Business
JUST IN: FG Orders Companies to begin Sustainability Reporting 2024
Companies involved in the climate change fight have been asked to begin disclosure of financial accounts starting from January 1, 2024.
According to the Federal Government, this initiative which is in line with the International Sustainability Standards Board is to promote transparency and accountability of financial information to investors.
The Executive Secretary of the Financial Reporting Council of Nigeria, Shuaibu Ahmed, made this known on Wednesday during the inauguration of the Adoption Readiness Working Group in Abuja.
The early adoption of the policy was part of recommendations made during the COP 27 Climate Change Conference held last year in Egypt.
Ahmed noted that the latest development followed an explosion in the burden of non-financial reporting requirements on companies.
Speaking during his address, Ahmed said, “I am very delighted to welcome you all to this programme today which could not have come at a more auspicious time other than now when the primary users of general purpose financial statements (i.e. investors, lenders, creditors and other stakeholders) globally are calling for more transparent, comparable and verifiable sustainability-related financial information to help them assess an entity’s enterprise value.
“We are now in a world where reliable sustainability information is becoming as important as financial information. The focus on Financial Statements is a viable way to an integrated approach to financial information, Environmental, social and governance or Sustainability information and broader non-financial information.”
He added that with the issuance of two sustainability standards; General Requirements for Disclosure of Sustainability-related Financial Information and Climate-Related Disclosures, investors will be knowledgeable about risks and opportunities facing an entity to inform their decisions on providing resources.
Earlier in her address, the Permanent Secretary, Ministry of Trade and Investment, Evelyn Ngige, commended the forward-thinking ambition of the agency and urged to ensure adequate implementation of the policy when passed.
The perm sec represented by the Director, Policy, Planning, Research and Statistics, Alhaji Baba Gana Alkali, said, “There is a global understanding that the implementation of IFRS S1 & S2 will enhance corporate reporting and unlock capital, especially to emerging markets like Nigeria. Therefore, I implore all of you to work tirelessly to ensure that these standards are appropriately implemented.”
Business
Obi advocates policy support for manufacturers
Obi made the call following his attendance at the inauguration ceremony of the newly installed President of the Manufacturers Association of Nigeria (MAN), Dr. Eric Okoye, in Lagos, where he interacted with current and former leadership of the association.
Nigeria Democratic Congress (NDC) presidential candidate Peter Obi has called for stronger collaboration between government and private sector stakeholders to unlock the potential of Nigeria’s manufacturing industry.
He stressed that the country must transition from a consumption-oriented economy to a productive powerhouse.
Obi made the call following his attendance at the inauguration ceremony of the newly installed President of the Manufacturers Association of Nigeria (MAN), Dr. Eric Okoye, in Lagos, where he interacted with current and former leadership of the association.
According to him, targeted policies and a more favourable business environment are vital to increasing the manufacturing sector’s contribution to the nation’s gross domestic product (GDP).
“With the right government policies, an enabling business environment, and stronger collaboration between the public and private sectors, Nigeria can significantly increase the contribution of manufacturing to our GDP,” Obi stated.
Highlighting current economic figures, Obi noted that manufacturing accounts for approximately 7.5 per cent of Nigeria’s GDP, a figure he argued lags behind several other developing and emerging economies.
“Manufacturing currently contributes about 7.5 per cent of Nigeria’s GDP, compared with about 14 per cent in Egypt, 15 per cent in Morocco, 25 per cent in Vietnam, 19 per cent in Indonesia, and 20 per cent in Bangladesh,” he observed.
Business
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Business
African Union launch continent’s first credit rating agency
African leaders have long accused Western ratings agencies including S&P, Moody’s and Fitch of failing to fairly assess the risk of lending to African countries and of moving too quickly to downgrade them during crises such as conflicts and pandemics.
The African Union on Wednesday launched the continent’s first credit rating agency—Africa Credit Rating Agency (AfCRA).
AfCRA, launched in Port Louis, the capital of Mauritius, where it will be based. is seeking to provide an alternative to the “big three” global ratings agencies as debt burdens weigh on many African economies.
“AfCRA complements existing global credit rating agencies by offering a perspective rooted in African data, expertise and realities,” the AU said in a statement.
African leaders have long accused Western ratings agencies including S&P, Moody’s and Fitch of failing to fairly assess the risk of lending to African countries and of moving too quickly to downgrade them during crises such as conflicts and pandemics.
The agencies reject that criticism, saying they apply the same methodologies globally.
Rating experts said the success of the initiative will hinge on the perceived credibility of the new agency, especially in times of crisis.
“A new rating agency begins with a promise while investors ultimately require a track record,” said Dennis Shen, a lecturer in finance at the International School of Management in Berlin and former sovereign analyst at Scope Ratings.
“The hardest test, however, will come when markets are under stress, because a rating agency’s credibility is tested most severely when its conclusions are uncomfortable rather than when it is highly convenient.”
AfCRA may provide a counterweight to established rating agencies, but it must meet global standards, former Nigerian Vice President Yemi Osinbajo said.”It can’t just be a chauvinistic or nationalistic agency,” he said.
AfCRA, which will rate sovereign borrowers, financial institutions and private companies, will operate independently and be funded through shareholder capital and its operations, the AU said.
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