Forex Brokers in Nigeria
Forex trading in Nigeria has gained significant popularity in recent years. It was reported that the volume of dollars traded (turnover) in the Nigerian forex market exponentially rose by 63.8 percent to $2.13 billion in 2022. Here are some brokers to consider if you're about to trade in Nigeria.
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If you are interested to try one of the brokers in the list above, make sure to try the forex demo account so you could experience trading firsthand with virtual money. You don't even have to deposit any funds since the demo account is 100% free. It is also available in most brokers.
Is Forex Trading Legal in Nigeria?
Yes, forex trading is legal in Nigeria, especially for individual traders who trade with their own funds. The Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) oversee and regulate forex trading activities in the country. The CBN is responsible for monetary policy and the overall financial system, while the SEC regulates the capital markets.
In the past, the Nigerian government and regulatory bodies have implemented certain restrictions on forex trading, such as limits on the amount of foreign currency that can be purchased or transferred. However, Nigerian traders are now free to trade whatever amount they have as capital and they are allowed to choose international forex brokers to facilitate their trades.
Is Forex Trading Taxed in Nigeria?
Yes, it is. Earnings derived from forex trading are categorized as capital gains, requiring Nigerian residents to pay a capital gains tax equivalent to 10% of the gross amount. This applies irrespective of whether they engage with domestic or international forex brokers. While brokers don't automatically deduct gains, individuals must declare them within their tax returns as part of their taxable income.
What are Forex Trading Regulations in Nigeria?
Nigeria maintains a light regulatory approach toward forex trading, largely due to the relatively recent emergence of forex trading within Nigeria. Even the two regulatory bodies there, CBN and SEC, are relatively compliant in regulating the forex market. They don't go into details about how forex brokers should offer their leverage or market their services.
Consequently, forex traders in Nigeria are free to choose whatever leverage and bonus promotions they want from a forex broker. There are also no restrictions on strategies so traders could try any method to profit from the forex market; even hedging and arbitrage which are usually restricted or banned altogether in other jurisdictions.
These flexible conditions attract a lot of brokers to offer their services in Nigeria. As such, many brokerages in the country are beginner-friendly.
How to Choose the Best Broker in Nigeria?
Forex trading in Nigeria is overseen by CBN and SEC, but the two agencies don't issue official licenses nor ID references for forex brokers. Also, there hasn't been any official directory to check on Nigerian-regulated brokers. Since the country opens its market freely to any international forex brokers, Nigerian traders could selectively choose well-regulated brokers that accept them and offer the best trading conditions.
It would be even better if the brokers were looking to expand their reach in the country, as there usually are certain services provided for Nigerian traders. Of course, this does not rule out the importance of choosing a broker based on safety and trading convenience.
To round out the explanation above, here are some key points to consider when choosing the best broker in Nigeria:
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For safety purposes:
- Make sure the broker is at least regulated in one internationally known jurisdiction (Cyprus, United Kingdom, Vanuatu, Seychelles, Australia, and so on.)
- The broker has been operating for more than 5 years.
- Segregated account is provided.
- Negative balance protection and compensation schemes are not obligatory, but it would be very much preferred to ensure your fund's safety.
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For trading purposes:
- Make sure the broker has affordable minimum deposit, spreads, commissions, and other fees related to your trading activity.
- Check if the trading specifications could support your trading plan. This could include maximum leverage, minimum lot size, stop out and margin call level, as well as allowing all strategies.
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For your convenience as a Nigerian trader (added value):
- Accepts Nigerian Naira as an account currency.
- Local deposits and withdrawals are provided.
- Has a physical presence in Nigeria.
- Has responsive customer service for Nigerian traders.
- Offering specified bonus and promotions for Nigerian traders.
Additional FAQ
What criteria should a real broker possess in Nigeria?
Generally, there are five major factors to consider when choosing a broker and they are:
- Level of regulation: You need to know if the broker is subject to the regulations of the Central Bank of Nigeria and if they operate accordingly. A lack of regulation should be a red flag and set off alarm bells in your mind.
- Trading platform: How does the trading platform look? Is there a registration number on the website that can be verified? Is a demo account available where you can test strategies and other account features?
- Currency pairs being offered: What kind of currency pairs does the broker have on offer? Is it just the minor pairs or exotic pairs that have low liquidity? Are major pairs that have high liquidity and are more profitable available?
- Account features: how are charges and commissions deducted and what are the percentages? What kind of leverage and margin accounts are offered? And what are the terms of deposit and withdrawal?
- Customer service: Is the customer service reliable? Can they provide succinct answers to your inquiries?
Continue Reading at Identifying Fake Forex Brokers in Nigeria
How's the condition of forex trading in Nigeria?
As of today, most Nigerians prefer to trade forex with foreign brokers who they deem to be more trustworthy. Undeniably, this phenomenon arises from the lack of forex regulation in the country. Trustworthiness aside, traders must be prepared to take all the risks should things turn ugly.
Forex traders in Nigeria also have to endure other disadvantages caused by the lack of regulation. For example, some Nigerian banks may decline to fund deposits or withdrawals from trading platforms.
Continue Reading at Is Forex Trading Legal in Africa?
Who regulates forex broker in Nigeria?
The foreign exchange market is monitored by the Central Bank of Nigeria. But unfortunately, there is no official agency that regulates online brokerages for Nigerian traders. This results in the surge of international brokers offering their services in the Nigerian market. In this kind of situation, any broker with international licenses would pass to be considered a credible entity for traders in the country.
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Is forex trading in Nigeria legal?
The forex market in Nigeria is not illegal, although it is still not heavily regulated. This is perhaps because it is still relatively new to the country.
To engage in trading activities, brokers only need to meet certain criteria set by Nigeria's apex bank, the Central Bank of Nigeria (CBN). In fact, many local brokers can register themselves as your usual business.
Continue Reading at Is Forex Trading Legal in Africa?
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