I don't know if this is that much of a common phrase, I think I've heard it just once or twice.
But then, I don't think it means that whoever we call friends are perfect people so don't lie. Personally, I have few meanings that I can give that phrase, and out of it all I would choose to talk about how that it means that real friends don't lie when truth needs to be said.
Now, let's dive in. Real friends don't lie when truth needs to be said, in the sense that, true friends are the ones who tell you things the way they really are, they are the ones who sees you and see through you, they tell you the truth about your attitude, actions, behaviors, choices, and even those things you need to change or work on. They won't package lies for you or stay mute when you're heading in a dangerous/the wrong direction.
Let's see if this fits, a Yoruba proverb talks about how that when an older person calls a younger one aside to talk and such and that if they both come out smiling, then there wasn't anything serious in what they discussed, but if they come out frowning, then obviously they've spoken sense. Friends don't lie means, even though it hurt atimes, they will tell you the truth.
Friends can lie, they are humans. But when it really matters, friends will choose to tell you the truth rather than telling you lies to make you feel comfortable. When you need to be corrected, friends will tell you the truth, when you're drifting off, they will call you back to your senses, when you are falling they will call you back to attention, and when you're doing something odd/off, a true friend will speak up.
Friendship goes deep, and for someone to qualify for the position of a friend, then he must be ready to tell you things that night not still well with you, and you just be ready to take corrections too. Meaning, a friend is someone who's close enough to know certain deep things about you. Someone who can look you in the eye, and tell you the truth even when it's not comfortable for them, and may affect your relationship.... that's a True friend.
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Images are mine.
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