The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has lauded the significant growth in Nigeria’s banking sector, attributing it to the adoption of the International Financial Reporting Standards (IFRS). Speaking at the Regulatory Roundtable on the Implementation of ISSB’s Sustainability Standards in Abuja, organized by the Financial Reporting Council (FRC) of Nigeria, Cardoso highlighted how IFRS has enhanced transparency, thereby attracting foreign investments and fostering expansion within the financial sector.
Cardoso pointed out that the adoption of IFRS has allowed Nigerian banks to present globally competitive financial statements, which has significantly boosted investor confidence. This has led to substantial foreign investments and credit facilities flowing into the country, contributing to the growth of Nigeria’s banking and financial systems. The impact of IFRS is evident in the expansion of Nigerian banks, with over 55 subsidiaries, three branches, and four representative offices now operating across 30 countries.
The IFRS, developed by the IFRS Foundation and the International Accounting Standards Board (IASB), provide a standardized framework for financial reporting that enhances comparability and transparency across international borders. These standards are particularly important for companies with publicly listed shares or securities.
During the event, Cardoso, represented by Dr. Musa Jimoh, CBN Deputy Director of Payments System Policy and Oversight Function, expressed optimism about the forthcoming implementation of IFRS S1 and IFRS S2 in Nigeria. IFRS S1 focuses on sustainability-related financial disclosures, while IFRS S2 sets specific requirements for climate-related disclosures, helping companies address and disclose climate-related risks and opportunities.
Cardoso emphasized the importance of transparency and regulatory frameworks in building confidence within the financial system. He noted that the CBN has been proactive in issuing guidelines for disclosure requirements, which include sustainable banking practices. These efforts, he said, have had a positive impact on how Nigerian banks operate both domestically and internationally.
The CBN governor also acknowledged the challenges associated with implementing the new IFRS standards, particularly the need for technical expertise, data, and resources to meet the rigorous requirements of climate-related disclosures. He urged regulators, including the FRC, to consider these challenges when setting an adoption roadmap for the sustainable financial standards.
In his remarks, Dr. Rabiu Olowo, Executive Secretary and Chief Executive of the FRC, highlighted Nigeria’s leadership role in Africa by adopting the ISSB standards. He noted that these standards provide a global baseline for sustainability reporting, promoting transparency, comparability, and accountability. Olowo called for industry-wide participation and a collective commitment to sustainability reporting, stressing that such efforts are crucial for building a resilient and sustainable future for Nigeria.
Olowo also mentioned that Nigeria has progressed through the Early Adoption Stage of the new standards, with notable companies like Access Bank, Fidelity Bank, Seplat Energy, and MTN demonstrating leadership in sustainability reporting. The country is now in the voluntary stage of adoption, which will continue until 2027, before mandatory compliance begins in 2028.
Through continued collaboration and monitoring of progress, Olowo believes that Nigeria can create a robust ecosystem that supports the adoption of sustainability reporting, ultimately contributing to the country’s long-term economic and environmental resilience.
