I.Coast needs to fight graft to clear big debts-IMF

ABIDJAN, Aug 21 (Reuters) - Ivory Coast needs to clear arrears and improve governance if it is to reschedule debts to foreign governments and secure relief from some of its $14 billion foreign debt, the IMF said on Thursday.

Resident International Monetary Fund (IMF) representative Philippe Egoume Bossogo told a news conference that the leading cocoa producer's external debts stood at 6.18 trillion CFA francs ($13.97 billion) in April.

Repayment arrears alone were more than 20 percent of gross domestic product (GDP) in Ivory Coast, long West Africa's next biggest economy after oil giant Nigeria -- although neighbouring Ghana is quickly closing the gap after Ivory Coast's 2002-3 civil war.

Bossogo said Ivory Coast needed to clear some of its debt arrears in order to reschedule its debts to the Paris club of sovereign lenders, and subsequently qualify for the Heavily Indebted Poor Countries (HIPC) initiative.

The HIPC programme is led by the IMF and its sister institution, the World Bank, as a way of clearing debts for poor countries that meet governance and other standards and to free up money to fund development rather than debt service.

"There is work to do in the field of governance in the cocoa and oil sectors, and we forsee audits of the Port of Abidjan and the BNI (National Investment Bank)," Bossogo said.

Ivory Coast's cocoa sector has long been tarnished by suspicions of widespread corruption.

President Laurent Gbagbo, who is widely expected to stand in postwar elections due in November, has launched a probe into graft in the cocoa sector which has seen the top managers of several industry authorities arrested and replaced.

Last week, five ministers were summoned to be questioned as witnesses in the ongoing investigation, which some cocoa exporters fear may disrupt the start of the coming October-March main crop season, during which the bulk of the annual harvest is produced. (Reporting by Ange Aboa; writing by Alistair Thomson; Editing by Jonathan Oatis)