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Published: Friday September 6, 2013 MYT 7:00:01 PM
Updated: Friday September 6, 2013 MYT 7:01:00 PM

Somalia says foreign investigators clear it of U.N. graft accusations

MOGADISHU (Reuters) - Somalia said on Friday that international investigators commissioned by its government had cleared it of corruption accusations levelled by United Nations monitors.

The Horn of Africa country is striving to shake off the tag of one of the world's most corrupt nations as it emerges from two decades of conflict and lawlessness.

In July, the United Nations Monitoring Group on Somalia and Eritrea said Mogadishu's central bank had become a "slush fund" for political leaders and that the current governor played a central role in irregularities surrounding unaccountable disbursements of cash.

"What is crystal clear is that the Monitoring Group's allegations have no basis in fact," the Somali government said in its formal response to the U.N. report dated August 30 but released on Friday.

There was no immediate comment from the U.N. monitors.

The Mogadishu government said it had commissioned FTI Consulting, whose chairman for the Europe, Middle East and Africa region is British peer Lord Mark Malloch-Brown, and a U.S. law firm to investigate the findings.

Central Bank of Somalia Governor Abdusalam Omer has denied the allegations against him, branding them malicious.

"The Monitoring Group's obsessive and unrelenting attacks on Central Bank Governor Omer that he was complicit in pervasive corrupt activities are contrary to all of the evidence uncovered by the investigative team," the government statement said.

It accused the U.N. monitoring team of failing to make contact with key officials and gather a complete body of evidence before making its accusations.

Somalia is persistently ranked the world's most corrupt country on Transparency International's index of perceived graft.

Cleaning up management of public finances is a top priority of the Mogadishu government, although leading Western donors say it is too early to provide direct budgetary assistance.

Instead, nearly all aid is channelled through the United Nations and charities.

Asked if his government trusted the government, one senior diplomat dealing with Somalia told Reuters: "Politically we trust them, yes. Do we trust them with taxpayer money? Not yet. But our risk appetite is going up."

(Writing by Richard Lough; Editing by George Obulutsa and Mark Heinrich)

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