Togo has an agricultural economy with over 65% of its people engaged in subsistence and commercial agriculture. Togo is drought-prone but is food self-sufficient in years of ample rainfall. Coffee, cocoa, and cotton are the major cash crops, and the food crops include corn, sorghum, millet, cassava, and yams. The nation also has an active commercial sector and significant phosphate deposits upon which it draws for foreign exchange.
Political instability led to the suspension of international aid in 1992 as donors pressured the government into quicker action toward democratic reforms. Economic activity was further disrupted by an eight-month general strike that lasted until July 1993.
In January 1994 France suddenly devalued the CFA franc, cutting its value in half overnight. Immediately, prices for almost all imported goods soared, including prices for food and essential drugs. The devaluation was designed to encourage new investment, particularly in the export sectors of the economy, and discourage the use of hard currency reserves to buy products that could be grown domestically. Unfortunately, political instability and a general atmosphere of uncertainty prevented the country from taking advantage of the devaluation to improve the economy. Excessive military expenditures and stalled progress on privatizing state-owned enterprises were factors keeping the World Bank and IMF from resuming aid. During the 1995 to 1997 structural adjustment program, Togo succeeded in meeting demands and capturing funds only for the last year.
The 1998 presidential elections and 1999 legislative elections were characterized as undemocratic. These events led to reconciliation talks in July 1999 that laid the groundwork for a more democratic government, bringing back substantial development aid. However, legislative elections held in 2002 were boycotted by opposition parties, and the presidential elections of 2003 were deemed by opposition leaders to be marred by irregularities and fraud. This political climate has done little to encourage foreign investors, increase donor contributions, and provide the stability needed for economic progress.