Business
Nigeria’s Booming Forex Trading Industry: A Risky But Lucrative Venture For Traders
Forex trading has been on the rise in Africa, with Nigeria being the second-largest retail online forex market on the continent.
However, the absence of specific regulations makes traders vulnerable to scams and fraudulent activities. South Africa leads the way with a lesser but still significant number of 190,000 daily forex traders.
Despite the lack of regulations, the Nigerian forex industry has garnered a lot of interest from online traders, investors, and international brokerage firms.
According to Temitope Ijibadejo, the Nigeria Regional Manager of CM Trading, a licensed international brokerage and contract for difference (CFD) provider, the Nigerian forex industry is a “very buoyant one.”
He said the number of active Nigerian forex traders exceeds 300,000 with net deposits in billions of Naira annually.
In a 2021 report, it was estimated that there were roughly 300,000 retail forex traders in Nigeria, and there has been a substantial rise (46%) in female traders over the past couple of years.
Forex trading involves converting one national currency into another, and the most common currency pairs include GBP/USD and EUR/USD.
In Nigeria, the most common currency to trade with is the USD, which accounts for around 90% of Nigeria’s forex activity. Nigeria is a producer of crude oil, which is sold in dollars.
When prices increased in the 1970s, Nigeria saw a nice economic boost. This increase led to a growing interest in Africa in trading in dollars.
Since 2020, forex trading has seen a roughly 300% growth, and the majority of traders’ accounts (60%) are from Africa, Southeast Asia, and Eastern Europe.
However, the Central Bank of Nigeria July 2021 announced that it will no longer sell forex to Bureau De Change operators, saying the parallel market has become a conduit for illicit forex flows and graft.
According to the announcement, weekly sales of foreign exchange by the CBN will go directly to commercial banks. Banks are mandated to immediately and transparently sell forex to customers who present the required documents, and customers not attended to by the banks are to report to the CBN through a toll-free number or email.
In August 2016, the CBN banned nine deposit money banks (DMBs) from the foreign exchange market, for hiding over $2 billion belonging to Nigerian National Petroleum Corporation (NNPC) from the Treasury Single Account (TSA).
President Muhammadu Buhari was briefed on the breach by the banks, and all nine had been mandated to move the monies to the treasury single account.
The CBN also warned that banks that did not comply with the TSA remission plan would face possible fines and stringent punishment. This was made during the full implementation of the TSA in 2015.
As the naira continues spiraling downwards, the CBN is looking for a solution to stop the currency from hitting the bottom. However, despite its efforts, the regulator has been accused of not taking responsibility.
In response, the CBN has argued that the issue is not a result of its policies, but rather a reflection of external economic factors.
In September 2021, the Central Bank of Nigeria (CBN) accused AbokiFX, an exchange rates aggregator, of manipulating Nigeria’s foreign exchange market.
According to the CBN, AbokiFX was responsible for promoting the exchange of the naira for foreign currencies on the black market, which it claimed was fueling inflation and harming the economy.
In July 2022, the CBN issued a statement warning that it would arrest and prosecute anyone using naira to buy dollars, citing a law that prohibits the use of the Nigerian currency to transact business outside the country.
The CBN claimed that the use of naira for such transactions was undermining the stability of the country’s foreign exchange market and contributing to the depreciation of the currency.
“For those taking money from banks to buy dollars, it is illegal to do so. If the security agencies hold you, you will know the implication of that,” Godwin Emefiele said.
However all this measures did not stop the increase in the forex world as Nigeria forex trader find ways to remain in the forex world.
To get more insights, Biztellers interviewed a forex trader known as Yolofx who spoke about his ordeal in the forex world.
Yolofx is a trader with 10k followers on instagram, and 2k followers on Twitter. He also offers mentorship programs for aspiring traders which requires payment.
He said ” Forex trading is not for everyone as it requires taking risk, consistency and patience. Consistency to me means doing it all over again regardless of the losses incured. I started trading since 2017 till date making it 6 years In the forex world. It has not been easy as it drastically affected my academics. I had to spend extra one year in school because I was not focus rather I gave my all in learning the forex”
According to him, to enter into the forex world, one requires a broker who serves as a middleman between a trader and the commercial bank.
