The Financial Reporting Council of Nigeria (FRC) has announced plans to integrate Islamic financial services into the country’s financial reporting framework through the adoption of standards developed by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
The Executive Secretary and Chief Executive Officer of the FRC, Rabiu Olowo, disclosed this on Monday, November 10, during his address at the 7th Africa Islamic Finance Conference held in Lagos. He explained that the initiative aligns with the FRC’s statutory mandate to establish, monitor, and enforce financial reporting standards in Nigeria.
According to Olowo, the rapid growth of Islamic finance—including non-interest banking, Sukuk bonds, Takaful insurance, and ethical investment products—has created the need for a unified and globally recognized reporting structure. He emphasized that the Islamic finance sector has become a key contributor to financial inclusion, infrastructure development, and ethical investment, but that its continued growth requires regulators to ensure consistency, reliability, and comparability in financial reporting.
Olowo further stated that adopting AAOIFI standards would complement the International Financial Reporting Standards (IFRS) currently in use, providing a framework specifically tailored to the unique contracts and instruments found in Islamic finance. He noted that Nigeria’s financial system is evolving, and that the regulatory framework must evolve alongside it. Integrating AAOIFI standards, he added, is not just a regulatory step but a strategic move aimed at building trust, enhancing transparency, and ensuring that Islamic finance continues to drive economic growth and inclusion.
In a goodwill message, Vice President Kashim Shettima, represented by Tope Fasua, Special Adviser to the President on Economic Affairs, commended Islamic finance for its ethical principles and focus on fairness and shared prosperity. He described Islamic finance as a strong partner in promoting inclusive and sustainable economic systems grounded in ethics and equity.
Also speaking at the event, His Royal Highness Muhammadu Sanusi II, the 14th Emir of Kano and former Governor of the Central Bank of Nigeria (CBN), expressed satisfaction with the rapid expansion of Islamic financial institutions in the country. He noted that the number of licensed Islamic banks, as well as applications for new licenses, has grown significantly in recent years.
Sanusi explained that Islamic finance is distinguished by its investment in real assets such as roads, power plants, water systems, and digital infrastructure, which contribute to job creation and long-term economic value. He added that the model is particularly well-suited for infrastructure development because it is asset-backed and transparent.
According to Sanusi, if Nigeria had consistent access to electricity, the country could easily become a $1 trillion economy. He concluded by emphasizing that Islamic finance offers a sustainable model for funding critical infrastructure projects, as its asset-based structure promotes honesty, job creation, and lasting value for the economy.