From one Little Switzerland to another

“Little Switzerland” is assuredly a favourable reference countries claim with good graces. A label that depicts living well, that attracts sympathy and curiosity. It alludes to abundant and generous, unaltered nature; large green plateaus surrounded by enchanting forests. A territory of waterfalls, wild escapes and the great outdoors. But it also represents a somewhat stable, prosperous and peaceful way of life.

 

Few regions around the world can boast such a nickname, this requires a certain set of predispositions, many dispositions. The days when Togo were in the running for this seem so distant today. Those days were however not that long ago! This small slender state bordering with the Gulf of Benin in the South and the Sahel in the North, used to be known as the “Little African Switzerland” for its beauty, the fertility of its land, a somewhat dynamic economy and the benevolence of its population. This was back in the 70s-80s. After which, the country went through troubling times and saw social tensions emerge. The economy failed to progress at the same pace as its neighbours. It is today one of the poorest countries in the world and yet. Yet, it is bursting with potential. One just needs to see it.

 

When we look at West Africa from Europe, the eyes are primarily drawn towards the major economic powers such as Nigeria, Ghana, Ivory Coast or Senegal. Togo and its seven million inhabitants tends to draw in more humanitarian foundations, NGOs or backpackers in search of authenticity.

 

Does this mark their fate? Having felt the energy that slumbers among the Togolese people, I do not think so. Such lack of regard on the international chessboard, or even the regional one, has been felt by many other small states.

 

The Luxembourg example

Somewhere in the heart of Western Europe, a Grand Duchy recognised under the name of Luxembourg were no exception to this feeling of marginalisation. In fact, it remained so right up until the late 80s. Then, everything changed. Propelled by a forward-looking ruling class, the country underwent severe changes. Why not turn our weaknesses into strengths?  Structural reforms can be operated with more agility in small states. There is also less politico-social gravity than with greater nations.

 

Thus, the Luxembourg authorities reoriented the country’s economy towards the booming financial sector. It’s all about timing. At the end of the eighties the sector experienced a great phase of deregulation and liberalisation that gradually allowed the Grand Duchy to set up a regulatory and fiscal framework favouring banking and financial players.

 

From this point on, the dynamic changed and the population came together, proud, welcoming and hardworking. Three decades later, Luxembourg continues to take advantage of its momentum to diversify its economy into sectors with high added value such the digital trend resolutely opening itself towards international markets. It now sits at the top of the world rankings for quality of life, purchasing power and attractiveness. The country is perceived as a true little Switzerland. And not only for the splendid landscapes of the Mullerthal Region located north of the capital.

 

This nation’s journey is suitable inspiration for Togo, at a time when Sub-Saharan Africa is suspected to experience the next great economic growth. So, where does it stand among the 54 countries that make up the mother continent and with which strategic partners should it establish lasting and profitable bilateral relations?

 

This humble article notably attempts to highlight the mutual benefits that could result from the realisation of a reinforced cooperation between Luxembourg and Togo in a geostrategic ecosystem dominated by the great powers

This humble article notably attempts to highlight the mutual benefits that could result from the realisation of a reinforced cooperation between Luxembourg and Togo in a geostrategic ecosystem dominated by the great powers.
Being a small state in Africa does not mean you’re a burden. This is evidenced by the unprecedented growth of Rwanda to the East, which has been able to put in place rapid and determined reforms on key issues such as corruption, cleanliness and women’s rights. One could also mention Botswana, to the south, which is described as an “African miracle” and is known by its very low level of corruption.

 

Meanwhile, West Africa has not yet seen the emergence of a rival for these two “success stories”. There is undoubtedly an opportunity to be seized, a beautiful story that, as of yet, remains unwritten. The country indeed boasts many intrinsic qualities.

You should see the queue offshore of Lome. At dusk, when you look out at the ocean, they create the illusion of a coastal town like a nocturnal mirage opposite the capital.

 

Firstly, the country enjoys an ideal geographical position in the centre of West Africa. With the Ivory Coast and Ghana to the West, Nigeria and Benin to the East. Lomé possesses the only deep-water port on the Gulf of Guiney. An expanding port that can dock the largest of ships. In fact, it is currently one of the main transit points towards the Sahel regions such as Niger and Burkina Faso. You should see the queue offshore of Lome. At dusk, when you look out at the ocean, they create the illusion of a coastal town like a nocturnal mirage opposite the capital. Not all of them offload here, however, Togo’s waters are the safest on the coastline. Therefore, ships prefer to wait there to avoid pirates. Three kilometres away from the port, you will find a brand-new airport, accessible to large cargo planes. The presence of Asky airlines makes Lome a regional hub, accessible from all of Africa’s metropoles. Furthermore, The Luxembourg company, Cargolux regularly land here despite it not being a priority route.

