The Financial Reporting Council of Nigeria (FRC) has revealed that plans are underway to integrate global Islamic finance standards into the Nigerian Financial Reporting Framework (NFRF).
Executive Secretary of the FRC, Dr. Rabiu Olowo, made the disclosure in Abuja on Wednesday noting that the initiative is aimed at strengthening regulatory clarity and investor protection, while positioning Nigeria as a leading hub for Islamic finance in Africa.
He added that the stakeholders’ engagement follows FRC’s announcement last year to adopt the standards of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) for Islamic and non-interest financial institutions operating in the country.
He explained that Islamic finance institutions operate on principles that differ fundamentally from conventional financial systems, particularly in areas such as interest prohibition, risk-sharing, asset-backed financing and ethical investment.
“These differences make it important for us to coordinate closely with stakeholders to effectively integrate the standards and innovations of Islamic finance institutions,” Olowo said, adding that the framework would ensure financial reports faithfully reflect the substance of non-interest transactions, including governance and disclosure requirements.
According to him, “Adopting the AAOIFI standards will enhance transparency, accountability, comparability and consistency in financial reporting across Nigeria’s non-interest finance sector, while strengthening market discipline and boosting investor confidence.”
Olowo also noted the growing global acceptance of Islamic finance beyond traditional markets, citing examples such as the issuance of Sukuk and other non-interest instruments in countries like the United Kingdom.
He clarified that the adoption of the standards is not intended to disrupt existing financial operations, but rather to improve clarity, credibility and regulatory certainty for institutions offering non-interest financial products.
Dr. Basheer Oshodi from the Non Interest Finance Institutions of Nigeria explained that the Initiative is targeted at building Islamic finance consciously and setting up guidelines, adding that “More importantly we won’t disrupt the financial reporting framework, but we will enhance it and give it more potency so that by Q1 this year we should start implementing.”
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