Togo is the world's fourth-largest phosphate producer. Phosphate is a mineral used to produce fertilizers. Reserves are estimated at 260 million metric tons of first-class phosphate and 1 billion metric tons of carbonate phosphate. Deposits were found in 1952 not far from Lomé. The good geological characteristics and geographical position led to a low cost for extraction.
Established in 1974, the parastatal OTP has a monopoly on phosphates. Annual production was around 3.3 million metric tons in 2000, and OTP employed 2,200 people. After expansion during the 1980s, the industry suffered in the 1990s. In 1993 production was only 1.79 million metric tons, and prices bottomed at US$33 per metric ton, putting the company on the verge of bankruptcy. The devaluation of the CFA franc in 1994 restored the profitability of the phosphate industry. In 1997 output was 2.69 million metric tons, which realized US$110 million, though production fell in 1998 to 2.24 million metric tons. Although the industry looks good in the short term, it is likely to face growing international competition, especially as world phosphate fertilizer demand is falling. After World Bank negotiations, 40 percent of the OTP is to be privatized, mainly to outside investors.
The overvaluation of the CFA franc in the early 1990s hit the industrial sector hard. In addition, it was not helped by the political instability of the early 1990s, when industry's GDP contribution fell by a fifth. Once order was restored, and following the devaluation in 1994, industry's GDP contribution grew by 26 percent, and 20 percent in 1995, before settling to around 5 percent growth in 1997. Industrial activity recovered in 1998 after 2 bad years, despite the 1994 devaluation boost. The privatized construction sector led the recovery. In November 1999, the International Finance Corporation (IFC), the agency of the World Bank which lends to the private sector , announced a US$6 million loan to the building materials sector.
A duty-free "Export Processing Zone" was launched in 1989, and now includes 41 industrial units, which involve a US$50 million investment and 7,000 new jobs. It has attracted international interest, predominantly French, and advantageous terms for foreign investors if they export 80 percent of their production and give jobs to Togolese.