Source: Global Network
([West Africa Talk] Issue 4, Issue 71, 2023.) Author: West African Research Center team, University of Electronic Science and Technology of China; Written by Koffi Dumor (Team member, West African Research Center, University of Electronic Science and Technology of China); Translator: Hong Ling (Foreign Chinese College); Proofreader: Zeng Jiarui (Foreign Chinese College); Finishing: Meng Yaqi, Huang Rui (School of Public Administration); Contribution: West African Research Center team, University of Electronic Science and Technology of China. ）
Located in West Africa, Togo is a small country in the region, but has a wide variety of natural landscapes and bioclimatic zones. The climate in the northern region of Togo is seasonal, with only one rainy season a year, similar to Sudan. The Atacola Mountains stretch across central Togo, presenting a diverse forest landscape and some monuments hidden deep in the tropical jungle.
The coastal area of Togo, known as the Dahomey Rift, is a relatively dry savanna region but plays a vital role: separating the high-rainfall areas of East and West Africa outside Togo. Togo's economy is largely dependent on its natural resources and food crops, such as cocoa, coffee and cotton, which are the main sources of its economic growth. In addition, agriculture and mining are also major drivers of the country's economy. Notably, Togo is one of the world's leading producers of phosphates, limestones and minerals, which further strengthens its position in the global mining industry.
Mining production and its impact
In 2013, Togo's total phosphate production was 1.2 million tonnes, of which exports accounted for 7.5%. Over the past few decades, Togo's production of fuel, limestone and hydrocement has increased significantly. Togo's bunker plant started operations in 2015 and can produce 5,000 tons of fuel per day, or about 1.5 million tons per year. In addition to limestone mining in the Tablibo basin near the coast, there are areas of Togo that contain diamonds and gold.
Togo's diverse soil, environment and climatic conditions create favourable conditions for the cultivation of various crops. Mining and quarrying dominate Togo's natural resource industry, and phosphate is Togo's most important mineral resource and its main export. At the same time, the area around Lomé has abundant limestone reserves, mainly for cement production. In addition, Togo has a large number of marble deposits.
Togo has a variety of mineral resources with commercial potential, including but not limited to iron ore, bauxite, uranium, chromite, gold, diamonds, rutile (titanium dioxide), manganese oxide and kaolin (porcelain clay). Although iron ore reserves are abundant, its metal content is up to 50%. More than three fifths of Togo's electricity comes from hydroelectric power, but oil remains an important source of energy to meet the needs of the population. As of 2016, Togo's gross domestic product (GDP) reached $4.39 billion, which grew to $4.767 billion in 2017, making the country the 156th country on the world GDP ranking. Togo is blessed with rich natural resources, including fertile arable land, stunning landscapes, mineral and forest resources.
1. Arable land
According to statistics, as of 2011, Togo has 5.2% of its arable land area and can grow a variety of crops, so subsistence agriculture is the backbone of the country's economy. Crops grown include cocoa, coffee, yams, cotton, cassava, soybeans, maize, rice, sorghum and millet. The production activities of cash crops and food crops in the country account for a large proportion of the labor force, accounting for about 42% of gross domestic product (GDP).
2. Minerals
Togo is an important mining country, producing mainly limestone, gold and diamonds. Togo is rich in mineral reserves, including iron ore, gypsum, bauxite, manganese, zinc, rutile, marble and other untapped minerals. (See Togolese mineral production chart from 2009 to 2020 for details)
3. Phosphate industry
Phosphate is one of the most important minerals in Togo, with reserves of about 60 million tons. This mineral occurs naturally in rocks with a high concentration of phosphate, and phosphate minerals are divided into many categories, such as trimethylene phosphatesite, monazite (phosphorium lanthanum), diorite, vanadium, erythritite, etc.
Phosphate extraction plays a vital role in Togo's mining industry, making the West African country the 19th largest producer of minerals in the world. Phosphate deposits are usually found in loose sedimentary rocks in open pits (open pits utilize dredging and use machinery for small-scale mining). In 2013, Togo produced about 1.2 million tonnes of phosphate, accounting for 7.5% of its total exports. In addition, several other phosphate mines are located in different areas of Togo and are regulated by the Togolese Ministry of Mines and Energy.
At the same time, according to reports, the production of Togo's existing phosphate mines increased by 22.3% in 2012 to 926,500 tons, a record high in six years. Phosphate production fell to 695,200 tonnes in 2010 from a recent high of 1.47 million tonnes in 2003 due to underinvestment and poor management, but has been on an upward trend since then, helped by investment from the state-owned Togolese Phosphate New Company. In 2010, Togo embarked on a $150 million expansion program that provided Togo with new mining equipment (such as professionally loaded vehicles). Nevertheless, Togo's new phosphate company expects to struggle to meet its initial target of increasing production to 1.5 million mt/year in 2013. Workers' strikes for higher wages led to a halt in phosphate production in October, but this was quickly resolved. World phosphate prices fell from a recent peak of about $200/mt in early 2012 to around $120/mt in October 2013, offsetting some of the gains from production growth. Despite this, the price of phosphate is still higher than the estimated production cost in Togo (about $70/tonne).
