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.
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.
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.
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.
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:
- 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.
- 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.
- 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.