The Financial Reporting Council of Nigeria has reaffirmed that the Nigerian economy does not meet the criteria for classification as hyperinflationary, despite recent macroeconomic data from the International Monetary Fund and the National Bureau of Statistics indicating high inflationary pressures.

In a statement on Thursday, the council noted that a comprehensive evaluation of Nigeria’s economic indicators aligned with the International Accounting Standard 29 on Financial Reporting in Hyperinflationary Economies shows that only one of the five conditions has been met.

According to the statement, IAS 29 outlines specific indicators to determine hyperinflation, including a preference for non-monetary assets, use of stable foreign currencies for transactions, inflation-adjusted pricing on credit sales, linkages of wages and prices to price indices, and a cumulative inflation rate of over 100 per cent across three years.

“For instance, Nigerians continue to transact and invest in naira-denominated assets. Treasury bills and FGN savings bonds have recorded oversubscriptions in trillions, reflecting sustained confidence in the local currency,” the Council said.

Additionally, the council emphasised that goods and services in Nigeria are still largely quoted and transacted in naira, while wages and interest rates are not indexed to any specific price index. It added that credit transactions in the country are not priced to account for future loss in purchasing power due to inflation.

“There is no evidence to support the premise that the price of credit transactions is adjusted for inflation… Business entities continue to offer credit terms based on contractual agreements, risk appetite, and customer profiles,” the council added.

The council concluded that IAS 29 should not be applied in the preparation of 2025 financial statements in Nigeria, despite inflation pressures and the recent rebasing of economic data by the National Bureau of Statistics.

GIK/APA