The Financial Reporting Council (FRC) has stated that Nigeria does not qualify as a hyperinflationary economy under current standards. In a statement on Wednesday, FRC CEO Rabiu Olowo confirmed that Nigerian companies will not apply the International Accounting Standard (IAS) 29 for their 2024 financial reports.
IAS 29 provides guidelines for financial reporting in hyperinflationary economies, with key indicators such as a reliance on non-monetary assets, pricing in stable currencies, and a cumulative three-year inflation rate nearing or exceeding 100%. Olowo explained that after assessing Nigeria’s economy against these indicators, it was concluded that the country does not meet most of the criteria for hyperinflation.
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However, Nigeria does meet the indicator of a cumulative inflation rate approaching 100% over the past three years. Olowo also highlighted that the operationalisation of major projects like the Dangote refinery, along with the Port Harcourt and Warri refineries, could help reduce inflation and improve the country’s economic outlook.
The FRC further noted that factors such as increased crude oil production, agricultural initiatives, and structural reforms are expected to support Nigeria’s positive economic trajectory. Olowo added that the agency will continue to monitor developments and update its position for the 2025 financial year if necessary.
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