In furtherance of Federal Government’s ongoing reforms to open Nigeria’s economy for improved investments, the Financial Reporting Council of Nigeria (FRCN) on Monday disclosed that it had initiated plans to integrate Islamic finance services into the country’s financial reporting framework.
The Council stated that the plan would promote the adoption of standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).
The Executive Secretary/Chief Executive Officer of the FRCN, Dr Rabiu Olowo, who spoke on the proposed measure in his address at the seventh Africa Islamic Finance Conference held in Lagos, explained that the initiative aligned with the FRC’s statutory mandate to set, monitor, and enforce financial reporting standards in Nigeria.
He maintained that the increasing expansion of Islamic Finance Services in the country, including in Islamic banking, Sukuk issuances, Takaful insurance, and non-interest capital market products, required consistent and globally comparable financial reporting.
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According to him, Islamic finance has become a dynamic contributor to financial inclusion, infrastructure financing, and ethical investment alternatives, thereby necessitating the need for regulators to ensure that financial reporting for Islamic Finance Services is consistent, reliable, and globally comparable.
The FRC’s boss further stressed that the adoption of AAOIFI standards would complement existing IFRS practices while providing a dedicated framework for the unique contracts and financial instruments used in Islamic finance.
He clarified: “Nigeria’s financial system is evolving, and our regulatory framework must evolve with it. The inclusion of AAOIFI standards into our national framework is not just a regulatory necessity; it is a strategic imperative for building trust, enhancing transparency, and ensuring that Islamic finance continues to contribute meaningfully to economic growth and financial inclusion.”
Delivering his keynote address at the forum, the Vice President, Sen. Kashim Shettima, who was represented by the Special Adviser to the President on Economic Affairs, Dr Tope Fasua, noted that Islamic finance has emerged as a powerful option for funding of projects and programmes because the system’s framework is rooted in ethics, fairness and shared prosperity.
The Emir of Kano and former Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi II, in his speech expressed his excitement at the Islamic Finance Services growth in the country in view of the positive implications for the nation’s growth.
The Royal Father said: “We are beginning to see geometric growth in the number of banks that have been licensed and the number that have applied for licences. Islamic financing, at its core, invests in real assets like roads, power plants, water and digital networks. In Nigeria, for instance, constant access to electricity will easily create a $1tn economy.
“Islamic financing fits perfectly with infrastructure finance more than any other system because it is built on truth, where every financing is tied to a real, tangible asset that creates jobs and long-term value,” Sanusi II added.
It would be recalled that the National Assembly recently approved a request by President Bola Tinubu for the issuance of a $500 million Sovereign Sukuk bond in the international capital market to support its ongoing efforts to expand the implementation of capital projects, particularly road infrastructure networks across the country.
