Hon. Femi Gbajabiamila, Speaker Nigeria’s House of Representatives
…EFCC seeks more powers to sanction erring developers
The Speaker of the House of Representatives, Hon. Femi Gbajabiamila has lamented upset that real estate developers in Nigeria are exploiting relevant legislative gaps to operate with impunity by stealing and fleecing billions of naira from hardworking Nigerians.
The Speaker stated this yesterday in Abuja, at the public hearing of the ad-hoc committee investigating the operations of real estate developers in the Federal Capital Territory (FCT). Gbajabiamila said with the current housing deficit in Nigeria, which was estimated to be between 17 and 20 million housing units, the potential cost of overcoming the deficit was about N6 trillion.
He noted that this outlined the huge opportunity that exists in the real estate sector. Gbajabiamila stated: “However, there are gaps in the relevant legislation that empower some real estate developers, while they capitalise on this opportunity to also operate with impunity, stealing away the dreams and billions of naira of hard-working Nigerians.
“A lack of accountability and regulation in the dealings between these real estate developers and home buyers has caused untold hardship to many already struggling Nigerians, who desire to own their own houses. It is our responsibility to introduce effective regulations to resolve these issues.”
The Speaker commended efforts of the Independent Corrupt Practices and other related offences Commission (ICPC) and Economic and Financial Crimes Commission (EFCC) in sanitising the sector, saying hard-working Nigerians should not lose their money to fraudulent developers with no consequence.
According to him, Nigerians had been crying out over the sharp practices, “and we cannot turn a deaf ear to their cries.” The Speaker said the resolutions of this committee would ameliorate and bring some lasting solutions to the lack of transparency, professionalism and accountability in the real estate sector, while also introducing legislation to protect home buyers from unfair contracts and other sharp practices highlighted in the sector.
Also, the Chairman of EFCC, Mr. Abdulrasheed Bawa, said from the record of the anti-graft agency, 8,000 real estate firms in FCT had been registered, while also partnering with the Real Estate Developers Association of Nigeria (REDAN).
Bawa who was represented by Director, Money Laundering, Mr. Daniel Esei, lamented that most of the real estate firms do not comply with the basic standard as enunciated under the Money Laundering Prohibition Act 2011 as amended.
This, he said, included ensuring that the developers identify and verify their customers before they do business. He stated: “So it makes open the possibility of that sector being used for money laundering purposes.
“So, in the course of inspection, when we go out to see these real estate firms, we discovered that most of them have insufficient knowledge of what is required of law – Know your customer. There is no proper identification, there is no proper profiling of whom a prospective home buyer is.”
Bawa said they have incidents of third parties buying on behalf of other persons. He added: “We have equally seen very clearly from our inspection report that some payments are made through Bureau De Change (BDCs) operators.
“There is no record to show that buyer A is the one making payment for property A. So, intermediaries are consistently being used, particularly the BDCs to make payment and this takes away traceability and it makes the issue of verification a bit difficult.” The EFCC chairman noted that they had escalated a couple of cases to the EFCC operation department for formal detailed investigation and prosecution.
He decried the inability of the anti-graft agency to mete out administrative sanction for erring entities. Bawa said, “But the global best practice for regulatory authorities is that they should have a criminal sanction regime and an administrative sanction regime.” He said there was a need to educate and train real estate professionals in order to prepare them to combat the menace of money laundering in the sector.
Bawa noted, “Our prayer will include as the country designated competent authority to monitor, supervise and regulate Designated Non-Financial Institutions (DNFIs) in Nigeria including dealers in real estates should be well resourced and legally empowered by empowering this unit, a department under the EFCC to register, monitor and supervise DNFIs in respect of the money laundering obligation.
“EFCC should be given clear powers to be able to mete out administrative sanction on all erring entities as effective, dissuasive and proportionate sanctions as tools in ensuring that there is a sound and a robust anti-money laundering regime.”
In his submission, the Chairman of ICPC, Prof. Bolaji Owasanoye said the agency had received a number of petitions from stakeholders in the real estate and housing sector, off-takers, prospective buyers and the general public regarding the behavior and antiques of real estate developers within the FCT and sometimes outside FCT.
He noted that the complaints and petitions varied, stressing that they border on forgery, double or multiple land allocations, allocation of land without the minister’s approval, revocation of land title without due process and non-delivery of projects. Owasanoye said others included embezzlement of sourced capital, land racketeering, the use of land syndicates and speculators, the marketing of fake layouts, fraudulent allocation of land, inordinate delay in processing of land documents for those who subscribe to their projects, among others.
He stated: “In addressing some of the issue raised in the petitions that are forwarded to ICPC, we have at different times successfully investigated and prosecuted some errant public officers and their collaborators including staff of the Federal Capital Development Authority, staff of Civil Defence, persons who abuse public trust, fraudulent real estate development operatives and other ancillary people, who have further deepened the mass housing gap in the FCT.”