He said “there are various brokers in the forex world, since I started trading I have used 5 different brokers but presently am using exness broker and to me it has been the best so far”
When asked about the legitimacy of the forex trade, he stated that forex trade is very much legit as it requires a verification process before entering the market.
He said “to verify your account in forex trade, you need to have proof of identity which is either your international passport or National Identity Number and also proof of residence which requires your bank statement that is not less that 6 months”
He went further to say “to tell you how complex and risky the forex world is, you can make 500k in a week or two and lose the entire money in a day” He added.
According to him, forex trade has changed his financial status as he has not searched for a job since after graduating from Higher institution.
Uche Paragon, who began his trading career in 2007, has become Nigeria’s richest currency trader with an estimated net worth of over $16 to 20 million.
The Central Bank of Nigeria (CBN) has announced a significant growth in the country’s economy, with a 3.46% increase in gross domestic product (GDP) in the third quarter of 2024.
This marks the third consecutive quarter of expansion, up from 3.19% in Q2 2024 and 2.54% in Q3 2023.
According to the newly published Q3 economic report, Nigeria’s GDP output rose to ₦20.115 trillion, reflecting a notable improvement from ₦18.285 trillion in the previous quarter.
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The CBN attributed this growth primarily to the performance of the non-oil sector, which grew by 3.37% compared to 2.80% in Q2 2024.
The report highlighted transportation, crop production, and other sub-sectors such as financial & insurance services, information & communication, trade, and real estate as major contributors to the expansion.
The non-oil sector accounted for 3.18 percentage points of the total growth rate.
“The expansion of the non-oil sector was driven by the performance of the financial & insurance, information & communication, crop production, trade, transportation & storage, and real estate sub-sectors,” the report stated.
Despite the economic growth, challenges persist. Inflation, particularly in food prices, remains a significant concern, standing at 39.93% as of November 2024.
Rising food and energy costs have also impacted transportation expenses, with intercity bus fares increasing by 20.23% year-on-year to ₦7,117.17 in July 2024, according to the National Bureau of Statistics.
Furthermore, the cost of petroleum, now exceeding ₦1,000 per litre, has driven up logistics and transportation expenses, adding pressure to households and businesses alike.
The CBN acknowledged these challenges, noting that the growth was achieved despite headwinds such as high inflation and rising operational costs.
Enhanced security measures in the Niger Delta have boosted domestic crude oil production, while restrictive monetary policies have helped moderate inflation in some areas.
“The growth recorded in the country is a result of continued efforts to improve the business environment, streamline cumbersome business processes, and deepen the quality of business infrastructure,” the CBN noted.
However, the report comes amid concerns over businesses exiting Nigeria due to persistent economic challenges.
Asharami Synergy, a leading downstream energy solutions provider, has demonstrated its commitment to community development and education by donating essential furniture to Gaskiya Junior School in Ijora, Lagos, Nigeria.
Biztellers reports that the social responsibility initiative was executed in collaboration with Sahara Group Foundation – the social impact vehicle of global energy conglomerate, Sahara Group.
It was gathered that the initiative is part of Asharami Synergy’s ongoing efforts to support education in communities.
The donation includes classroom desks and chairs for the JSS1 classes.
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CEO of Asharami Synergy, Nomnso Dike, said the project will create a more comfortable and functional learning environment and enhance student performance.
“We are delighted at the opportunity to support the attainment of Sustainable Development Goal (SDG) 4, which focuses on ensuring inclusive and equitable quality education. It has been a privilege to collaborate with the management and students of Gaskiya Junior School to deliver this project, and we look forward to future opportunities to enhance academic performance in this historic institution,” Dike said.
According to him, Asharami Synergy’s education-focused social impact initiatives have benefitted over 10,000 individuals. They focus on building capacity and providing the resources necessary to help students learn and grow sustainably.
“Education is the foundation of a brighter future, and at Asharami Synergy, we believe that every child deserves a learning environment that inspires and empowers them” he noted, adding, “This donation is not just about providing furniture; it’s a reminder to the students that their dreams are valid, and we are committed to helping them achieve their goals.”
