•IVSC chief executive hails Nigeria as leading practice, declares efforts will quicken economic expansion
James Emejo in Abuja
The Executive Secretary/Chief Executive, Financial Reporting Council (FRC) of Nigeria, Dr. Rabiu Olowo, has said a credible valuation system remains key to achieving the present administration’s ambition for $1 trillion- economy by 2026.
Olowo stated that evidence had shown a firm connection between valuation and global competitiveness in business, helping to attract investors as well as improving credible financial reports.
Speaking when he received the Chief Executive, International Valuations Standards Council (IVSC), Mr. Nicholas Talbot, who paid him a courtesy call in Abuja, the FRC boss described the visit as a significant milestone for the council which is responsible for entrenching financial reporting credibility and corporate governance principles towards promoting investor confidence in the Nigerian economy.
He said valuation standards remained at the core of FRC credible financial reporting, having recently established a directorate of valuation standards in the council.
Olowo, said the physical meeting with the global apex valuation body “gives us hope in terms of the support, benefits and aligning ourselves with the global baseline of our valuations to be done or what should be the conducts, ethics and the techniques, even for valuation professionals, ensuring that what they do contributes to credible financial reporting”.
He stressed that valuation remained at the core of the council’s mandate, adding that the “work that valuation professionals do is absolutely significant to the economy”.
The FRC chief executive said, “Whether it’s valuation of assets, receivables, or anything of its kind, you find that it’s key to every financial reporting principle and also the governance process.
“So, at the end of the day, once investors have confidence that the business that we do here and how we value our balance sheet – this will promote that confidence and at the end of the day, it’s going to have a catalytic effect on the economy. And our hopes of achieving the $1-trillion economy is only a matter of time.”
According to him, “The work that the FRC do is quite a lot; we are the apex regulatory body for accounting, auditing, valuation, actuarial, and sustainability standards. And for us, all these standards are not cosmetic.
“We want to make sure that the work that we do here and the businesses that run in this country – all align with this global baseline so that when you are comparing the business in Nigeria with the business in the Netherlands or America, we are speaking the same language and that investors from any part of the world can have the ability to compare and have confidence in our reporting style.
“And we are very excited that we have good relationships with all the standards setting bodies across the world including the IVSC.”
In his remarks Talbot, also corroborated the position of the FRC boss on the relevance of effective valuation principle to achieving the government’s ambitious economic expansion, commending the Nigerian regulator as a “leading practice”.
He said strengthening the country’s valuation standards will boost investor confidence and quicken the proposed expansion of the economy
He told THISDAY, “What investors look for whether they’re domestic investors or international investors is confidence and key to confidence is having a stable financial system but also an approach where you understand it from an external investor point of view.
“Imagine a world where there were 195 different approaches to valuation, it would make it very difficult for investors to decide where to invest.
“So, the fact that Nigeria uses international valuation standards and the regulators are looking at strengthening that approach in terms of their oversight is only going to give more confidence to inward investors which will help move you towards the $1 trillion dream faster.”
