Federal Government has begun steps to integrate Islamic finance accounting and auditing standards into Nigeria’s financial reporting system to strengthen transparency, deepen financial inclusion, and position the country as a regional hub for non-interest finance.
The initiative was announced by the Financial Reporting Council of Nigeria (FRCN) at a stakeholders’ engagement on integrating Islamic finance standards into the Nigerian Financial Reporting Framework, held Wednesday at the Abuja Continental Hotel.
The proposed framework will adopt standards developed by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), a Bahrain-based global standard setter established in 1991. AAOIFI standards address the unique features of Shari’ah-compliant finance—such as profit-and-loss sharing, asset-backed financing, sukuk, and takaful—which are not fully covered by conventional reporting systems.
While countries including Bahrain, Saudi Arabia, Pakistan, Sudan, Indonesia, and parts of the GCC apply AAOIFI standards, others like Malaysia and the UK use them alongside international financial reporting standards. In Nigeria, Islamic finance institutions currently rely largely on conventional standards, often requiring adjustments to reflect Shari’ah-compliant transactions.
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The planned integration is expected to close reporting gaps, enhance credibility, and align Nigeria’s non-interest finance sector with global best practices while maintaining local regulatory requirements.
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