The Financial Reporting Council of Nigeria (FRC) has announced plans to integrate Islamic Finance Services into the country’s financial reporting framework by adopting the globally recognized standards of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
FRC Executive Secretary and CEO, Dr. Rabiu Olowo, revealed the initiative during his address at the 7th Africa Islamic Finance Conference in Lagos. He stated that the move aims to ensure consistent, reliable, and globally comparable reporting for the rapidly growing Islamic finance sector, which includes Islamic banking, Sukuk issuances, Takaful insurance, and non-interest capital market instruments.
“This sector has become a dynamic contributor to financial inclusion, infrastructure financing, and ethical investment alternatives. Its growth obliges regulators to ensure financial reporting is consistent, reliable, and globally comparable,” Olowo said.
The FRC chief emphasized that incorporating AAOIFI standards will complement existing IFRS practices while providing a framework tailored for the unique contracts and instruments used in Islamic finance.
“Nigeria’s financial system is evolving, and our regulatory framework must evolve with it. The inclusion of AAOIFI standards is a strategic imperative for building trust, enhancing transparency, and ensuring Islamic Finance contributes meaningfully to economic growth,” Olowo added.
Representing Vice President Kashim Shettima, Dr. Tope Fasua, Special Adviser to the President on Economic Affairs, highlighted the ethical foundations of Islamic finance, stating it promotes fairness, shared prosperity, and responsible investment.
His Royal Highness Muhammadu Sanusi II, 14th Emir of Kano and former Central Bank Governor, praised the sector’s expansion, noting a surge in licensed Islamic banks and applicants. He emphasized the sector’s focus on real assets such as infrastructure, power plants, and digital networks, projecting that improved energy access could significantly bolster Nigeria’s economy.
“Islamic financing invests in real assets like roads, power plants, water, and digital networks. In Nigeria, consistent electricity access could help achieve a $1 trillion economy,” Sanusi said.
The FRC’s adoption of AAOIFI standards marks a milestone in Nigeria’s financial regulation, aligning the country with international practices and enhancing investor confidence in the Islamic finance sector.
