The Financial Reporting Council of Nigeria has announced plans to formally integrate Islamic Finance Services into the country’s financial reporting framework.
This was disclosed in a statement made available to The PUNCH on Monday. This move will mean the adoption of standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions.
According to the statement, the Executive Secretary/Chief Executive Officer of the FRC, Dr Rabiu Olowo, disclosed this in Lagos during his address at the seventh Africa Islamic Finance Conference.
Olowo said the initiative aligns with the FRC’s statutory responsibility to set, monitor, and enforce financial reporting standards in Nigeria.
He highlighted that the rapid expansion of Islamic Finance Services in Nigeria, including growth in Islamic banking, Sukuk issuances, Takaful insurance, and non-interest capital market products, necessitates consistent and globally comparable financial reporting.
“This sector has become a dynamic contributor to financial inclusion, infrastructure financing, and ethical investment alternatives.
However, this growth brings with it the obligation for regulators to ensure that financial reporting for Islamic Finance Services is consistent, reliable, and globally comparable,” he stated.
Olowo further explained 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 emphasised that “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.”
Vice President Kashim Shettima, who was represented by the Special Adviser to the President on Economic Affairs, Dr Tope Fasua, in his address, observed that “Islamic finance has emerged as a powerful ally because the system’s framework is rooted in ethics, fairness and shared prosperity.”
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Also speaking at the conference, the 14th Emir of Kano and former Governor of the Central Bank of Nigeria, Muhammadu Sanusi II, expressed pleasure at the industry’s growth.
“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 said.
The PUNCH reports that the National Assembly recently approved a request by President Bola Tinubu for the issuance of a $500m Sovereign Sukuk in the international capital market.