Botswana real estate sector flagged as dirty money hotspot

Lewanika Timothy | Monday April 20, 2026 06:00

A recently released National Money Laundering and Terrorist Financing Risk Assessment report by the Non-Banking Financial Authority Regulatory Authority (NBIFIRA) uncovered that Botswana’s real estate sector is being exploited as a haven for washing dirty money, buried under the sector’s growing valuation and demand, especially in urban areas such as Gaborone.

The warning comes at a time when property values, particularly in urban centres such as Gaborone, have surged on the back of sustained demand, limited housing supply and the growing perception of real estate as a store of value. Over the years, property has become one of the preferred asset classes for both institutional and private investors, offering relatively stable returns amidst a volatile economic environment.

Researchers, which comprised financial experts from financial industry regulators and non-banking experts, found that of all financial sectors ranging from securities, insurance and banking, the real estate sector posed the highest risk to money laundering with over 34 reported cases between 2020 and 2024 amounting to over P1.1 billion.

“The assessment found that real estate poses the highest money-laundering vulnerability, driven by its large economic contribution and limited oversight, which enables the layering of illicit funds through high-value, often opaque transactions,” researchers said. “Real estate was identified as one of the principal channels through which criminal activities were facilitated.”

BusinessWeek reported last year that the average cost of a family home in Botswana reached an average of P1 million, signalling a strong bullish trend in the residential property market.

Rental prices followed suit, climbing to an average of P5,000, enriching investors but pushing home ownership further out of reach for the average Motswana.

Property prices have been rising across all segments, particularly the residential market in Gaborone, with market watchers warning of concentration in the urban area. The figures were drawn from property insider reports like the Ribbery property group report, which is often quoted in the Bank of Botswana’s monetary policy report. Property market researchers had further noted that low-end residential homes were attracting an average price between P400,000 to P800,000 whilst high-end properties rose by over 24.3% quarter on quarter to over P947,000.

It now appears that heightened activity in this sector has lured criminal masterminds into masking illegal transactions to hide illicit funds.

Researchers also found that the industry was experiencing a lot of cash-based transactions, which is always a money laundering red flag. The investigators also found that after the cash-based transactions, properties were being registered under obscure ownership, which sometimes entails registration under companies and trusts, masking the true owners and source of funds.

“Real estate presents opportunities for layering illicit funds through high value transactions, often cash-based, and structured to obscure ownership,” researchers noted.

The research methodology involves identifying and assessing the threat environment, with the assessments relying primarily on domestic criminal, intelligence, and Financial Intelligence Agency data. In addition, NBFIRA considered threats originating from neighbouring countries, along with any other sources of information and mechanisms deemed relevant to the analysis.