Exposed! How politicians hide fortunes in real estate, hospitality sectors

EFCC Boss, Lamorde

The fight against corruption at all levels of government may not be yielding positive results as politicians are increasingly using property acquisition and investment in the hospitality business to launder the money they are stealing from the treasury.

Investigations by our correspondent revealed that the politicians, who hitherto preferred to put their money in the capital market and foreign bank accounts, have now opened their eyes to property acquisition in choice areas in Lagos, Abuja, Port Harcourt and Kano, among others.

Although it was gathered that a number of politicians still keep their money abroad, a large percentage of them now prefer to invest in property because of its easy conversion to liquid cash and also because it serves as a hedge against inflation.

The Economic and Financial Crimes Commission said during the week that it had uncovered money laundering schemes in the Federal Capital Territory in which the perpetrators disguised the proceeds of crime by investing in properties.

The Chairman, EFCC, Mr. Ibrahim Lamorde, said over 270 cases of land scams were reported to the commission in the last three years.

Globally, the property market in 2013 was the icing on the cake among various investment asset classes and in sub-Sahara Africa, particularly Nigeria, Ghana and Kenya.

STR Global’s pipeline data had predicted a growth of 61.4 per cent and 26.7 per cent in hotel supply in Lagos and Abuja, respectively in 2013.

W Hospitality, which specialises in the provision of advisory services to hotels, tourism and leisure industries, had also predicted that 5,000 new hotel rooms would be opened in Nigeria by 2017.

Various sources told our correspondent many politicians had bought properties not in their names, but in the names of family members, protégés, loyalists and shadow business outfits.

“Buying properties is the best form of tying money down now. The demand is always there for properties and it does not involve the risk of travelling with cash to another country. For instance, a lot of politicians will put up their houses for sale this year so as to be relevant in their parties ahead of the 2015 elections,” a source explained.

The Managing Director, Financial Derivatives Company Limited, Mr. Bismarck Rewane, said in an interview with our correspondent that the real estate sector would continue to enjoy increased patronage.

He pointed out that the sector would experience a slight lull towards the end of the year due to increased political activities ahead of the 2015 elections.

“Some properties may be sold at lower prices to quickly raise funds to sponsor election campaigns,” Rewane added.

The President, Nigerian Institution of Estate Surveyors and Valuers, Mr. Emeka Eleh, said, “The property market has always been a good hub for investment, but during the stock market boom, a lot of politicians moved their money to the capital market. But after the market collapsed a couple of years back, they all returned to the property market.”

The Principal Partner, Kola Akomolede & Co, an estate surveying and valuation firm, Chief Kola Akomolede, told our correspondent that there would be increased activities in 2014 being a pre-election year.

He said, “A lot of politicians will sell their properties in order to raise funds for the elections. Many of them have investments in properties. After the collapse of the capital market, a lot of politicians realised that the property market is a good place to invest money.

“The property market may collapse but it cannot be like shares; your investment in property cannot be reduced to zero whereas your investment can be reduced to zero in shares.”

Larmode noted that unscrupulous persons involved in money laundering preferred to pay for property acquisition with cash rather than purchase them with bank instruments.

According to him, the laundered funds are frequently converted into foreign currencies through Bureaux de Change before the purchases are made.

-The Punch