The Republic of Togo stands at a pivotal moment in its fiscal trajectory, with public debt projected at 60.2% of GDP by June 2026—a figure that, while still below the 70% ceiling set by the West African Economic and Monetary Union (WAEMU), underscores a critical turning point in its borrowing strategy.

At first glance, this ratio may appear reassuring, yet its significance lies not in its absolute value but in the shifting dynamics of debt management. While the debt-to-GDP ratio has edged down from 62.8% at the close of 2025, the total debt burden has continued to swell in absolute terms, rising from 4,312.6 billion FCFA to 4,458.1 billion FCFA over the same period.

The apparent contradiction—declining relative debt but growing absolute obligations—stems from a nominal GDP expansion that has outpaced the increase in debt levels. This development is not a cause for complacency, however. It signals a narrowing fiscal window: with just 9.8 percentage points remaining before hitting the WAEMU threshold, the government’s room to maneuver has diminished significantly.

Beyond the 70% threshold: why the ceiling matters more than ever

The WAEMU’s 70% debt-to-GDP benchmark is not merely a numerical target—it is a safeguard against financial instability. When a nation nears this limit, lenders often grow cautious, demanding higher interest rates to offset perceived risk, thereby increasing the overall cost of borrowing. This can trigger a vicious cycle: higher interest payments consume a larger share of public revenue, leaving fewer resources for critical spending on infrastructure, healthcare, and education.

Togo’s current debt profile reveals additional vulnerabilities. Data from 2024 highlights a sharp decline in the average maturity period of regional bond issuances, dropping from seven years in 2022 to just 1.5 years. This shift has forced the government to refinance short-term obligations at higher frequencies, exposing it to volatile market conditions and liquidity risks.

Compounding these challenges, end-of-year financing constraints in 2025 led to a backlog of unpaid obligations equivalent to 0.6% of GDP—further straining the country’s fiscal resilience. The message is clear: while the 70% ceiling may still be a safe distance away, the real risk lies in the quality and sustainability of the debt, not just its volume.

Rethinking borrowing: the pivot toward concessional financing

In response to these pressures, the Togolese government is recalibrating its debt strategy, placing greater emphasis on concessional external financing over short-term regional instruments. The goal is twofold: to secure longer repayment terms and lower interest rates, and to reduce reliance on high-cost domestic borrowing.

Concessional loans from multilateral institutions such as the World Bank and African Development Bank offer several advantages. Their extended grace periods and extended maturities allow for more gradual debt servicing, easing the immediate strain on public finances. Unlike regional bonds, which often carry shorter durations and higher yields, these loans can help stabilize the country’s debt profile by aligning repayment schedules with revenue-generating investments.

However, the shift toward external financing does not eliminate risk. Every new loan—whether from a regional market or an international partner—still contributes to the overall debt stock and falls within the WAEMU’s 70% threshold. The effectiveness of this strategy hinges on two factors: the terms secured and the economic returns generated by the borrowed funds.

Where does this leave Togo’s growth aspirations?

The International Monetary Fund (IMF) has labeled Togo’s public debt as sustainable, yet it warns that the margin for absorbing new shocks remains thin. The country’s ability to borrow further without compromising fiscal stability now depends on whether new loans can translate into durable economic growth.

To achieve this, borrowed funds must be deployed efficiently, financing projects that enhance long-term revenue streams—such as critical infrastructure, agricultural modernization, or digital innovation. Failure to do so risks transforming debt into a burden rather than a catalyst for progress. The equation is simple: if debt costs exceed the returns on investment, fiscal health will inevitably deteriorate over time.

For Togo, the path forward requires more than adherence to the 70% ceiling. It demands a strategic recalibration—one that balances immediate financing needs with long-term sustainability. The country must avoid the pitfall of borrowing merely to service existing debt, and instead focus on leveraging debt as a tool for inclusive growth.

A final reckoning: debt as a double-edged sword

The era of unrestrained borrowing is over. Togo’s debt trajectory is no longer a question of how much it can borrow, but of how wisely it can invest. With fiscal space shrinking and lenders tightening their terms, the government faces a clear choice: either tighten the belt on non-essential expenditures, raise revenue through tax reforms, or risk a future where debt repayments erode the very services citizens depend on.

The 70% threshold may serve as a useful warning sign, but it is not the ultimate measure of fiscal health. What truly defines success is whether Togo can transform its debt into an engine of development, rather than a chain around its economy’s ankle. The time to act is now—and the decisions made today will shape the nation’s economic destiny for decades to come.

By Boureima Amadou — Journalist