By Elizabeth Adegbesan
The Financial Reporting Council of Nigeria (FRC) has announced plans to formally integrate Islamic Finance Services into the country’s financial reporting framework by adopting standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
The Executive Secretary/CEO of the FRC, Dr. Rabiu Olowo, disclosed this in Lagos during his address at the 7th Africa Islamic Finance Conference.
According to Olowo, the initiative aligns with 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.
Dr. 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 emphasized 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.”
In his address, Vice President Kashim Shettima, represented by the Special Adviser to the President on Economic Affairs, Dr. Tope Fasua, noted: “Islamic finance has emerged as a powerful ally because the system framework is rooted in ethics, fairness and shared prosperity.”
Also speaking at the conference, His Royal Highness Muhammadu Sanusi II, 14th Emir of Kano and former Governor of the Central Bank of Nigeria, expressed pleasure at the industry’s growth, noting: “We are beginning to see geometric growth in the number of banks that have been licenced and the number that have applied for licences.”
He further stated: “Islamic financing in its core invests in real assets like roads, power plants, water and digital networks. In Nigeria for instance, if we have constant access to electricity it will easily give a $1 trillion economy.
He concluded: “Islamic financing fits perfectly to infrastructure finance than any other institution because it is built on truth, where every financing is tied to a real tangible asset that creates jobs and long-time value.”
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