By Chinedum Uwaegbulam (Property & Environment Editor) and Matthew Ogune (Abuja)
• FDI into UAE climbs over 44% against UN estimates
• ICPC: Over 800 properties worth $400m linked to PEPs
• Malami: Africa loses $148b through IFF yearly
• Nigerians investing offshore to secure foreign passports
• No investor will come to a volatile environment
• Experts blame govt policies, archaic land administration system
The allure for all things foreign coupled with government’s struggle to keep rising inflation and escalating insecurity at bay have put investment in the real sector in jeopardy.
In same vein, foreign investors’ appetite for real estate sector is taking a back seat. The sector had been worse hit in recent years due to recession and unhealthy economic policies that have stifled investment. This unconducive environment has led to the shrinking of industry operations and weakened housing supply.
Closely linked politically-exposed persons’ (PEPs) penchant for safe haven in offshore property investment. Some weeks back, more than 130 choice assets reportedly bought with looted funds in Dubai, United Arab Emirates (UAE), were traced to some ex-governors, ministers and senators.
These assets are among the over 800 traceable to Nigerians in the UAE, including top security and military officers.
But back home, foreign investments in real estate is almost non-existent, save for a handful of investors that were invited for property development in some major cities like Lagos and Abuja, as well as those participating in retail property market, where South African firms play key roles.
In a reversal of fortunes, while Nigeria’s real sector is recording losses, Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and ruler of Dubai, said Foreign Direct Investment (FDI) into the UAE grew by 44.2 per cent to $19.88 billion in 2020, despite the economic turmoil caused by the global COVID-19 pandemic.
In a tweet, Sheikh Mohammed said: “Despite the UN’s estimates that global FDI flows decreased by 42 per cent in 2020 due to COVID-19, the UAE witnessed 44 per cent growth in FDI flows in 2020, compared to 2019. Good crisis management is a guaranteed investment.”
In contrast, foreign investors are absent in buying properties in Nigeria. Those that work in oil firms and telecommunication companies prefer luxurious serviced apartments in highbrow areas of Ikoyi and Port Harcourt. In rare cases, companies purchase these properties and use them as staff quarters. Yet, Nigerians in their thousands, especially the wealthy, are grabbing opportunities in the property market abroad and rushing for additional citizenship in foreign countries, which stakeholders say is due to the insecurity situation, political instability and unfavourable economic policies.
While some of the property investments abroad by Nigerians are genuine, others in real estate and education sectors are traced to Illicit Financial Flows (IFFs) such as money laundering by politically exposed persons (PEPs).
According to the Independent Corrupt Practices and Other Related Offences Commission (ICPC), most of the properties by Nigerian politicians in London and Dubai are held by proxies, families and shell companies. About 800 properties worth over $400 million have been linked to Nigerian PEPs.
The breakdown of PEPs linked to properties in Dubai shows proxies (226), Nigerian law enforcement agency suspects (216), PEPs –link business persons (91), security sector leaders (71), governors (69), legislators (45), department agency heads (25), ministers (24), Nigerian National Petroleum Corporation officials (19), presidency staff
THE Attorney-General of the Federation and Minister of Justice, Abubakar Malami, said Africa is estimated to lose $148 billion or about 25 per cent of its Gross Domestic Product (GDP) to corruption through IFF. The minister stated this
Source: Guardian
