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Ethiopia Tightens Real Estate Oversight as Money Laundering Risks Rise

BirrMetrics · 4 hours ago · Read the Full Story on BirrMetrics
Ethiopia Tightens Real Estate Oversight as Money Laundering Risks Rise
AI SUMMARY

Officials warn that rapid growth and foreign investment in Ethiopia's real estate sector have increased its vulnerability to money laundering and terrorism financing, prompting calls for stricter oversight.

  • Ethiopia's real estate sector is facing increased risks of being used for money laundering and terrorism financing.
  • Stakeholders reviewed the Real Estate Sector Money Laundering and Terrorism Financing Risk Study at an October 21, 2026 workshop.
  • Mulugeta Temesgen from the Financial Security Service stated that the sector requires special scrutiny due to its high volume of financial transactions.
  • The study identified a lack of a functioning national identification system and a central beneficial ownership registry.
  • Document authentication and registration are handled exclusively by government agencies that are not currently designated reporting entities under the AML framework.
  • Real estate agents have historically lacked fit-and-proper tests and risk-based supervision.
  • Construction companies and developers often remain outside the scope of anti-money laundering obligations.
  • Cash-based and informal transactions reduce audit trails, making the sector attractive for corruption and tax evasion proceeds.
  • UNODC country representative Abraham Liyew emphasized that protecting the industry from illicit financial flows is a shared responsibility between government and the private sector.
  • Ethiopia was placed on the FATF grey list in 2017 over AML/CFT deficiencies and was removed in 2023 following regulatory reforms.
  • Construction contributes about eleven percent of GDP and grows at almost nine percent annually, while Addis Abeba faces a housing deficit exceeding one million units.
  • The 2024 Real Estate Proclamation and subsequent legislation opened the sector to foreign developers and property ownership.
Read the Full Story on BirrMetrics
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