Zimbabwe has asked some of the world’s richest nations for bridge finance to end a debt standoff dating back to 1999, people with direct knowledge of the matter said.

Finance Minister Mthuli Ncube this month wrote letters to 10 nations seeking loans, three of the people said, asking not to be identified as the matter is confidential. Those loans would then be used to pay arrears owed to multilateral creditors including the World Bank, which are prohibited by their rules from new lending arrangements with the African country until outstanding debt has been cleared.

Ncube has, since his appointment in 2018, been trying to find a way out of the debt morass that’s deepened economic misery in a country rocked by periodic bouts of hyperinflation, currency crashes and shortages of goods since it first defaulted.

IMF Deal

This week Zimbabwe’s Treasury said it’s nearing a deal with the International Monetary Fund (IMF) for a staff-monitored program, which is key to reorganising the $21-billion debt pile. The IMF can’t lend money to Zimbabwe until the arrears to the World Bank have been cleared.

“The minister will communicate officially on this matter in due course,” George Guvamatanga, the Secretary for Finance, said by text message. He didn’t reply to a question about the letters. Ncube didn’t respond to a query sent by text message.

Zimbabwe has proposed securing $2.6-billion in bridge financing, the African Development Bank, which is also owed funds, said in an April 23 statement.

The UK, France, Germany, Brazil and a Middle Eastern country are among the nations approached, the people said. The US wasn’t contacted, they said.

Last month, Ncube told a state newspaper that seven countries would be approached.

The World Bank, AfDB and the European Investment Bank are together owed $3.2-billion, data from the Treasury shows. Of Zimbabwe’s debt $12.3 billion is external with some of that money owed to the countries it’s seeking financing from.

Brazil has received the request, a person familiar with the Brazilian government’s plans said, but it won’t be lending to Zimbabwe because of outstanding debt. The finance ministries of Brazil, Germany and the UK didn’t respond to requests for comment.

France encourages Zimbabwe to finalise its discussions with the IMF for the program and will then be open to working with other partners on supporting the country in its attempts to clear its debts, an official at the finance ministry said in response to questions.

The World Bank, IMF and AfDB didn’t respond to queries and the EIB said Zimbabwe hadn’t informed it of its plans.

While Belarus, Eritrea and Syria are all in default to the World Bank, Zimbabwe’s debt has been outstanding the longest.

The latest attempt for bridge finance has precedents.

In 2013, Myanmar used a bridge loan from Japan to clear almost $1-billion of overdue debt to the Asian Development Bank and the World Bank. The two institutions then provided new loans to Myanmar, which used that money to repay Japan. Somalia went through a similar process in 2020.