Nigerian PEPs stash $400m slush funds in Dubai properties

• Presidency staff, governors, legislators named in report for Carnegie Institute

The cream of the Nigerian establishment straddling the bureaucracy, armed forces, legislature, the executive are among a network of politically exposed persons (PEPS) in the country who have allegedly invested over $400 million (N146 billion) in some 800 Dubai properties. The funds invested are believed to be proceeds of illegal wealth.

In a report titled, “Dubai Property: An Oasis for Nigeria’s Corrupt Political Elites”, authored by Michael Page of the Carnegie Institute, and accessed by business a.m., the figured invested by this group of politically exposed Nigerians, in what many analysts describe as the ‘Dubai property racket’ is roughly equal to nearly “two-thirds of the Nigerian Army’s annual budget and over three times the annual budget of the country’s Independent National Electoral Commission”.

According to the report, “Dubai property ownership is an indicator—not definitive proof—that a particular politically exposed Nigerian possesses unexplained wealth. Although many PEPs’ property purchases exceed what their official salaries should permit, some politically exposed Nigerians have complicated personal financial portfolios combining marital and family assets, business holdings, charitable foundations, and other offshore wealth”.

The report said for politically exposed persons (PEPs) with ill-gotten wealth, Dubai in the United Arab Emirates (UAE) is an alluring destination for investing their gains because it exercises minimal oversight and has few legal or logistical obstacles to transferring large amounts of cash or purchasing property. It further said the $400 million invested may be part of the $178 billion stashed from Nigeria between 2004 and 2013.

The report is said to be based on the “Sandcastles” data acquired by the Center for Advanced Defense Studies (now known as C4ADS), which acquired the data of a private database of Dubai real estate information, with at least 800 properties found to have links to Nigerian politically exposed persons or their family members, associates, and suspected proxies.

Giving a breakdown of the ownership composition of the property, the report said politically exposed Nigerians appearing in the Sandcastles data 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.

Indeed, about 35 sitting or former governors are linked to 69 Dubai property, with some names mentioned in the Sandcastles data, while 15 sitting or former ministers and five Presidency staff are linked to 24 and 13 property respectively. Also, 16 legislators, according to the data, own 45 property in Dubai while 14 security sector leaders are linked to 71 property in the Middle East commercial capital.

Similarly, 16 departmental and agencies’ heads have stakes in 25 properties just as 11 of the state-owned oil company, Nigerian National Petroleum Corporation (NNPC) officials are linked to 19 properties.

The report also revealed that 50 politically exposed persons-linked businessmen have stakes in 91 property assets, while 13 known Nigerian law enforcement agency suspects account for 216 properties. Also, 158 politically exposed persons’ proxies have links to 226 properties, the report further claimed.

The Sandcastles data gave four reasons why Dubai’s property market is a particularly enticing destination for Nigerian elite investment. These are accessibility (easy to reach for Nigerians; permeability (the city allows both legal and illegal businesses to thrive); reliability in terms of safety of investment; and affordability.

On the policy implications of Nigerian PEPs’ purchase of Dubai property, especially if done using ill-gotten gains, the report said it generates a serious political and socioeconomic concern rather than a nuisance or victimless activity.

“Dubai’s receptivity to dubiously acquired funds fuels and incentivizes the looting of Nigeria by its kleptocratic elites. 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,” it said.