 99 107 280 256 91 165 35 27 24 634 enhancedframework No". 00 Dee03 I50 250 335 132 202 40 41 40 719 Honduras Jul 00 Mar-05 110 250 556 215 340 30 98 18 1,000 Madagascar Dec 00 Oct-04 150 836 474 362 19 252 40 1,900 Malawi 1,057 171 886 45 622 1,628 enhancedframework Dec 00 Aug-06 150 646 164 482 30 333 44 1,025 topping-up Aug-06 150 41I 7 404 15 289 35 603 Mali 539 169 370 59 185 895 originnlfromework Sep. 98 sep. 00 200 121 37 84 14 43 9 220 enhoncedfromework sep. 00 Mar. 03 150 417 132 28s 45 I43 29 675 Mauritania Feb 00 Jun 02 137 250 622 261 361 41 100 50 1,100 M o h i q u e 2,023 1,270 753 143 443 4,300 originalfromework Apr. 98 3"".99 200 1.717 1.076 641 125 381 63 3.700 enhoncedframework Apr. 00 sep. 01 I50 306 194 112 18 62 27 600 Nicarwa Dec 00 Jan 04 150 3,308 2,175 1,134 82 191 73 4,500 Niger 663 235 428 42 240 1,190 enhancedframework Dec. 00 Apr. 04 IS0 521 211 309 28 170 53 944 topping-up Apr. 04 150 143 23 II9 14 70 25 246 Rwanda 696 65 631 63 383 1,316 enhomedframework Dec. 00 Apr-05 150 452 56 397 44 228 71 839 ropping-up Ap~-05 150 243 9 235 20 154 53 477 Sio To& and Principe 124 31 93 1 47 128 263 enhancedframework Dec 00 Mar-07 150 99 29 70 24 83 215 toppinx-up Mar-07 150 25 2 23 I 23 45 49 Senegal Jun 00 Apr 04 133 250 488 212 276 45 124 19 850 SierraLeone Mar 02 Dec 06 150 675 335 340 125 123 81 994 Tanzania Apr. 00 Nav 01 150 2,026 1,006 1,020 120 695 54 3,000 Uganda 1.003 183 820 160 517 1,950 originalfromework Apr. 97 Apr. 98 202 347 73 274 69 160 20 650 enhnncedframework Feb. 00 May 00 150 656 110 546 91 357 37 1,300 Zambia Dec 00 Apr-05 150 2,499 1,168 1,331 602 493 63 3,900 Decision point reachedunder enhancedframework (IO) Afghanistan Jul 07 Floating 150 571 436 135 75 S I 1,272 B-ndi Aug 05 Floating 150 826 124 701 28 425 92 1,465 Central African Rep Sept 07 Floating 150 583 217 365 27 209 68 782 Chad May 01 Floating 150 I70 35 134 18 68 30 260 Conga, Demrcratic Rep o f Jul 03 Floating 150 6,311 3,837 2,474 472 831 80 10,389 Congo Rep. of Mar 06 Floating 250 1,679 1,561 118 8 49 32 2,881 Guinea Dec 00 Floating 150 545 215 328 31 152 32 800 Guinea-Bissau Dec 00 Floating 150 416 212 204 I 2 93 85 790 Haiti NOV06 Floating 150 140 20 I20 3 53 15 213 Liberia Feb 08 Floating 150 2,846 1.420 1,426 732 375 91 4,008 Total assistance provlddcommitted 38,842 19,037 19,705 3568 9,155 1,192 X 66,980 Sources IMP and World Bank Board dec!s!onl, conpletlon point documents, decwon pomt documnts, prelimnaryHIPC documents, andstaff calculations l i Assistancelevelsareacountnes'respectwedecision or canpletmpomts, as applicable 21 Inpercento f the net present value o f debt at the decision or conpletion pomt (as applicable), afler the full use of traditional debt-rehefmchanmm 31 Equivalent to SDR 1,698 rmllmnat an SDRJUSD exchangerateo f 0 644524 ,as o f October4,2007