Breaking: Politically exposed Persons, proxies own over N146bn properties in Dubai

Report

No fewer than 800 luxury properties in Dubai, United Arab Emirate (UAE) have been linked to Nigerian Politically Exposed Persons (PEPs) or their family members, associates, and suspected proxies in a report titled: ‘Dubai Property: An Oasis for Nigeria’s Corrupt Political Elites’ authored by Matthew Page today.

 

PEPs are current or former political elites who are inherently at higher risk of carrying out illicit activity due to their position of power.

 

According to the report, the 800 Dubai properties linked to Nigerian PEPs are estimated to be worth well over N146 billion or $400 million.

This amount equals roughly two-thirds of the Nigerian Army’s annual budget and over three times the annual budget of the country’s Independent National Electoral Commission (INEC).

 

A 2014 report, for example, claimed that Nigerian buyers accounted for 60 percent of all serviced apartment sales in Dubai.

 

Likewise, in 2012, the sales manager for a Dubai real estate firm claimed Nigerians had invested up to $6 billion in Dubai property over the previous three years, recalling how “they are buying up units or floors. One client at the moment is looking at buying 27 apartments in Dubai, and they’re all $450,000 each.”

 

In a rare public disclosure that same year, the Dubai Land Department noted that Nigerians invested $52.2 million in property in the first six months of 2012.

 

Politically exposed Nigerians appearing in the Sandcastles data as at 2016, fall into eight broad categories: State Governors; State Governors’ Allies; Heads of Ministries, Departments, and Agencies; Individuals already investigated or convicted by anti-corruption agencies; petroleum sector officials; security sector figures; legislators; and suspected proxies.

Only one Judge and a handful of traditional leaders appeared in the Sandcastles data, suggesting that these types of elites have less appetite for Dubai property compared with their peers.

Banks or other money transfer agents in both Nigeria and the UAE do not appear to be reporting large or otherwise suspicious transactions by PEPs to national authorities. Unless Emirati and international authorities strengthen checks on such activities, questionable financial outflows from Nigeria to Dubai will continue to grow. Dubai property ownership cuts across all of Nigeria’s elite political, ethnic, and religious groups.

 

“An unknown proportion, perhaps substantial, of the over $400 million they have used to buy Dubai property could be part of a river of illicit financial flows out of Nigeria, which the think tank Global Financial Integrity conservatively estimated to total $178 billion from 2004 to 2013.

 

“Any Western governmental efforts to stem illicit financial outflows from Nigeria to Dubai will be constrained by strategic considerations,” the report read in part.

The author affirmed that: “Nigerian law enforcement agencies could seize upon some underexploited opportunities to deter PEPs’ illicit acquisition of Dubai property. The Nigerian government could launch an interagency investigative panel to scrutinize the last ten years’ worth of financial transfers between Nigeria and Dubai, flagging suspicious transactions that may have been ignored or previously overlooked.

“Emirati authorities arguably have the greatest responsibility and strong incentives for preventing Nigerian PEPs from laundering money through the Dubai real estate market. If Dubai becomes a central port for spoils and a haven for kleptocrats, its attractiveness to mainstream investors could fade over the long term. Unlikely to embrace one-sided reforms that hurt their global competitiveness, Emirati authorities may be willing to buy into broader international fixes—such as increased transparency of company ownership records—that impact all jurisdictions equally.

The report noted that Nigerian arrivals increased 28 percent in the first half of 2019 (compared to the same period in 2018), vaulting Nigeria for the first time onto the list of top twenty countries sending international visitors to Dubai.

 

In 2019, a global real estate firm ranked it third out of twenty global cities—behind only Cape Town, South Africa, and Sao Paulo, Brazil—in terms of how many square meters of prime property $1 million can buy. Dubai also has some of the lowest property fees (in other words, taxes) in the world, averaging just 3.6 percent over a five-year period.

 

All of the illicit activities thrive despite the launch of the Voluntary Offshore Assets Regularization Scheme which was established in 2018 by President Muhammadu Buhari’s administration which gave offshore asset holders an opportunity to disclose these assets and resolve any unpaid tax liabilities by paying a onetime 35 percent levy on their value.

 

 

TABLE 1: NIGERIAN PEPS LINKED TO PROPERTIES IN DUBAI
Individual Type Total Individuals No. of Properties
Suspected PEP proxy >158 226
Known Nigerian law enforcement agency suspects 13 216
PEP-linked businessperson 50 91
Security sector leader 14 71
Governor 35 69
Legislator 16 45
Department/Agency head 16 25
Minister 15 24
Nigerian National Petroleum Corporation official 11 19
Presidency staff member 5 13
Judge 1 1
Total 334 800
Source: Sandcastles data (last updated in 2016).