According to The World Bankit is estimated that Global money laundering amounts to $1.6 trillion annually. A 2021 study by Transparency International Ghana estimated that Corruption costs Ghana $3 billion a yearwith some of these funds potentially finding their way into the real estate market.
There has been much speculation that Ghana is increasingly seeing an influx of illegal money into its real estate market.
According to MP Ningo Prampram, Samuel Nartey George, many real estate companies in the country engaged in money launderingusing inflated prices and frequent transactions to hide the source of their illicit funds.
Although defensive at first, the Ghana Real Estate Developers Association (GREDA) admitted that there is an issue of money laundering in the real estate industry.
However, the lack of a regulatory body to manage the industry has prevented its formal establishment over the past decade. This absence of oversight has created an environment conducive to money laundering activities in the sector.
Threats, Laws and (or Lack of) Regulation
The Financial Action Task Force (FATF) identified Ghana’s real estate sector as high risk for money laundering in 2022 Mutual Evaluation Report.
Likewise, the Intergovernmental Panel on Anti-Money Laundering in West Africa (GIABA) he’s got raises concerns on the vulnerability of the sector.
The Real Estate Agencies Act, 2020 (Act 1047) was passed to regulate the practice of estate agency, commercial real estate transactions and to establish an Estate Agency Board to oversee and enforce compliance with the law.
The law requires estate agents to register with the Council, carry out due diligence on their clients, report suspicious transactions and adhere to ethical standards.
However, the law alone is not sufficient to address the complex and dynamic nature of real estate money laundering.
Could technology help?
Technology could play a key role in helping Ghana tackle the real estate money laundering challenge. The technology could enable better data collection and analysis, improved transparency and accountability, and faster detection and reporting of suspicious activity.
For example, blockchain technology could be used to create a secure and decentralized real estate transaction ledger, which could reduce fraud, corruption and manipulation.
Money laundering is a serious problem affecting the Ghanaian real estate sector and requires urgent attention and action from both the government and the private sector. Technology could be a valuable tool to help Ghana tackle this problem, but it also requires political will, legal reforms and public awareness.
Follow us on our WhatsApp channel, Twitterand Instagramand subscribe to our weekly newsletter to make sure you don’t miss any news.
Related