Vice Principal Academic of Gaskiya Junior School, Sola Oladokun, commended Asharami Synergy for the donation, noting that it would inspire students to perform better with “increased concentration and fewer distractions”.
“These desks and chairs are a game-changer for our students. It’s heartwarming to see their excitement, and as teachers, we are equally thrilled because this will make teaching and learning more effective. We are incredibly grateful to Asharami Synergy and Sahara Group Foundation for this thoughtful intervention,” she added.
Two representatives of the students, Akin Moses and Chukwudi Gift, at the event said the donation would increase their “desire to dream bigger and concentrate better during lessons”.
Also speaking at the commissioning, COO at Asharami Synergy, Adekanmi Adesola, said, “What started as an opportunity to support the communities that host our operations has now come full circle. This donation directly impacts the lives of these students, and we are proud to bring smiles to the faces of the students and teachers.”
The Nigerian Content Development and Monitoring Board (NCDMB) has held the 8th Award and Prize-giving Ceremony of its Annual National Undergraduate Essay Competition 2024.
At the event, on Monday in Yenagoa, the NCDMB reiterated the objectives that underlie its signature events, such as competitive essaying and its twin programme the Science Quiz Competition for High School students.
In a keynote address at the occasion, the Executive Secretary of the Board, Engr. Felix Omatsola Ogbe, described the Essay Competition as “one of NCDMB’s multiple interventions to lift the standard of education in Nigeria” and “to promote proficiency in writing, awareness of local content and its benefit to the national economy, and to engender citizen engagement from undergraduate level.”
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According to him, the sponsorship of the competition is in line with the Board’s mandate, which is capacity-building and local content development, and that the NCDMB understood “the need to inculcate Local Content consciousness among undergraduates in our higher institutions, to make them understand that Local Content is an economic imperative for sustainable development of our local economy, creation of job opportunities and national security.”
The NCDMB boss expressed the hope that the programme would continue to generate interest and awareness about the critical importance of the Nigerian Content law and philosophy in the oil and gas sector as a national economic agenda for job creation, poverty reduction, industrial development and inclusive economic growth.
He reiterated the Board’s commitment to capacity development of Nigerians and development of opportunities for local communities as demonstrated through the Board’s recently launched “Back-to-the-Creeks Initiative.”
The Initiative seeks to broaden the contributions of the oil and gas industry to host communities through enhanced funding for local contractors, support for basic education, and training of youths in relevant industry skills.
In regard to the topic of this year’s essay competition, “Nigerian Content and Opportunities in African Local Content Advancement,” the Executive Secretary said it was well-conceived, considering that most African countries are understudying Nigeria in the implementation of Local Content.
Engr. Ogbe also expressed satisfaction with the transparent process in selecting the winners, stating that “the renowned professors who dedicated their time and intellect to this competition” lived up to the billing.
According to him, “We have built a strong and reputable brand and every project we get involved in must be excellent, professional and world-class.”
Earlier in a welcome address, the Chief Executive Officer of Mahogany 21st Century Concepts Limited, Mr. Eyinimi Omorozi, described the Annual Undergraduate Essay Competition as “a competitive elite programme” designed “to promote academic excellence and to raise awareness about Nigerian Content.”
He expressed appreciation to the Executive Secretary of the NCDMB, Engr. Ogbe, for ensuring sustenance of the programme for eight consecutive years.
In her own opening speech, the Chairperson of the occasion, Dr. (Mrs.) Alice Atuwo, represented by Mrs. A. Tawari, of the Bayelsa Education Trust Fund, commended the top ten finalists for their personal qualities that brought them thus far in the competition.
She urged undergraduate students to be focused on their studies and to guard against distractions that could be destructive.
The winner of the 2024 edition of the Essay Competition was a 16-year-old 200-Level student of the Federal University of Technology, Akure, Mr. Ojedele Jesuferanmi Emmanuel. He received a top-of-the-range HP laptop, a glass plaque, and a cash prize of N1 million.
The first runner-up was 23-year-old Miracle Chibuike Okoli. He received the same grade of HP laptop, a plaque and a sum of N700,000.
The second runner-up, 19-year-old Mary Okogbe, received N500,000, in addition to an HP laptop and a plaque.
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