African debt management officers from eastern and southern African countries received a training on Loan Negotiation and Foreign Exchange Risk Management.
Dar-es-Salaam, 25 July 2023 – With the objective of enhancing the negotiation of fair and balanced loan contracts with external lenders, from 17 to 21 July 2023, the African Legal Support Facility (the “ALSF”), the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (‘‘MEFMI’’), the Currency Exchange Fund N.V. (‘‘TCX’’) and the Eastern and Southern African Trade and Development Bank (‘‘TDB’’) “Organisers”) have brought together African government debt management officers (“DMOs”) from the eastern and southern African region in a five-day workshop in Dar-es-Salaam, Tanzania.
An increase in global interest rates, climate change, and security shocks, have heightened pressure on many African economies’ fiscal spaces. Despite the international community’s prompt response, many African economies have since faced liquidity challenges, currency depreciation, and, importantly, loss of market access. As a result of these challenges, some African countries have returned to the syndicated loan market to finance their general budgetary and development needs. Improving the capacity of African governments in the area of loan negotiation and risk management is key to improving borrowing outcomes on the Continent.
The participants received practical training on loan negotiation; currency risk management; mitigation strategies for other risks such as interest rate risk, credit risk, and liquidity risk; and capital market development. A few of the training subjects include “debt sustainability, market development & risk management”, “interpretation of a typical loan agreement”, and “understanding collective action clauses”. The workshop was facilitated by trainers from the ALSF, MEFMI, TCX and TDB.
Approximately 50 DMOs and professionals of the public finance sector from 26 countries participated in the training, including from central banks and attorney general offices. The sovereign finance sector is a strategic component of African economies, and the ability of DMOs to effectively manage sovereign debt will play a vital role in the sustainable development of the continent.
About the Organisers
The African Legal Support Facility (the “ALSF” or “Facility”): Hosted by the African Development Bank since 2008, the ALSF assists African governments in negotiating complex commercial transactions, providing legal and technical assistance, and developing capacity building tools in the key sectors of infrastructure and public-private partnerships, energy, natural resources, extractive industries and sovereign finance.
The Macroeconomic and Financial Management Institute of Eastern and Southern Africa (“MEFMI”) is a regionally owned institute currently with 14 member countries. MEFMI activities put special focus on macroeconomic management, financial sector management and sovereign debt management.
The Currency Exchange Fund N.V. (“TCX”) is a development finance initiative that offers currency and interest rate derivatives in financial markets where such products are not provided by commercial banks or are hard to access for the parties who need them.
Established in 1985, the Eastern and Southern African Trade and Development Bank (TDB) is a regional development finance institution with investment-grade ratings and assets totaling USD 8.4 billion. TDB serves 25 economies in its region, with the mandate to finance and foster trade, regional economic integration, and sustainable development.
The TDB Academy is the capacity building arm of TDB Group, offering training, seminars, conferences, study tours and other human and institutional capacity development interventions in the financial and investment segments of interest to TDB and its partner.
TDB Academy is part of TDB Group, which also comprises TDB, the Trade and Development Fund (TDF), Eastern and Southern African Trade Advisers Limited (ESATAL), and TDB Captive Insurance Company (TCI).