The Civil Society Legislative Advocacy Centre (CISLAC) says the real estate sector is becoming an avenue for hiding stolen funds in Nigeria.
Ms Chinwe Ndubeze CISLAC Consultant said this at the presentation of a report on Anti-money Laundering titled “Nigeria’s Dirty Money and Real Estate: How Money Laundering through Real Estate Impacts Nigeria’s Fight against Corruption in Abuja on Tuesday.
According to Ndubeze, Nigerian real estate sector has long provided an opportunity for persons and companies to launder illegally acquired funds.
She said that the misuse of corporate vehicles for illicit purposes including money laundering has been facilitating the utilisation of corruption proceeds and ill-gotten gains from other criminal activities.
She said that this was because the sector was a significant contributor to the Gross Domestic Product (GDP) and that the economy and has the capacity to fast-track the growth of the nation’s economy if adequately structured.
She said that anti-corruption agencies affirmed that the real estate sector was the second most vulnerable money laundering sector next to the Bureau De Change operators in the country.
She said that corruption money channelled into the economy through the real estate sector can distort the market and inflate real property prices leaving people with no choice but to live in slums thereby causing housing deficit.
“While analysing money laundering through the real estate sector, six common denominators are identified: firstly, money launderers and criminals use third parties, professionals, family members and close associates to acquire high value real estate.
“Secondly, the use of pseudonyms to open accounts is frequent through which illegal funds were diverted into high-value real estate acquisitions, thirdly, the laundering of the proceeds of crime through the purchase of high-value real estate preferably abroad.
“Fourthly, the majority of the cases reviewed involved politically exposed persons and their associates who channel almost in all cases parts of a substantial volume of illegal proceeds into real estate in Nigeria and abroad.
“Fifthly, transfers of illicit funds through offshore ban accounts is very frequent while purchasing real estate property, and sixthly, laundering of illicit funds through real estate comes frequently with the aim of funding political parties,’’ she said.
Ndubeze said that while these findings were neither new nor unique to Nigeria, reforms to close loopholes leading to the gaps had been very difficult to implement.
Mr Isah Buhari, Director, Financial Policy and Regulation, Central Bank of Nigeria (CBN) said he was shocked when he saw the amount of money laundered through real estate as quoted by Trenchancy International.
Buhari said although measures against corruption existed in Nigeria, they could be implemented better adding that the Federal Government had made major strides in the fight against corruption recently.
“Some of the major reasons money laundering in the real estate sector is prevalent is that some of the anticorruption measures like assets declaration are not being followed.
“In Nigeria, most of the declaration are inaccurate and misleading unfortunately but the federal government is working along these lines to ensure it works and accurate.
“Also the land registry where people wp-signup.phped land they buy needs to be improved upon and there is also the issue of beneficial ownership wp-signup.php,’’ he said.
Buhari, however, said that the government was working to curb corruption through every means.
Earlier, Mr Auwal Rafsanjani, Executive Director, CISLAC, said that the report was one of the society’s activities under the anti-money laundering programme identified as a priority given the crushing volume of resources that Nigeria lost through the illicit financial flow.
Rafsanjani said Nigeria had been in the news for high-level fraud and continuously high levels of capital flight adding that the illegal proceeds were cleaned up through the real estate sector in highbrow cities.
He said that it was worrisome that the government was yet to start collecting taxes on property to serve as a deterrent to frivolous real estate investments.
“In spite of wreaking social consequences and economic impacts; the national security ramifications may be even more significant as money laundering using real estate is becoming a key vehicle to move corrupt money from crimes and terrorist groups.
“Real estates are the prime tool for laundering money of which some is used for terror-related activities.’’
Rafsanjani said that the report identified crucial policy problems why Nigeria has not been able to tackle money laundering through real estate while acknowledging its negative impact on the economy.
The News Agency of Nigeria (NAN) reports that key stakeholders like SCUML, CBN, ICPC, Nigerian Institute of Estate Surveyors and Valuers (NIESV) who attended the event reiterated their commitment towards curbing money laundering through real estate sector in Nigeria. (NAN)