TRADING WITH TOGO TOGO SEEKS FOREIGN INVESTMENT

TRADING WITH TOGO TOGO SEEKS FOREIGN INVESTMENT

Togo's government recently liberalized trade laws and is looking to develop two export-processing zones in the Port of Lome in hopes of luring much-needed foreign investment.

When completed, the zones will offer companies several customs and tax benefits. These include exemption from customs import and export duties, tax exemption for the first 10 years for any company setting up operations in one of the zones and a freezing of the tax rate at 15 percent beginning in the 11th year.The government is also looking to privatize many state-run enterprises, including textile plants, agricultural mills, a recording studio and a fish- smoking operation. And privatization seems to be attracting buyers.

Such U.S. companies as Apple Computer Inc., Hershey, Caterpillar Inc., General Electric Co., Xerox Corp. and Navistar International Corp. have set up operations in Togo to service the entire West African market. One success story has been a steel operation set up in 1984 by Societe Togolaise de Siderurgie, a U.S.-owned company that also makes fencing and wire. In 1989, the company became Togo's first multinational corporation.

Several U.S. companies recently expressed interest in investing in Togo, according to Michael Stack, director of developmental assistance for Africa at the Overseas Private Investment Corp. in Washington. The government agency, which offers political risk insurance to U.S. companies hoping to set up operations abroad, is involved in the planning of Togo's export-processing zones.

Mr. Stack said numerous opportunities exist, particularly in textile production, as Togo has an unused quota for the United States. A Hong Kong- based manufacturer recently invested in a textile plant with the intention of taking advantage of this quota, he said, and Asian investment is likely to increase.

"Given that situation, one could say that U.S. firms have lost ground in textiles in Togo," Mr. Stack said.

BUYING LOGO

Principal Exports

Phosphates, cocoa, coffee, cotton, palm kernels. There is some regional trade in cement, steel and textiles.

Potential Growth Exports

Textiles, steel and cement, records and tapes, plastic products, palm oil, arts and crafts.

Principal Foreign Markets

European Community 70 percent, Africa 9 percent, United States 2 percent.

Export Programs

Two contiguous duty-free export processing zones in Togo's port of Lome are projected to be operational by the end of 1990. Togo is a member of Ecowas, the Economic Community of West Africa.

Currency

Official market rate: US$1=277.5 CFA (Communaute Financiere Africaine) francs.

Major Banks

Banque Togolaise pour le Commerce et l'Industrie, BIAO-Togo, Ecobank Transnational Inc., Union Togolaise de Banque, Banque Libano-Togolaise.

Labor

Labor force is 1 million; agriculture 78 percent, industry 22 percent. Unemployment was 2 percent in 1987. Wages for semi-skilled labor in Togo are about 40 U.S. cents an hour, according to the Togo Free Zone Promotion Center in Lome.

Language

French is the official language. The major African languages are Ewe in the south and Kabiye in the north.

Climate

Hot and humid.

Time Difference

GMT +1, EST +6.

International Transportation

Air Afrique, Sabena, KLM, Union de Transports Aeriens, Nigerian Airways and Ethiopian Airways all offer service to Lome. There are 57 weekly international flights into Lome.

Where to Stay During Buying Trips

Lome: PLM Sarakawa, Sofitel Hotel du 2 Fevrier and the Pullman Hotel de la Paix.

Official (Bank) Holidays

Jan. 1, 13, 24; April 16, 24, 27; May 1, 24; June 4, July 4, Aug. 15, Sept. 24, Nov. 1, Dec. 25.

Business Hours

Government: Monday-Friday 7:30 a.m.-12 p.m., 2:30 p.m.-5:30 p.m. Banks: Monday-Friday 7:30 a.m.-11 a.m., 2:30 a.m.-4 a.m. Commerce and industry: Monday-Friday 7:30 a.m.-12 p.m., 2:30 p.m.-5:30 p.m.

Before You Go

Contact Marc Apter, Togo Information Service, 1706 R St. NW, Washington, D.C. 20009, (202) 667-8181; or Michael Stack, Overseas Private Investment Corp., 1615 M St. NW, Washington, D.C. 20527, (202) 457-7135.

SELLING TO

Principal Imports

Food, computer hardware, agricultural machinery, used clothing, fuels, durable consumer goods, capital goods.

Principal Imports From the U.S.

Computer hardware, telecommunication equipment, agricultural machinery, general consumer goods.

Potential Growth Imports From the U.S.

Telecommunications equipment, computer hardware and software, agricultural equipment, well-drilling equipment.

Principal Foreign Suppliers

European Community 70 percent, Africa 9 percent, Japan 7 percent, United States 4 percent.

Market Size

Population is 3.1 million.

Domestic Industries

Phosphate mining, steel, agricultural processing, cement, handicrafts, textiles, fishing, beverages.

Domestic Agriculture

Coffee, cocoa, cotton, yams, cassava, beans, rice, sorghum.

Domestic Transportation

Togo has a rail system that links most major cities. Rental cars are readily available.

Infrastructure

Lome is Togo's main port, but there is a pier south of Lome at Kpeme that is primarily used for phosphate exports. Togo has 355 miles of railway, 1,100 miles of paved road and two airports with permanent surface runways. Togo's telecommunications system is good - including one satellite link - and improving.

Entry Requirements

A passport is required. Visas are not required for American and Canadian business travelers.

Monetary Policy/Inflation

Inflation was 2.5 percent in 1987, the most recent year for which dependable data are available.

Economic Growth Outlook

The outlook for Togo's economy is favorable but dependent on foreign investment. The completion of two export-processing zones and a liberalization of Togo's investment laws should lure foreign capital.