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Dubai Property: An Oasis for Nigeria's Corrupt Political Elites

23/03/2020

For Nigerian PEPs in particular, Dubai is an accessible oasis far away from the political drama in their capital, Abuja, or the hustle and bustle of their biggest city, Lagos.

But a dearth of specific information about Nigerian PEPs' property in Dubai has long precluded a deeper analysis of the share of illicit financial outflows from Nigeria; that is, until 2016, when the Centre for Advanced Defence Studies (now known as C4ADS) acquired the data of a private database of Dubai real estate information (dubbed the "Sandcastles" data).

At least 800 properties were found to have links to Nigerian PEPs or their family members, associates, and suspected proxies. With such information and continued monitoring, Nigerian and Emirati authorities and national and international actors could ramp up their scrutiny on high-end property transactions involving Nigerian elites to ensure that these purchases are not being made with pilfered public funds.

The two countries could also deepen bilateral law enforcement cooperation by sharing information and assisting investigations more responsively and routinely.

For their part, Western governments, the United Nations, and other international organizations could press the UAE to make its property and corporate records more transparent.

The Scale and Significance of Nigerian PEPs' Dubai Property Holdings

  • The 800 Dubai properties linked to Nigerian PEPs are estimated to be worth well over 146 billion naira (N) ($400 million).3 This 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

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. Only Nigerian law enforcement agencies, working with their Emirati and international counterparts, can determine conclusively whether an individual's property was purchased with the proceeds of corruption. Except where reference is made to factual matters concerning specific identified individuals, this paper should not be read as making any general allegations of unexplained wealth or ill-gotten gains concerning any of the individuals or corporate entities it discusses.

  • Nigerian elites face few obstacles transferring large quantities of cash to Dubai. 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. The city hosts politically exposed Nigerians from across the country, not just its northern Muslim elites. The Sandcastles data are broadly representative of Nigeria's geographically and ethnically diverse political class.
  • In contrast to their Nigerian peers, Kenyan PEPs are linked to just a handful of Dubai properties. Given that Kenya also suffers from high levels of official corruption, it is unclear why the Dubai property market has not absorbed more of the country's illicit financial outflows. An explanation might be that Kenyan elites use proxies and shell companies more effectively and systematically or that the country's law enforcement and regulatory agencies are more effective than those in Nigeria.

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https://carnegieendowment.org/files/20203-Page-Nigeria%20Dubai%20Property.pdf