A New Era for Fair Finance! FG Adopts Global Rules to Make Islamic Banking More Transparent and Trustworthy

Nigeria is taking a massive step toward becoming Africa’s “capital of ethical finance” as the Federal Government begins incorporating international Islamic accounting standards into the nation’s financial reporting system.

The move was officially launched by the Financial Reporting Council (FRC) during a high-level meeting in Abuja. The goal is simple: to give “interest-free” banking and investments a specialized set of rules that everyone from local farmers to international investors can trust.

For years, Nigeria has primarily used conventional accounting rules, but these don’t always fit the unique way Islamic finance works. Unlike traditional banking, Islamic finance focuses on things like profit-and-loss sharing and asset-backed deals. By adopting the AAOIFI standards which are the “gold standard” used in major markets like Saudi Arabia and Pakistan the government is ensuring that these transactions are now recorded with total transparency.

Speaking at the event, the CEO of the FRC, Dr. Rabiu Olowo, explained that this isn’t just about religion it’s about smart economics. “Our financial system is evolving,” he noted, “and our rules must evolve with it.” He argued that having a dedicated framework for products like Sukuk (government bonds used for roads and schools) and Takaful (ethical insurance) will make Nigeria far more attractive to global investors who want to put their money into fair, tangible assets.

This reform comes at a time when non-interest banking is booming across the country. By aligning with global standards, the government expects to see even more growth in this sector, helping more Nigerians gain access to loans and investment opportunities that don’t involve traditional interest rates.

With this new “rulebook” in place, Nigeria is positioning itself as a transparent, reliable, and leading destination for the world’s growing ethical and non-interest finance market.