Africa economic policy reform program : interim evaluation of Togo"s cereals export liberalization program

Evaluation covers 8/86-5/88. GOT compliance with CP"s for the second tranche does not warrant release of the funds at this time. Although the first CP required the GOT to issue export licenses to private cereals traders for two seasons, no licenses were issued during the program"s first export season, 9/86-4/87. In the 1987-88 season, 97 tons of exports were licensed, but the procedure for getting a license was not particularly open or competitive. Declining food production in Togo over the 1986-88 period has clearly influenced the GOT"s attitude toward licensing exports, as the GOT believes it must control food supplies if it is to ensure food security. Although the evaluation team would prefer that licenses be given to all legitimate traders desiring them (vs. the CP approach of approving specific transactions), this is unlikely given the GOT"s inflexible approach to food security. Therefore the team recommends that the CP be met before the second tranche is released. A TA team, funded under a companion grant and only just arrived in Togo, should work with the GOT to encourage further trade liberalization. CP"s regarding local currency generations have not been met either: the GOT did deposit the equivalent of the first tranche cash transfer in an agricultural credit fund as planned, but it has not developed an acceptable plan for use of the funds. The TA team will help the GOT to develop such a plan. Since there does not seem to be the institutional capacity in country to manage the large amounts of local currency the second tranche will generate, and since the market structure of the agricultural sector limits the demand for credit, perhaps the best option would be to not program the local currency from the second tranche at all, which would allow the program to contribute to GOT deficit reduction on a one to one basis. The remaining two CP"s have been fulfilled. (1) In conjunction with World Bank structural adjustment guidelines, TOGOGRAIN has curtailed almost all its cereal marketing activities; one (permissible) exception was when the GOT authorized TOGOGRAIN to sell some of its stock in food deficit areas in southern Togo in 3/88. (2) Requirements that the GOT publish and disseminate agricultural production and price data have been nominally met, although greater use could be made of broadcast media, particularly radio. With the help of the TA team and USAID/T, the GOT should modify licensing procedures and develop more liberal export policies. As more licenses are granted, the second tranche can be released, probably by the end of the 1988-89 agricultural year.