Togo's agricultural sector a magnet for overseas investors

The attractiveness of Togo as a destination for foreign investment has improved dramatically in recent years, thanks to its government’s efforts to improve infrastructure and cut red tape for businesses; according to the 2020 World Bank’s most improved place to do business, Togo now ranks first in the African continent. Enjoying a central strategic location, with West Africa’s only deep water port in Lomé, the country is seeing an uptick in FDI – not least into its agricultural sector, which is a mainstay of the economy; 72% of the country’s land area is arable land and the sector currently accounts for over 30% of Togo’s GDP (The World Factbook). These factors are acting as a magnet for overseas investors, particularly from Middle Eastern and North African countries where food security is a key national concern.

Key players
With cash crops such as cotton, palm oil, cocoa and coffee accounting for a significant percentage of the country’s foreign exchange earnings, commercial farming contributions are increasingly vital to economic growth. Below are some of the key players and initiatives:

• The Kalyan group of companies, owned by Ashok Gupta, have made significant inroads into Togo’s agrobusiness. For example Kalyan Resources Togo SAU has invested over US$65 million in establishing a 6,000 hectare palm oil plantation along with a processing plant at Agou, whilst another group entity, Kalyan Poultry Farm Togo, has ploughed a further US$12 million into the construction of poultry farming centres in Baja and Ando
• The Togolese and Egyptian governments have funded a 150-hectare farming project under the name Ferme Agricole Moderne Egypto – Togolaise d’Abatchang (FAMETA). Located in central Togo with an estimated investment value of 1 billion West African francs, FAMETA farms livestock and grows cereals
• The New Cotton Company of Togo (NSCT), formed in 2009 after cotton farmers took a significant stake in the formerly State-owned cotton company. Cotton now generates over 40% of Togo’s export revenues
• Societe Generale des Moulins du Togo (SGMT), a subsidiary of French group Somdiaa, which produces flour and has investments in seven Francophone countries
• Olam Togo SARL, a manufacturing and processing conglomerate with interest in coffee, cocoa, spices and edible nuts, and branch locations spanning 9 countries in West and Central Africa

Middle Eastern interest
The Togolese government has been proactive in attracting agricultural financing and risk-sharing. In addition to its initiative with the Egyptian government, the Agricultural Financing Incentive Mechanism based on risk-sharing (MIFA SA) was established in 2018 to support the development of SMEs in agricultural value chains.

The UAE’s Khalifa Fund for Enterprise Development (KFED), established an operational framework to provide funding assistance of over US$15 million to support MIFA SA activities in 2019. In the same year, the Saudi Arabian group KFB Holding Company along with MIFA SA and Banque Togolaise pour le Commerce et l’Industrie (BTCI) set up a 6 billion West African franc guarantee fund to rent mechanical equipment to farmers.

What’s next?
To provide affordable fertilizer required for the growth of its agricultural sector, the Togolese government intends to attract investments in its phosphate reserves. Early indications are that its approach is spurring new investment and in November 2019, Nigerian conglomerate Dangote Industries Limited, through its CEO Aliko Dangote, announced a US$2 billion investment partnership with the Togolese government to develop a phosphate processing plant. Dangote enters the Togolese phosphate industry alongside Switzerland’s Mambo Togo subsidiary, Compagnie des intrants agricoles du Togo in manufacturing fertiliser in Togo.