The economy of Togo is dominated by subsistence and commercial agriculture. Mineral products are a major source of foreign exchange. In 1991 the national budget included $284 million in revenues and $407 million in expenditures. Phosphate is the major mineral resource and by far the country's leading export item. The deposits at Hahoetoé and Kpogamé, directly northeast of Lomé, are mined by the government's Togolese Office of Phosphates. Togo is one of the world's largest phosphate producers. Marble is quarried by Sotoma (Société Togolaise de Marbres et de Matériaux), a mixed-economy company with shares held by the Togolese government and an Italian firm. Togo's considerable limestone reserves, also mined near Lomé, are utilized primarily for cement production.

To encourage private investment, the Investment Code of 1965 guaranteed foreign investors the right of freely transferring abroad all investment capital and income. The code also provided for tax benefits for priority enterprises. The trend in the 1970s of direct state involvement in the economy changed in the early 1980s to a pattern of offering incentives for foreign investment and privatization of state enterprises. Indirect taxes, almost entirely on imports and exports, account for most of the government's ordinary budget revenues. Direct taxes consist of an income tax, a progressive tax on all profits, taxes on wages paid by employers, a tax on rental values and land, and head taxes.

This small sub-Saharan economy is heavily dependent on both commercial and subsistence agriculture, which provides employment for 65% of the labor force. Some basic foodstuffs must still be imported. Together, cocoa, coffee, and cotton generate some 40% of export earnings, with cotton being the most significant cash crop despite falling prices on the world market. In the industrial sector, phosphate mining is by far the most important activity. Togo is the world's fourth largest producer, and geological advantages keep production costs low. The recently privatized mining operation, Office Togolais des Phosphates (OTP), is slowly recovering from a steep fall in prices in the early 1990's, but continues to face the challenge of tough foreign competition, exacerbated by weakening demand. Togo serves as a regional commercial and trade center. It continues to expand its duty-free export-processing zone (EPZ), launched in 1989, which has attracted enterprises from France, Italy, Scandinavia, the US, India, and China and created jobs for Togolese nationals. The government's decade-long effort, supported by the World Bank and the IMF, to implement economic reform measures, encourage foreign investment, and bring revenues in line with expenditures has stalled. Progress depends on following through on privatization, increased openness in government financial operations, progress towards legislative elections, and possible downsizing of the military, on which the regime has depended to stay in place. Lack of foreign aid, deterioration of the financial sector, energy shortages, and depressed commodity prices continue to constrain economic growth; however, Togo did realize a 3% gain in GDP in 1999. The takeover of the national power company by a Franco-Canadian consortium in 2000 should ease the energy crisis and if successful legislative elections pave the way for increased aid, growth should rise to 5% a year in 2001-02.