Benefits of Making Business in Togo | Buy & Sell Business

1. BENEFITS OF MAKING BUSINESS IN TOGO WWW.MERGERSCORP.COM

2. At MergersCorp M&A International we help our clients confidentially buy and sell privately held businesses, aligning the interests of all parties for mutual success and satisfaction. It is our goal to make the process of either buying a new business or selling your current business as smooth and efficient as possible. We know how important confidentiality is to our sellers and we treat it with the utmost importance. WWW.MERGERSCORP.COM

3. BENEFITS OF MAKING BUSINESS IN TOGO WWW.MERGERSCORP.COM

4. Country Overview Togo, country of western Africa. Lomé, the capital, is situated in the southwest of the country and is the largest city and port.From its 32-mile coastline on the Gulf of Guinea, Togo extends northward for about 320 miles between Ghana to the west and Benin to the east to its boundary with Burkina Faso in the north. Togo consists of six geographic regions. The low-lying, sandy beaches of the narrow coastal region are backed by tidal flats and shallow lagoons, the largest of which is Lake Togo. Beyond the coast lies the Ouatchi Plateau, which stretches about 20 miles inland at an elevation of some 200 to 300 feet. The country is divided into five régions Maritime, Plateaux, Centrale, Kara, and Savanes for the purposes of economic planning. The five régions are subdivided into préfectures, each of which is headed by a district chief assisted by a district council. The history of Togo can be traced to archaeological finds which indicate that ancient local tribes were able to produce pottery and process iron. Most of them settled in coastal areas. Togo is one of the French-speaking countries in West Africa. The country is known for many things including its history, attraction sites, culture, and commercial activities.

5. Executive Summary The capital city of Togo is Lomé. With a population of 837,437, Lomé is also the country's most populous city. The city has a coastline along the Gulf of Guinea. The Togolese Republic, also known as Togo, sits in West Africa. Togo 2019 population is estimated at 8,082,366 people at mid year according to UN data. Togo population is equivalent to 0.1% of the total world population. Togo ranks number 102 in the list of countries by population. A United Nations member, Togo is also a member of the South Atlantic Peace and Cooperation Zone, La Francophonie and Economic Community of West African States, Organisation of the Islamic Conference, and the African Union. The continent is bounded on the west by the Atlantic Ocean, on the north by the Mediterranean Sea, on the east by the Red Sea and the Indian Ocean, and on the south by the mingling waters. Ghana, country of western Africa, situated on the coast of the Gulf of Guinea. Mono River, river rising near the Benin border, northeast of Sokodé, Togo. It flows 250 miles in a meandering course to empty into the Bight of Benin near Ouidah, Benin. For the lower part of its course it forms the border between Togo and Benin.

6. Introduction – Doing business in Togo Togo’s business environment is largely agriculture-focused and informal. Both subsistence and small-scale commercial farming employ 65 per cent of the country’s labor force and the informal sector prevails as it covers more than three times of employment in the formal sector. The main obstacles for Togolese businesses are the access to finance and the political instability. In order to help getting credit, Togo continues to increase its openness to foreign investment but its political and administrative operating environment is not very investment-friendly. For example, in 2012, it adopted a new investment code that promises equal treatment of domestic and foreign investors. However, investment is permitted only in certain sectors under the condition of having minimum value. Also, the rule of screening the investment case-by-case leaves a place for corruption, increasing the high informal cost while decreasing transparency. Moreover, the lack of regulatory flexibility in the labor market adds the burden to business, discouraging start-ups, despite the several reforms to ease starting a new business after 2010.

