The Civil Society Legislative Advocacy Centre (CISLAC) has said that the real estate sector is now being used for hiding stolen and other illicit funds in Nigeria.
The Executive Director of CISLAC, Auwal Musa Rafsanjani, said this on Tuesday in Abuja, at the formal launch of the 37-page “Nigeria’s Dirty Money and Real Estate: How Money Laundering Through Real Estate Impacts Nigeria’s Fight Against Corruption.”
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He also lamented a report by the International Monetary Fund (IMF) as estimating that about $3.5trn was being laundered worldwide.
The CISLAC which contributes to the global rating by Transparency International (TI), alleged that there is a consolidation of dirty deals in the real estate sector, which was having negative toll on the country’s mass housing policy.
He also urged the FCT Minister to act decisively against land racketeering, where some officials allocate land to themselves or to fictitious persons who now re-sold the land at exorbitant prices.
Rafsanjani said that many posh properties litter major cities in Nigeria, without anybody occupying them, thus the need for the government to device a means of collecting property taxes as part of measures to address the problem.
“Cities like the FCT, Abuja, Lagos and Port Harcourt have become flashpoints where high levels of capital flight take place. While a study of the IMF concluded that about $3.5trn is laundered worldwide, media and court reports point to the involvement of criminals running fraud syndicates and drug trafficking in buying up or developing properties.
“Nigeria has been in the news for high level fraud and continuously high levels of capital flight, these illegal proceeds are cleaned up through the real estate sector in Nigerian highbrow cities such as Lagos, Abuja and Port Harcourt or in tax havens abroad.
“The impact of these investments is evident in the high cost of houses in both urban and sub urban areas, developed but uninhabited settlements and development of shelters in only selected areas. All these factors contribute immensely to housing deficit, inequality and poverty,” Rafsanjani said.
While presenting the report, Ms Chinwe Ndubeze, a CISLAC Consultant, said the Nigerian real estate sector has long provided 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 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.
She listed money launderers and criminals using third parties, professionals, family members and close associates to acquire high value real estate; using of pseudonyms to open accounts and majority of the cases reviewed involved politically exposed persons and their associates who channel almost in all cases parts of substantial volume of illegal proceeds into real estate in Nigeria and abroad among others.
On his part, the Director, Financial Policy and Regulation, Central Bank of Nigeria (CBN), Mr. Isah Buhari, said he was shocked when he saw the amount of money laundered through real estate as quoted by the 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,” he said.
Buhari, however, said that the government was working to curb corruption through every means.
