The Financial Reporting Council of Nigeria (FRC) has announced plans to formally incorporate Islamic Financial Services into the country’s financial reporting framework, marking a significant step toward aligning Nigeria’s accounting practices with global standards.
In a statement issued on Monday, the FRC said the move would involve the adoption of standards set by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).
The Council’s Executive Secretary and Chief Executive Officer, Dr. Rabiu Olowo, disclosed this during the seventh Africa Islamic Finance Conference held in Lagos. He explained that the integration aligns with the FRC’s mandate to develop, monitor, and enforce financial reporting standards that reflect Nigeria’s evolving financial landscape.
Olowo noted that Islamic finance in Nigeria has witnessed remarkable growth in recent years, with expanding activities in Islamic banking, Sukuk issuances, Takaful insurance, and non-interest capital market instruments. He said this progress underscores the need for uniform and transparent financial reporting standards that are consistent with international best practices.
“This sector has become a dynamic contributor to financial inclusion, infrastructure financing, and ethical investment alternatives. However, this growth also places a responsibility on regulators to ensure that financial reporting for Islamic Finance Services remains consistent, reliable, and globally comparable,” he said.
Olowo added that adopting the AAOIFI standards would complement existing International Financial Reporting Standards (IFRS) by providing a dedicated framework for the distinctive contracts and instruments used in Islamic finance.
“Nigeria’s financial system is evolving, and our regulatory framework must evolve with it,” he stated. “The inclusion of AAOIFI standards is not merely a regulatory exercise; it is a strategic move to build trust, enhance transparency, and ensure that Islamic finance continues to play a vital role in promoting economic growth and financial inclusion.”
Representing Vice President Kashim Shettima at the event, the Special Adviser to the President on Economic Affairs, Dr. Tope Fasua, described Islamic finance as “a powerful ally” for national development, citing its foundation in ethics, fairness, and shared prosperity.
Also speaking, the 14th Emir of Kano and former Governor of the Central Bank of Nigeria, Muhammadu Sanusi II, lauded the progress recorded in the sector, noting that Nigeria was witnessing a surge in the number of licensed Islamic banks and new applications.
“We are beginning to see geometric growth in the number of institutions entering the space. Islamic financing, by design, invests in real assets such as roads, power plants, and digital infrastructure. In Nigeria, for instance, uninterrupted access to electricity could create a trillion-dollar economy,” Sanusi said.
He added that Islamic finance was particularly suited for infrastructure development because it is asset-backed and promotes job creation and sustainable economic value.
The announcement comes as the National Assembly recently approved President Bola Tinubu’s request for the issuance of a $500 million sovereign Sukuk in the international capital market, further signalling Nigeria’s deepening engagement with Islamic finance instruments.
