JOINT WAIFEM/UNITAR REGIONAL WORKSHOP ON
MECHANICS OF LOAN AGREEMENTS
ORGANISED IN BANJUL, THE GAMBIA FROM 3rd TO 7th MAY, 1999


COMMUNIQUE

A joint UNITAR/WAIFEM sub-regional workshop on the Mechanics of Loan Agreements was held between 3rd to 7th May, 1999, at Tafbel Maisonettes, Banjul, The Gambia. The principal objectives of the workshop were to:

1. provide an overview of current developments in international finance and their implications for African countries;
2. provide an understanding of the primary sources of international finance available to African countries;
3. provide an understanding of the documentation utilized by each source.

The workshop provided the participants the opportunity of learning about sub-themes on trade restrictions and other procurement issues and how they affect loan agreements. Other salient issues covered by the workshop included the Highly Indebted Poor Countries (HIPC) initiative and its qualifying criteria and the Nigerian Export Credit Institutions and their operations.

The workshop also examined the various provisions which could form points for negotiation in a loan agreement, as well as their legal, financial and economic implications.

Participants exchanged views and applied the lessons learned in an exciting simulation exercise. Participants noted that many Sub-Saharan African countries have failed to reap the full benefits of sourcing cost effective external funds due to their inability to fully negotiate better terms as a result of:

1. inadequate preparations before proceeding for negotiations;
2. limited technical skills of the negotiating team,
3. inability to fully comprehend the clauses and terms of the contracts.

In order to address these weaknesses and lapses and ensure the realisation of maximum benefits from external loans and credit facilities, participants recommend that West African countries should:

1. adopt a multidisciplinary approach in the composition of their negotiation teams;
2. research and gather sufficient information in preparation for the negotiations;
3. in particular, legal expertise should be adequately utilised to recognise, interpret and negotiate provisions which could be disadvantageous to the interest of the borrower.

Participants further recommend:

1. that a follow-up to this workshop should be organised with a view to developing a blue print of guidelines for negotiations for Sub-Saharan African countries,
2. that this training be extended to top policy makers - ministers, politicians, permanent secretaries and other public sector officials involved in the borrowing process;
3. that IMF and World Bank personnel be involved in the exchange of views in subsequent workshops; and
4. that subsequent workshops should be of longer duration.

Participants express deep appreciation to the government and people of The Gambia for their hospitality and kindness. Our special thanks to the Governor of the Central Bank of the Gambia and Chairman of the Board of Governors of WAIFEM for finding time to declare the workshop open.

We also want to thank the organisers of the workshop, UNITAR/WAIFEM, for the excellent co-ordination. We also want to express our appreciation to the facilitators and the resource persons Dr. Bolaji Owasanoye and Prof. Daniel Bradlow.

We also wish to note the warm reception and cooperation of the management of Tafbel Hotel for making us comfortable and for more than adequately providing for our every need. Finally, we wish to congratulate WAIFEM/UNITAR for this successful workshop.

DONE IN BANJUL, THE GAMBIA, THIS 7™ DAY OF MAY, 1999


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