Nigeria’s integration with global economy increase need for regulatory compliance

A growing focus on promoting sound corporate gover- nance and enforcing regulatory compliance from the Nigerian government, paired with growing foreign investor interest in the country, is driving interest in enterprise business applica- tions in Nigeria.

That’s according to Mag- nus Nmonwu, Regional Di- rector for Sage West Africa, who says that Nigeria’s gov- ernment and tax authorities are taking a tougher line on compliance than ever before.

At the same time, Nige- rian companies are finding themselves under pressure to improve financial reporting and corporate governance to address the demands of mul- tinational business partners, investors, and customers.

“Nigeria is becoming an increasingly important player on the global economic stage, and one consequence of that is we are seeing a bigger focus on compliance. Gov- ernment understands that a stable regulatory compliance framework is essential to at- tracting business investment and growing the economy, and there is also a concerted focus on growing the tax base,’’ Nmonwu said.

The consequence for en- terprises is that they need to pay more attention than ever to getting their report-
Nigeria’s integration with global economy increase need for regulatory compliance ing standards, governance, and risk management up to international requirements.

This is one factor behind the rapid growth in demand for Enterprise Resource Plan- ning (ERP) solutions in Nigeria, across all sectors of business. One of the most impor- tant recent developments is the adoption of International Financial Reporting Stan- dards (IFRS) in Nigeria.

IFRS is a set of accounting standards that guide recog- nition, measurement and disclosure of business trans- actions in the financial state- ments.

The Financial Report- ing Council Act of 2011 gives effect to the adoption of these Standards by all Nigerian entities by December 2014.

IFRS is important for Ni- geria because it makes glob- al comparison of financial statements for companies easier, says Nmonwu.

It ensures transparency, reliable disclosure and a bet- ter quality of financial report- ing, all of which give inves- tors more confidence in the companies in which they are planning to invest.

“We’re seeing many in- ternational companies look- ing to invest in Nigeria, and they want a clear view of the financial health of the com- panies they are evaluating as possible partners, customers or investors,” Nmonwu says.