The Federal Government, on Wednesday, announced plans to integrate Islamic finance accounting and auditing standards into Nigeria’s financial reporting system, a move aimed at boosting transparency, expanding financial inclusion, and positioning the country as a hub for non-interest finance in Africa.
The initiative was unveiled by the Financial Reporting Council of Nigeria (FRCN) during a stakeholders’ engagement in Abuja.
The standards, developed by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), a Bahrain-based body established in 1991, are widely recognised across countries with strong Islamic finance markets, including Saudi Arabia, Pakistan, Sudan, Indonesia, and parts of the Gulf Cooperation Council.
AAOIFI standards are tailored to the unique nature of non-interest financial transactions such as profit-and-loss sharing, sukuk (Islamic bonds), takaful (Islamic insurance), and other Shari’ah-compliant products that conventional reporting frameworks often fail to capture.
Currently, Islamic finance institutions in Nigeria rely on conventional reporting systems, making adjustments to reflect Shari’ah-compliant transactions. The planned integration is expected to close these gaps, strengthen credibility, and align Nigeria’s non-interest finance sector with global best practices while maintaining local regulatory requirements.
By adopting these standards, Nigeria hopes to attract investment, deepen trust in its financial system, and accelerate the growth of Islamic finance, a sector increasingly seen as vital for diversifying the economy and promoting inclusive development.
