CBN Governor, Sanusi Lamido Sanusi
Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, has said that the drive by the country to converge their financial reporting standards with the International Financial Reporting Standard (IFRS) will help propel foreign direct investments (FDI) in Nigerian banks and other quoted companies in the country.
Sanusi said this while delivering a keynote address at the N2 billion fund raising dinner, for the establishment of the IFRS academy organised by the Nigerian Accounting Standards Board (NASB) in Lagos.
He stated that the ongoing reforms in the financial sector cover the strengthening of regulation and supervision through enhanced disclosures by banks and other financial institutions.
“The ultimate aim is to have in place a full disclosure regime that will put the nation’s banking industry at par with global best practice. We have, in this respect, articulated and issued full disclosure guidelines to the banks for compliance. The full disclosure measures are primarily meant to further entrench sound corporate governance in the financial system. Our intention here is to ensure that all stakeholders have the requisite information to evaluate the true and fair positions of the banks in line with global best practice,” he added.
The banking watchdog also argued that the convergence to the IFRS will also lead to increase in private equity investments, which according to him, could lead to infrastructural growth as well as increase in the pool of investible funds for companies.
Sanusi insisted that the achievement of sustainable economic growth in any economy was among other factors, dependent on a sound and reliable financial system in which there is market confidence, characterised by high quality and transparent financial reporting based on a robust set of internationally accepted standards, good governance principles and regulatory structures.
The CBN Governor said: “Many countries have recently appreciated the need to ensure that their national financial reporting standards converge with the IFRS in order to reap these indisputable benefits. The IFRS provides a framework for publicly-quoted companies in the preparation and disclosure of their financial statements using a single set of high quality, global accounting standards that require transparent and comparable information in general purpose financial statements.
“The use of a single set of high quality globally-accepted standards increases comparability of financial information among companies and fosters more effective and efficient allocation of capital on a global basis.”