Togo’s extractive sector generated 124.25 billion CFA francs (US$208 million) in 2023, more than six times the 19 billion CFA francs recorded a year earlier, according to the country’s Extractive Industries Transparency Initiative (EITI) report.
However, the report notes that the increase does not reflect higher production, but is largely attributable to debt-clearing operations by the state-owned phosphate producer Société Nouvelle des Phosphates du Togo (SNPT).
The surge, equivalent to a 554 perecent year-on-year rise, was driven primarily by SNPT transactions worth 102.99 billion CFA francs. While the headline figures suggest a dramatic boost in sector revenues, EITI cautioned that the growth is not indicative of increased mining output and underscores the need to differentiate between operational performance and financial offsets.
Despite its small share of the economy, Togo’s extractive sector remains a key source of fiscal and foreign exchange revenue. Nominal gross domestic product (GDP) for 2023 was estimated at 5,563 billion CFA francs, meaning the mining sector contributed just 1.1 percent of GDP. However, the sector accounted for 15.6 percent of exports and 10.9% of public revenue, highlighting its strategic importance for government finances and international trade.
Government revenue from extractive industries rose to 119.4 billion CFA francs in 2023. The bulk came from corporate income tax and customs duties, with additional receipts from non-tax sources such as dividends and mining royalties. However, the sector is heavily concentrated: SNPT and SCANTOGO MINES alone contributed more than 97% of recorded revenues, exposing the government to operational and fiscal vulnerabilities.
More Read
The EITI report highlighted several structural weaknesses, including the heavy reliance on a small number of operators, limited transparency due to offsetting mechanisms, and implicit public subsidies. For example, preferential electricity rates for SNPT, WACEM and SCANTOGO MINES have been in place since July 2022. These discounted rates effectively reduce the revenue of the national electricity utility and represent a quasi-fiscal cost estimated at 9.98 billion CFA francs in 2023. Such implicit subsidies, while supporting industrial competitiveness, can mask the true fiscal contribution of the sector.
The report recommends a consolidated assessment of revenues, offsets, and quasi-budgetary support to provide a clearer picture of the sector’s net impact on public finances. According to EITI projections, mining royalties alone are expected to exceed 10 billion CFA francs in 2026, while corporate income tax from extractive companies could reach 201.1 billion CFA francs, reinforcing the sector’s role in government revenue generation.
Analysts say that while Togo’s mining output remains modest, the sector’s fiscal significance makes it central to broader economic policy and financial stability. Revenue concentration among a few operators, however, exposes the state to risks, particularly if production disruptions or offsetting practices distort actual income flows.
More Read
The phosphate sector is the backbone of Togo’s extractive industry, alongside a handful of other operators. Its dominance means that any operational, financial, or policy shifts at SNPT or SCANTOGO MINES can have outsized effects on government revenue. For policymakers, the challenge lies in ensuring transparency, rationalising subsidies, and creating a regulatory environment that maximises returns without discouraging investment.
EITI’s recommendations underline the need for robust fiscal oversight, particularly regarding offsetting mechanisms and quasi-fiscal measures. Consolidated reporting and clear accounting of subsidies and debt offsets could help Togo manage its mining revenues more effectively, strengthen budget planning, and provide a realistic view of the sector’s contribution to public finances.
Looking ahead, the government expects overall contributions from the extractive sector to rise further, driven by corporate tax payments and royalties. While mining output may not grow dramatically in the short term, effective management of fiscal flows and continued reforms could help Togo leverage the sector for economic development and maintain its critical role in exports and revenue collection.
