Debt relief, combined with Liberia's strategy to encourage investment, offers the country a chance to rebuild. (Photo Courtesy allAfrica.com)

The international investment watchdog, Global Witness, said it welcomed the decision by the World Bank to grant debt relief to Liberia, but warned that the government of Liberia needs to do more to prevent corruption.

“Global Witness is calling upon the Government of Liberia to promote better financial governance by implementing the recommendations of audits carried out as part of the HIPC process,” said a press statement issued by the group Tuesday this week.

The group’s statement recalled that five key ministries were audited by the Liberian government’s General Auditing Commission as a requirement under HIPC, including the Ministry of Lands, Mines and Energy.

It noted however that while these audits helped established Liberia’s readiness for IMF and World Bank assistance, reforms efforts in the Ministry of Mines left much to be desired in the areas of accountability and transparency in the mining sector.

“Being granted debt relief is an important step on Liberia’s road to economic recovery. The next will be to ensure that revenue from Liberia’s natural resources is not lost to corruption and mismanagement but instead helps to fund the country’s reconstruction,” the statement quoted Global Witness’ campaigner, Natalie Ashworth, as saying.

Perhaps as background for quoting Ashworth, the statement recalled that an audit of the Ministry of Lands, Mines and Energy reported financial irregularities amounting to over US $2.8 million, besides identifying major weaknesses in the internal controls within Liberia ’s diamond sector.

“These threaten the Government’s ability to implement the Kimberley Process – the international certification scheme to prevent the trade and export of conflict diamonds. The audit recommends that the mining ministry provides receipts for its unexplained expenditures and ensures that the Kimberley Process guidelines are followed,” the statement said.

HIPC aims to ensure that no poor country faces a debt burden it cannot manage.  The debt relief should free up resources to fund Liberia’s reconstruction effort following years of resource-fuelled conflict, it noted further.

“The Liberian government will only be able to make the most of this debt relief and harness the revenue from the country’s natural resources if it is gets serious about stamping out corruption, institutes the necessary financial controls and implements the findings of the audit of the mines ministry,” the statement further quoted Ashworth as saying.