7. Conducting business in Togo commodity prices, and external debts. While industry and services play a role, the economy is dependent on subsistence agriculture, with industrialization and regional banking suffering major setbacks. Progress depends on follow through on privatization, increased transparency in government financial operations, progress toward legislative elections, and continued support from foreign donors. Togo has potential opportunities for investment and business in the sectors including; Infrastructure: opportunities in rail, air and inland ports to further, Mines and Energy: on- and off-grid power generation, Agriculture: Backbone of the economy, growth through productivity, Tourism and Financial sector. Major industries: Agriculture, Cement, Food Processing, Mining, Textiles. Main exports: Cocoa, Coffee, Phosphates. In the industrial sector, phosphates are Togo's most important commodity, and the country has an estimated 60 million metric tons of phosphate reserves. The economy of Togo has struggled greatly. The International Monetary Fund (IMF) ranks it as the tenth poorest country in the world, with development undercut by political instability, lowered

8. Taxation in Togo A number of tax changes have been introduced in Togo for 2017 by the Finance and Management Act 2017 (Law no. 2017-002). The main changes are summarized as follows: The corporate tax rate is reduced from 29% to 28%; The withholding tax on payments for services and royalties to non-residents without a permanent establishment in Togo is increased from 15% to 20%; The VAT registration threshold is set at 50 million CFA franc, with registration and payment required from the day threshold is reached, and payment obligations continued for a period of three years after the threshold is no longer met. Togo Tax Changes for 2017 including Tax Rate Changes, Deduction Restrictions, and Strengthened Transfer Pricing Rules

9. Trade negative trade balance of $6.51B. In 2017 the GDP of Togo was $4.76B and its GDP per capita was $1.66k. In 2017 Togo exported $1.63B, making it the 135th largest exporter in the world. During the last five years the exports of Togo have decreased at an annualized rate of -7.6%, from $1.83B in 2012 to $1.63B in 2017. The most recent exports are led by Refined Petroleum which represent 20.8% of the total exports of Togo, followed by Gold, which account for 12.3% In 2017 Togo imported $8.15B, making it the 103rd largest importer in the world. During the last five years the imports of Togo have decreased at an annualized rate of -2.4%, from $9.2B in 2012 to $8.15B in 2017. The most recent imports are led by Refined Petroleum which represent 43% of the total imports of Togo, followed by Crude Petroleum, which account for 12.9%. . Togo is the 135th largest export economy in the world. In 2017, Togo exported $1.63B and imported $8.15B, resulting in a

10. Banking in Togo Bank of Credit and Commerce International, the Libyan Arab- Togolese Bank of Foreign Commerce, the Banque Togolaise de Commerce et de L'Industrie (BTCI), and the Union Bank of Togo. The Central Bank of West African States (French: Banque Centrale des États de l'Afrique de l'Ouest, BCEAO) is a central bank serving the eight west African countries which share the common West African CFA franc currency and comprise the West African Economic and Monetary Union (UEMOA). The most important commercial and savings banks include the Banque Internationale de L'Afrique (BIA), ECOBANK Togo, the

11. Our M&A Process NEGOTIATION & CLOSE POST MERGER INTEGRATION (PMI) INTEGRATION (PMI) POST MERGER TARGET APPRAISAL APPROACH DUE DILIGENCE Key Areas  Target & market analysis;  Initial assessment of synergies & value drivers;  Indicative valuation;  Go or No-Go decision;  Preparation of transaction documents (NDA – Non- disclosure Agreement/LOI- Letter of Intent);  Select Transaction team;  Appoint advisors;  Consider funding ability.  Initial approach letter;  Signing of NDA;  Prepare & share initial information requests;  Formulation of LOI (Letter of Intent) & possible negotiations;  Initial meeting and Q&A;  Circulate information on the Target to the Transaction team.  Set scope of due diligence;  Set up VDR (virtual data room);  Coordinating of due diligence, further meetings and Q&A sessions;  Consider points relevant to the Post-Merger (PMI) phase;  Revisit indicative valuation & prepare detailed valuation based on due diligence findings;  SPA negotiations with the seller;  Development of final structure (share/asset deal) and final valuation;  Approvals;  Signing of SPA & Close.  Consider the extent of integration;  Development of 100 Day PMI Plan;  Consider short & long term objectives;  Estimate requirements to capture synergies;  Determine resource needs & optimal allocation. Parties Involved  CFO;  Head of M&A;  Accountants;  Corporate finance advisors;  Consultants.  Senior management;  CEO, CFO, CTO;  Strategy director;  Head of M&A;  Head of Business Development;  Consultants.  Company general counsel;  Lawyers;  Senior management.  Company general counsel;  Lawyers;  Senior management/HR. 11 © Midaxo 2018 www.midaxo.com

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