Nigeria’s government and tax authorities are taking a tougher line on compliance than ever before, according to Magnus Nmonwu, Regional Director for Sage West Africa.

“Nigeria is becoming an increasingly important player on the global economic stage, and one consequence of that is we are seeing a bigger focus on compliance,” he said.

Government understands that a stable regulatory compliance framework is essential to attracting business investment and growing the economy, and there is also a concerted focus on growing the tax base.

“The consequence for enterprises is that they need to pay more attention than ever to getting their reporting standards, governance, and risk management up to international requirements. This is one factor behind the rapid growth in demand for Enterprise Resource Planning (ERP) solutions in Nigeria, across all sectors of business,” said Nmonwu.

One of the most important recent developments is the adoption of International Financial Reporting Standards (IFRS) in Nigeria.

IFRS is a set of accounting standards that guide recognition, measurement and disclosure of business transactions in the financial statements.

Nmonwu said that IFRS is important for Nigeria because it makes global comparison of financial statements for companies easier, and ensures transparency, reliable disclosure and a better quality of financial reporting, all of which give investors more confidence in the companies in which they are planning to invest.

“We’re seeing many international companies looking to invest in Nigeria, and they want a clear view of the financial health of the companies they are evaluating as possible partners, customers or investors,” Nmonwu said.

“They want to see financials reported using global standards. IFRS has already done a great deal to improve investor confidence in Nigeria,” he added.

Nmonwu said that Nigerian enterprises are investing in ERP solutions to cater for a newly demanding regulatory environment.

“Sage, for example, offers a range of compliant software packages that help businesses to produce the reports that IFRS requires from them,” he said.

“Our software is up to date with the latest relevant local laws and regulations in Nigeria to help businesses become and remain compliant,” he added.