The Financial Reporting Council of Nigeria (FRC), in a recent statement dated April 30, 2025, declared that Nigeria’s economy does not meet the threshold for hyperinflation and, as such, IAS 29 – the international standard for financial reporting in hyperinflationary economies – should not be applied for the 2025 financial year. The assertion, signed by FRC’s Executive Secretary/CEO Dr. Rabiu Olowo, is at odds with the lived reality of millions of Nigerians who have been grappling with unprecedented economic hardship over the past two years.
While the FRC leans on technical indicators – including investor confidence in Naira-denominated assets, bond oversubscriptions, and rebased inflation metrics – it dangerously discounts the socio-economic pain saturating every layer of Nigerian society. These analytical arguments, however statistically sound, paint an incomplete picture of a crisis that is less about spreadsheet confidence and more about empty markets, shuttered businesses, and households in financial distress.
Hyperinflation by Experience, If Not Declaration
It is true that IAS 29 outlines five broad indicators to identify hyperinflation, including a cumulative inflation rate of 100% over three years. Even by the FRC’s own admission, Nigeria’s three-year cumulative inflation stands at 107.02%, exceeding the IAS 29 benchmark. Yet, the Council attempts to explain this away by referencing a “marginal” drop from 110.9% following the rebasing of economic data. This is akin to moving the goalpost after the game has been won.
Between 2023 and 2025, the average Nigerian has witnessed a consistent surge in food prices, housing costs, transportation fares, and healthcare expenses. The petrol subsidy removal in 2023 under the current administration triggered a wave of inflationary spikes. By late 2024, a bag of rice that once sold for N35,000 rose to over N80,000 in major markets. Transportation costs in Lagos, Abuja, and Enugu doubled within months, pushing many commuters to seek alternatives or drastically reduce travel.
Salaries in Naira, But Purchasing Power in Decline
The FRC insists that salaries are still paid in Naira, goods are priced in Naira, and therefore, Nigeria cannot be said to be in hyperinflation. But what is the use of a local currency when it can no longer sustain basic living? The true test of a currency’s viability is not its usage but its value. Today, a monthly salary of N100,000, which was once modest, can barely cover rent in major cities, let alone utilities and groceries.
What the FRC omits is the rise in alternative spending behavior: more Nigerians now prefer to store value in USD, buy land, or invest in foreign-based cryptocurrencies. The Council’s statement that citizens “continue to invest in Naira-denominated assets” ignores the parallel trend of dollarization, especially in the real estate, importation, and luxury goods markets, where prices are increasingly quoted in dollars.
Bond Oversubscription Doesn’t Mean Economic Stability
The FRC cites oversubscription to treasury bills and savings bonds as a sign of economic confidence. But this interpretation is overly simplistic. Institutional investors and banks often flood these instruments due to limited viable alternatives, regulatory mandates, or speculative behavior in uncertain markets. It is less about confidence in the economy and more about chasing yields amid instability.
Moreover, the average Nigerian is not participating in these investment channels. Informal traders, students, artisans, and civil servants—who make up the bulk of the population—are battling real issues: unstable income, job losses, food insecurity, and rising rent. These issues don’t show up on the FRC’s hyperinflation indicators, but they define Nigeria’s current economic landscape.
The Rebased Illusion
Rebasing the Consumer Price Index (CPI) and GDP figures might look impressive on paper, but it has done little to alleviate inflationary pressure on the streets. The FRC’s reliance on rebased data to downplay a three-year inflation rate over 100% is tone-deaf. It is not the technical reduction that matters, but the human cost.
A single mother in Kano who now pays N500 for a sachet of milk that was N180 in 2022 doesn’t care about economic rebasing. A fresh graduate in Enugu who cannot afford transportation to a job interview because fares have doubled in two years doesn’t see the 3.88% inflation decline as meaningful progress.
Conclusion: A Call for Economic Honesty
The FRC’s position attempts to preserve institutional and investor confidence, but it risks detaching public policy from public suffering. Nigeria may not be in textbook-defined hyperinflation, but in practical, economic, and emotional terms, it is experiencing one of its worst inflationary spells in decades.
Applying IAS 29 is not merely a technical adjustment – it is a recognition of reality. It is time policymakers, regulators, and reporting bodies reflect not just market statistics but market struggles. Financial statements must tell the full truth, especially when citizens are already paying the price.
Opinion by Nzubechukwu Eze.
