Sanitising the real estate sector of stolen government loot

With just about three weeks to the inauguration of a new federal government in what has been described as a victory for many Nigerians who sought change at the helm of government in the country after years of misrule and total negligence, industry observers such as myself are eagerly looking forward to the changes that the new government will bring as we usher in the Gen. Muhammadu Buhari administration.

The real estate sector will no doubt be one of the strategic sectors of the economy that stand to gain positively from the new administration, not just in terms of the implementation of new policies that will stimulate the sector and increase contribution to GDP but also in the provision of infrastructures such as power, roads, bridges, schools, hospitals, etc needed to improve and enhance the quality of life for all Nigerians.

Perhaps most importantly for the real estate sector is that the new administration will curb the flow of illicit funds being channelled into the country’s real estate stock by taking a hard stance against corruption from greedy politicians and civil servants who have been accustomed to using stolen public funds to finance their lavish lifestyles and self-aggrandizement.

The inflow of ill-gotten public funds into the real estate sector largely through oil revenue, i.e., oil subsidy, has had an adverse impact on the sector and this is clearly evident in the wave of new “luxury” high-end residential properties that can be seen across the major cities of Nigeria such as Lagos, Abuja and Port Harcourt that are being sold at exorbitant prices. A visit to the more affluent parts of Lagos such as Old Ikoyi and New Ikoyi (Banana Island), Victoria Island and its annex – Oniru Estate and Lekki Phase 1 – leaves one bedazzled at the amount of vacant “luxury” properties on the market with agency signage either for sale or  to let.

Aside from undertaking proprietary developments, corrupt politicians and civil servants also “launder” ill-gotten funds through established real estate firms using real estate as a front to disguise their wealth. Backed by rich politicians, and with no bank loans to service, real estate developers have become culpable and are reluctant to drop property prices preferring to hold out on the market until they get highest possible price for their projects to the detriment of the average income earner whose salary cannot even qualify for a mortgage with current interest rate charges.

The onus is therefore on the new administration to sanitize the real estate sector of illegal money and ensure transparency in real estate financing and transactions. For years, property prices in the country have been climbing higher each year due to the circulation of public funds with no hope of prices dropping to realistic values. Under this new administration, we hope that it will not be business as usual in the real estate sector if the fight against corruption is taken seriously and loopholes in the system plugged.

Rotimi Akinlose