4. Limestone
Togo has abundant limestone reserves, especially in the capital Lomé region. Limestone can be obtained from quarries by digging rock, and rock excavation can be carried out on both the surface and underground. The location of the excavation is important and determines the composition of the excavated stone. The Togolese Ministry of Mines has regulated the mining of limestone in Togo for many years, and its rich reserves have contributed to a steady increase in annual production.
The excavation process is carried out on site, after which trucks transport the limestone directly to the factory. The limestone is crushed or cut into pieces according to the requirements of the end user. Limestone in Togo is mainly used to produce cement and other building materials, including mortar and hydrated lime.
5. Investment potential in Togo's natural resources and mining sector
The mining industry and natural resources are vital to Togo's economic development. The Integrated Industrial Park is committed to supporting Togo in expanding these industries in order to diversify its economy and ensure long-term sustainability. Although Togo is a small West African country, it is rich in natural resources that offer Togo many investment opportunities. Togo's mining industry is an important part of the country's economy and contributes greatly to gross domestic product (GDP). And Togo's mining industry focuses on phosphate, the country's most important natural resource. Togo has the largest phosphate reserves on the African continent and is the fifth largest phosphate producer in the world. The Government of Togo has invested heavily in the modernization of the mining industry and has created favourable conditions for investment by strengthening partnerships with international mining companies.
Togo's mining sector has attracted a lot of foreign investment in recent years. The Government has taken steps to improve the regulatory and regulatory framework for mining projects by increasing transparency and making the investment climate more attractive to potential investors. In addition, Togo's open-door policy to foreign investors makes it an attractive investment destination for mining investors. In addition to phosphates, Togo also has other mineral resources with investment potential, such as gold, diamonds and iron ore. The country's vast untapped mineral resources offer broad investment prospects for domestic and foreign investors.
In addition to mining, Togo's natural resources create investment prospects for investment in the agricultural sector. Togo's suitable climate and fertile soil are suitable for growing a variety of crops such as cotton, coffee, cocoa and cashew nuts. The Government has taken various measures to increase agricultural productivity and increase exports by encouraging and assisting agricultural investors. Investors who have invested in the natural resources and mining industries in Togo are likely to reap a substantial return on their investment, as a result of the Government's commitment to modernizing industries, creating a favourable investment climate and creating an investor-friendly environment by attracting foreign investment. In addition, Togo's rich natural resources and untapped potential offer plenty of investment opportunities for those willing to take the initiative to invest in the country.
2. Precautions for investing in Togo
As in other countries, investing in Togo requires careful consideration and analysis of factors that may affect the return on investment. Here are some things to consider:
(1) Economic indicators: It is quite important to analyze Togo's economic indicators, such as gross domestic product (GDP) growth rate, inflation rate, unemployment rate and other factors that may affect the investment environment.
(2) Infrastructure: When investing in Togo, it is important to consider the availability and quality of infrastructure. Togo has been investing in infrastructure, including roads, ports and airports, to improve its business environment.
(3) Investment incentives: The Government of Togo has implemented a number of investment incentives, including tax cuts and reduced import duties, to encourage foreign investment. It is also important to research and understand these incentives in order to identify possible benefits and conditions that are met.
(4) Market potential: Togo has a population of about 8 million and is a potential market for investors. It was essential to analyse the potential of the market, including consumer behaviour and purchasing power, to help determine the viability of investing in Togo.
(5) Regulatory environment: Togo has a relatively stable regulatory environment, but investors should be aware of the legal framework and regulatory framework of the industries in which they invest.
Third, Togo's own advantages
Located on the west coast of Africa, Togo is a potential investment hub among African countries. The country is rich in natural resources such as marble, wisp of sand, manganese, limestone, iron, peat, gold and uranium, especially important phosphate deposits, which account for more than 40% of its export earnings.
In terms of investment, the Government of Togo is taking various measures to address the lack of infrastructure. In addition, the Government of Togo offers various opportunities for cooperation to diversify production capacity, including low-cost, experienced labour that reduces production costs. Togo is also recognized as the only deep-water port in West Africa, which includes three terminals, all equipped with advanced machinery to meet the needs of the latest cargo ships and the largest cargo ships. As a result, Togo has become an important logistics, distribution and commercial centre within the subregion.