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 made available to our correspondent 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.
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.
The FRC, led by Executive Secretary and Chief Executive Officer Rabiu Olowo, disclosed that while Nigeria’s three-year cumulative inflation rate, now at 107.02 per cent, meets the 100 per cent threshold, other critical indicators do not align with the characteristics of a hyperinflationary economy.
“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 stated.
