Assessing Political Instability in Togo: Implications for Foreign Direct Investment and Regional Risk Exposure

Political instability in Togo has emerged as a critical risk factor for foreign direct investment (FDI) and regional economic integration in West Africa. The country’s recent constitutional reforms, which effectively entrenched President Faure Gnassingbé’s power indefinitely, have sparked widespread protests and violent crackdowns, undermining democratic norms and investor confidence [1]. These developments, coupled with escalating jihadist threats in the northern Savanes region, have created a volatile environment that amplifies geopolitical risks for emerging market investors.

Political Instability and FDI Volatility

Togo’s 2024 constitutional shift, which transferred executive authority to the President of the Council of Ministers—a role dominated by the ruling Union pour la République (UNIR) party—has been widely criticized as a “constitutional coup” [5]. This move, combined with gerrymandered electoral boundaries and suppression of opposition voices, has eroded institutional checks and balances, creating uncertainty for investors. While Togo has implemented business-friendly reforms, such as digitalizing public services and offering tax incentives, the perception of political manipulation and weak governance remains a significant deterrent [1].

FDI inflows have reflected this instability, with net inflows projected to decline over the next decade due to heightened political and security risks [2]. The 2024 Investment Climate Statement notes that Togo’s ranking on the Corruption Perceptions Index (126 of 180 in 2023) and its low Global Innovation Index score (114 of 131) further compound these challenges [3]. Investors are particularly wary of the government’s reliance on emergency measures to suppress dissent, which has led to arbitrary arrests and human rights abuses [2].

Regional Security and Cross-Border Spillovers

Togo’s northern regions have become a flashpoint for jihadist activity, with groups like Jama’at Nasr al-Islam wal Muslimin (JNIM) and Islamic State in the Greater Sahara (ISGS) expanding their operations from the Sahel [4]. The 238% surge in terror-related deaths in 2024—many linked to JNIM—has forced the government to extend a state of emergency in the Savanes region, diverting resources from economic development to counterterrorism [4]. This instability not only disrupts local communities but also threatens Togo’s role as a regional trade hub.

Lomé’s port, West Africa’s only deep-water port, is critical for landlocked Sahel states like Burkina Faso and Niger. However, the port’s strategic value has made it a target for smuggling and terrorism, raising concerns about supply chain vulnerabilities [6]. The geopolitical competition between ECOWAS and the Alliance of Sahel States (AES) has further complicated Togo’s position, as the country navigates competing pressures to maintain neutrality while addressing regional security gaps [1].

Regional Integration and Economic Implications

Togo’s political and security challenges have broader implications for regional economic integration. The country’s alignment with AES economic interests—despite its governance shortcomings—has preserved some trade connectivity with Sahel states, but its domestic instability limits its capacity to act as a bridge for deeper integration [3]. Meanwhile, ECOWAS’s weakened authority, exacerbated by military coups in Mali and Niger, has reduced its ability to enforce regional protocols, including those governing free trade and cross-border movement [5].

The homogeneity of raw material exports among ECOWAS members also constrains intra-regional trade, reinforcing vertical trade dependencies with industrialized nations [1]. Togo’s efforts to attract FDI through projects like the Adétikopé Industrial Platform (PIA) face headwinds from weak legal frameworks and inconsistent enforcement of reforms [4]. Without addressing these structural issues, Togo risks becoming a cautionary tale for emerging markets where political instability undermines economic potential.

Conclusion

Togo’s political instability and security challenges underscore the interconnected nature of geopolitical risk in emerging markets. For investors, the country’s governance issues and regional security dynamics represent a dual threat: domestic uncertainty deters capital flows, while cross-border instability disrupts trade and supply chains. While Togo’s strategic location and infrastructure investments offer long-term potential, the absence of meaningful democratic reforms and effective security governance will likely continue to depress FDI and regional integration efforts.

Source:
[1] Togo protests signal youth anger at dynastic rule [https://www.aljazeera.com/news/2025/7/4/togo-protests-signal-youth-anger-at-dynastic-rule-but-is-change-possible]
[2] Violent repression of protests in Togo [https://www.amnesty.org/en/latest/news/2025/07/togo-repression-protests/]
[3] 2024 Investment Climate Statements: Togo [https://www.state.gov/reports/2024-investment-climate-statements/togo]
[4] Assessing the Impact of Escalating Terrorism in Togo and the Sahel: Regional and Global Investment Risks [https://www.ainvest.com/news/assessing-impact-escalating-terrorism-togo-sahel-regional-global-investment-risks-2507/]
[5] Could Togo's New Constitution Jeopardize its Stability? [https://www.fpri.org/article/2024/04/could-togos-new-constitution-jeopardize-its-stability/]
[6] Lomé 's Port: The Hidden Influence on West Africa's Political Landscape [https://alafarika.org/5465/lome-s-port-the-hidden-influence-on-west-africas-political-landscape/]