Ghana's real estate sector remains open to money laundering and illicit financial flows. The Real Estate Agency Council (REAC) issued this warning. This vulnerability persists despite the sector's significant contributions to investment, employment, and wealth creation.
Emmanuel Jeffery, Acting Chief Executive Officer of REAC, stated that elements attracting legal investment also expose the sector to abuse. Individuals seeking to conceal or legalize proceeds from illegal activities use property transactions for this purpose. This practice introduces illicit funds into formal economies globally.
The real estate sector is critical to Ghana's economy. It provides housing and facilitates investment. The sector also boosts economic growth, creates jobs, and generates wealth. However, its appeal makes it a target for those engaging in financial crime. This concern is particularly acute in Accra and other urban centers.
The warning came during a policy dialogue in Accra. Global Financial Integrity and REAC organized the event. The dialogue theme was "Gatekeepers or Enablers of Illicit Financial Flows? The Role of the Ghanaian Real Estate Professional." Mr. Jeffery emphasized the need for real estate professionals to serve as the first line of defense against financial crime. He explained that opaque ownership, cash payments, and weak due diligence facilitate money laundering. Informal brokerage practices also contribute to the problem.
Ghana has strengthened its legal framework against money laundering. This includes the Anti-Money Laundering Act, 2020 (Act 1044). The Real Estate Agency Act, 2020 (Act 1047) established REAC. REAC aims to promote professionalism, transparency, and accountability in the property sector. Mr. Jeffery noted REAC's efforts in licensing, inspections, and compliance monitoring. These measures ensure practitioners understand their legal responsibilities. The Council also works to educate the public.
This warning comes as Ghana undergoes its third-round mutual evaluation. This assessment is under the Inter-Governmental Action Group against Money Laundering in West Africa. It also aligns with Financial Action Task Force standards. The evaluation now focuses on the effective working of compliance systems, not just the existence of laws.
Regulators, financial institutions, and designated non-financial businesses must show effective compliance. Real estate professionals are part of these designated businesses. They have obligations for customer due diligence and record keeping. They must also report suspicious transactions and maintain compliance controls. REAC has introduced several measures to bolster Ghana's preparedness. These include licensing brokers, agents, and firms. The Council also created a national database of practitioners. Anti-money laundering awareness programs are also in place. These actions protect the sector's integrity and build public confidence in Ghana's property market. Property markets can absorb large amounts of capital, making this issue particularly important.