Reforms and opportunities in Nigeria: MGI's Haruna Yahaya joins the conversation
"The Nigerian government is fighting hard to get the economy under control while churning out regulation to bring the country in line with global standards," says the IAB. Despite increased regulation and infrastructure investments, including the booming oil and gas sectors, local accountancy firms face difficulties in a challenging business environment.
In its latest edition, Haruna Yahaya from MGI Worldwide member firm Haruna Yahaya & Co., joins the IAB (International Accounting Bulletin) to discuss the current challenges facing the accounting industry in Nigeria.
Liquidity and inflation
The Central Bank of Nigeria (CBN) has implemented measures such as adjusting the Cash Reserve Ratio to 45%, setting the liquidity ratio at 30%, and pegging the Monetary Policy Rate (MPR) at 24.75%. Despite these efforts, liquidity remains critically low with poverty levels projected to increase, exacerbating low consumer spending and purchasing power.
SMEs are vital for tackling poverty and unemployment, but high inflation (33.2%) and devaluation of the Naira have made business conditions harsh. The cost of doing business in Nigeria has increased significantly, leading to a decline in purchasing power and struggles for SMEs. Government measures, like a reduced tax rate for small companies and easier access to credit through loan apps, have provided some relief, offering a fast and convenient way to access financial services.
E-commerce surges
On a more positive note, an increase in demand for digital commerce is creating new opportunities for accountants, particularly in services like cloud accounting. Haruna says:
“With the ongoing shift towards online shopping and digital commerce accelerated by the pandemic, there has been a significant surge in demand for e-commerce platforms, digital retail solutions, and related services. Businesses across industries have invested in developing or enhancing their online presence to reach customers and drive sales through digital channels. Accountants are not left behind, as services such as cloud accounting for online services are on the rise.”
Regulatory oversight increases
The Nigerian accounting sector is evolving with increased regulatory oversight. The Financial Reporting Council of Nigeria (FRC), in partnership with UNCTAD, aims to align Nigeria's accounting framework with international standards. The Institute of Chartered Accountants of Nigeria (ICAN) has also intensified its review of accountancy practices.
To read the full article in the May edition of the IAB, members can click here (login to the MGI Worldwide member portal will be required).
For more information about our contributing member firm Haruna Yahaya & Co. visit the firm profile page or website.
MGI Worldwide is a top 20 ranked global accounting network and association with over 8,000 professionals, accountants and tax experts in some 400 locations in almost 100 countries around the world.