 

The pros and the synergies 

These characteristics make for a suitable import-export platform. Take agriculture for example. While in Europe, eating habits are increasingly tending towards natural nutritionally rich foods, Togo is brimming with highly sought-after foodstuffs, such as Fonio, a gluten-free grain. On the other hand, Luxembourg has the logistic infrastructure to become a priority transit line for exporting manufactured products to this African region. Lest not forget the needs of the West African diaspora who are constantly sending packages to their families; of which the majority is established in France on the other side of the Rhine.

Togo was under the protection of the Germans for a long time. This was from the XIX century up until the end of the first world war. At this time, Togo was in fact considered a model colonisation.

It is useful to remember that before being a shared colony between France on the east and Great Britain on the West, Togo was under the protection of the Germans for a long time. This was from the XIX century up until the end of the first world war. At this time, Togo was in fact considered a model colonisation. The Germans brought a large amount of infrastructure including the railway lines in service today. Even though German is scarcely spoken by the people, this influence has left permanent traces, whereby the Togolese have conserved the trademark rigour, trustworthiness, mutual respect and a strong work ethic. Togolese workers remain highly appreciated by all of West Africa.

 

 

One thing is for sure, Togo and Luxembourg share a double Franco-German influence while still preserving their own strong identity.

And the synergies do not stop there. Ecobank, Orabank, BOAD, EBID, Coris Bank International, etc. are all banks that have chosen to settle their headquarters in Lome. This significant presence of financial institutions should push Togolese leaders to follow suit and confirm the status of Lome as West Africa’s capital of finance. And this, in a context where direct investments from abroad to the continent are expected to double in the coming years. This calls for a strengthening of expertise to put in place a favourable business, regulatory and tax framework to encourage the domiciliation of funds intended to radiate in the region.

 

This significant presence of financial institutions should push Togolese leaders to follow suit and confirm the status of Lome as West Africa’s capital of finance. And this, in a context where direct investments from abroad to the continent are expected to double in the coming years. This calls for a strengthening of expertise to put in place a favourable business, regulatory and tax framework to encourage the domiciliation of funds intended to radiate in the region.

 

Suffice to say that the Luxembourg authorities have ample experience and are among the most legitimate advisors on this topic. Another strong theme is the digitalisation of the economy. Internet for the public albeit resolutely mobile, is coming to Africa for good. Its impressive to notice the phenomenal speed with which the Togolese youth is absorbing the advent of digital disruption. It is almost rare to see a young person without a smartphone on the streets of Lome. The walls seem to have fallen. The average age being no more 25 years, that’s a large span of society that is being nurtured by this revolution. The impact on the old socio-economic equilibrium should be resounding.  Africa will not experience the same “slow” evolvement of the digital economy as the West. The African continent as a whole will be able to feed off of two decades of innovation and disruption while being equipped with the appropriate modern infrastructure to quickly remediate their current shortcomings. According to several studies, it is estimated that between 2017 and 2025, the number of mobile Internet users in Africa will increase from 300 million to more than 1 billion! (See previous article, Africa in the mobile era). The extent of the socio-cultural upheavals that this will ensue is still poorly measured.  Between tradition and modernity, the continent will have to find a new balance. And Togo will have a strong hand to play. The University of Lomé hosts an IT department that is bursting with young talent. While in Luxembourg, Developers and IT engineers are hard to come by. There certainly seems to be room for collaboration. Luxembourg’s know-how in terms of data centres, connectivity and digital taxation are also good practices that Togo could harness to perfect its skills and make its mark.

The first sensible step in this direction would be the establishment of a double taxation treaty between the two countries.

Finally, the education and health sectors could only mutually benefit from the establishment of a chosen and privileged cooperation between these two nations.

 

A sensible relationship

For Koosmik, who is evolving between Luxembourg and Togo, the benefits of a potential strengthening of bilateral relations are obvious whether for transfer of expertise or win-win cooperation. Togo is set to become a land of welcome for Luxembourg companies wishing to approach the flourishing markets of West Africa. The first sensible step in this direction would be the establishment of a double taxation treaty between the two countries. The giants prefer to fuse relations with other giants. And the underdogs help each other to overcome the hierarchy. Togo is not a priority for France, Germany or Great Britain in comparison with Ivory Coast, Mali, Ghana or Nigeria. The same can be said in reverse for Luxembourg.

Togo and Luxembourg are similar in many respects. A humanly scaled capital, green and easy to live in. Very little crime or delinquency. Easy access to decision-makers through very short business channels.

 

And yet! One is among the richest countries in the world and the other is among the poorest! Could this be the start of a beautiful story? A word to the wise.

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Matthieu Crance

Matthieu Crance

Matthieu has gained significant experience in start-up entrepreneurship, business & strategy innovation. At Koosmik, he is the overseer of operations and resident philosopher.

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