Dear Okaro,In my country, the adoption of the IFRS seemed not to have the same reason that you are informing about Nigeria´s one. For Brazil, the adoption of IFRS had the aim to help international companies already in this country to disclosure balance sheets to Matrices. To turn easier to international companies to close results yearly, and so on... a colateral effect could be to have accelerated inflow of FDI - Foreign Direct Investment. The question I replicate to you is: Was the Nigeria´s purpose to accelerate the inflow of FDI? Are you sure about that?
I study BRICS (Brazil, Russia, India, China and South Africa) and I believe that this work about Russia implementing IAS can give you some tips to understand what happened to Nigeria.
I believe that the effect has not been significant because of the multiplicity of laws and government agencies carrying out the same functions at the same time. Furthermore, even where the laws are in place, they have not been able to appeal effectively to the psychology of the foreign investors for lack of sincerity of purpose.
Glad the curiousity of the Nigerian accounting academics on this issue is once again reawkaened.
However, in my opinion, I think this unmistaken knowledge- "that the adoption of IFRS in Nigeria has not really improved the inflow of FDI into the country" should draw more closer research attention on why this happened and why has IFRS implementation in Nigeria failed to yield the desired result in 5 years. The following pointers could be of great help:
1. Was any goal oriented institutional framework(s) put in place to accelerate, achieve and sustain a balance in the federal government's IFRS adoption and FDI inflow ideology?
2. If there was any. say FRC of Nigeria or the equivalent, could it be said to have enjoyed true, sincere and influence-free enabling environment by the federal government in discharging its statutorily spelt out professional goals/ duties?
3. Who and who run/ran this/these organisations? Tested and integrity proven professionals with tied hands or the reverse?
4. Did the federal government really maintain commendable focus on its claimed pre IFRS adoption- FDI inflow goals that it could not in 5 years prove to Nigerians that the sudden adoption of IFRS in Nigeria does not in anyway have other hidden reasons of personal interest tied to it?
5. How has the issue of companies' questionable financial data disclosures been handled in Nigeria these 5 years since IFRS adoption in Nigeria? Were they duly invesigated and reprimanded to save the economy and boost foreign investors' confidence in our new accounting practice, at least with IFRS or were the institutions forced to overlook the ticking time bomb by the federal government?
6. Don't you think the deteriorating but systematic state of CORRUPTION in Nigeria has something to do with this, coupled with the state of insecurity in the North East and separatists activities in the South East/South South? How realistic could investmentvin a country where the system put in place to enforce accountability and transparency has been compromised be? I don't think any rational investor would want to risk seeing his/her hard earned investment degenerating into a court case in the future?
I think the environment and the system obtainable in that environment has a lot to do with the nature and quality of result attainable. Whatever happened to the quality of FDI inflow in Nigeria may not after all be a function of any form weaknesses on the side of the new International Accounting framework (IFRS).
There is no question that the perceived quality of governance in a country is directly related to the level of confidence investors might have toward that country. Although Nigeria does not rank as the most corrupt nation on the planet, it nevertheless holds a "lofty" position vis-a-vis other African countries. While anecdotal evidence offers a credible prediction, research has subsequently demonstrated that perceived corruption played a significant role in stemming the flow of FDI. As Nwoye emphasized in his summation above, the application of rigorous standards alone is not sufficient to counter the virulent effects of pervasive weaknesses in the system of governance. Unfortunately, because of Nigeria's influence in the region, the perversion of political acumen and arrogance has been (and continues to be) replicated across the West African landscape and beyond to the detriment of the African race. And that's just too bad!