The Ghana Real Estate Developers Association (GREDA) has expressed deep concern about the increasing infiltration of illicit money into the country’s real estate sector. This poses serious risks to the economy, and GREDA is warning of dire consequences if the issue is not addressed promptly. The trend of illicit money flowing into the real estate sector is not limited to Ghana but is also observed across the West African sub-region.
GREDA’s Executive Secretary, Mr, Sammy Amegayibor, in an interview with the BFT in Accra, he highlighted several factors that make the real estate sector attractive for money laundering. These include the high value of properties, the low transparency in real estate transactions, and the ease of transferring ownership. Criminals find it easier to use real estate as a means to store and move illicit funds, as the scrutiny applied to financial institutions is more stringent.
One of the tactics employed by money launderers is purchasing properties in the names of relatives and friends, making it difficult to trace the true source and beneficiaries of the funds. This lack of transparency has significant economic and social consequences. Property prices in urban areas have skyrocketed, making it increasingly challenging for lower and middle-class individuals to afford homes or rent. The presence of unoccupied high-rise buildings, allegedly acquired with illicit money, has become a common sight in cities like Accra.
Money laundering not only affects the economy but also poses serious threats to national security. It provides resources to drug dealers, terrorists, arms dealers, corrupt officials, and other criminals. Additionally, it fuels corruption and organized crime, undermines the integrity of the property market, and contributes to rising property prices.
According to the United Nations Office on Drugs and Crime, an estimated $1.6 trillion, or 2.7 percent of global GDP, is laundered annually, with a significant portion flowing into sub-Saharan Africa due to regulatory gaps and inadequate collaboration between agencies.
In response to this pressing issue, GREDA is calling for a collective effort involving regulators and real estate professionals to establish better safeguards and robust detection mechanisms. They urge members to conduct thorough background checks on clients involved in high-value transactions and advocate for collaboration to prevent the continued inflow of illicit funds into the real estate sector.
GREDA emphasizes the need for strong anti-money laundering mechanisms, transparent financial practices, and cooperation between the real estate sector, financial institutions, security agencies, and the government to address money laundering comprehensively. It is crucial to close regulatory gaps, enhance collaboration, and implement effective measures to protect the real estate sector from the infiltration of illicit money.