Experts Warn of Unchecked Money Laundering in Property Market as Affordable Housing Lags Behind
Ghana’s real estate sector, once a symbol of economic growth, is now under scrutiny as evidence mounts that it has become a hotspot for money laundering, corruption, and illicit financial flows. With property prices soaring, affordable housing neglected, and cash transactions dominating high-value deals, stakeholders are raising alarms over systemic vulnerabilities that allow dirty money to flood the market unchecked.
A Safe Haven for Dirty Money?
A 2024 report by Global Financial Integrity (GFI) revealed that $48.8 million was laundered through Ghana’s real estate sector in just 16 documented cases, involving luxury properties and vast land acquisitions in Greater Accra . The Ghana Real Estate Developers Association (GREDA) has also warned that tightened banking regulations are pushing illicit funds into real estate, where oversight remains weak .
Key concerns include:
– Cash-Based Transactions: Unlike regulated banks, real estate deals often accept large cash payments, making it easy to obscure the source of funds.
– Lack of Beneficial Ownership Checks: Many properties are registered under proxies—family members, shell companies, or offshore entities—to hide true ownership .
– Skyrocketing Prices: High-end properties in Accra are selling at inflated prices, pricing out ordinary Ghanaians while attracting suspicious buyers.
Why Are Affordable Houses Ignored?
Despite a severe housing deficit, developers prioritize luxury apartments and commercial properties. Analysts cite three reasons:
1. Higher Profits: Luxury units yield quicker, larger returns than affordable housing.
2. Laundering Appeal: High-value properties are ideal for parking illicit wealth without scrutiny.
3. Weak Incentives: Government policies fail to mandate or incentivize low-cost housing projects.
GREDA’s Executive Secretary, Sammy Amegayibor, admits: “The sector’s opacity makes it a magnet for dirty money, distorting prices and sidelining genuine homebuyers” .
Why Are Houses Sold So Quickly?
Properties in prime areas like East Legon and Airport Residential change hands at alarming speeds. Investigations suggest:
– Front Companies: Criminals use real estate to “clean” money, flipping properties to legitimize cash.
– Speculative Investments: Foreign and local elites buy properties as stores of value, not homes, driving artificial demand.
– No Cooling-Off Periods: Unlike in regulated markets, Ghana lacks mechanisms to flag rapid, suspicious transactions.
Regulatory Gaps: Cash Payments and Lax Checks
Shockingly, cash purchases of properties remain legal, with minimal verification of buyers’ funds. The Financial Intelligence Centre (FIC) has limited power to investigate real estate deals, and:
– No Centralized Registry: Beneficial ownership data is scattered or nonexistent .
– Weak Enforcement: The Real Estate Agency Council (REAC), meant to oversee the sector, is not fully operational .
– DNFBP Loopholes: Designated Non-Financial Businesses (e.g., realtors, lawyers) rarely file suspicious activity reports .
Are We Building a Money Laundering Paradise?
The signs are ominous:
– Unoccupied Luxury Towers: Ghost buildings in Accra, bought with illicit funds, stand empty while homelessness rises.
– Links to Crime: GFI tied some deals to drug trafficking, corruption, and fraud .
– Global Precedent: Similar patterns in Dubai and London show how real estate can become a laundromat for dirty money.
Expert Recommendations:
1. Ban Large Cash Transactions: Mandate bank transfers for property purchases.
2. Public Beneficial Ownership Register: Expose who truly owns high-value assets.
3. Operationalize REAC: Empower regulators to audit developers and buyers.
4. Lifestyle Audits: Investigate sudden wealth tied to property acquisitions .
Conclusion: A Call to Action
Ghana’s real estate boom risks becoming a bust for transparency. Without urgent reforms, the sector will keep attracting criminals while leaving ordinary citizens stranded. As GREDA warns: “If we don’t act now, our cities
