Best Nigerian Forex Brokers 2019

Nigeria is one of Africa’s largest economies. In 2017, the IMF placed the nation at the number one spot on the list of Africa’s most successful countries, pulling in a GDP of over $376 billion. With crude petroleum making up the majority of the country’s exports in 2017 (over $35 billion), followed by petroleum gas, and refined petroleum. Recently, the country reported a year-on-year GDP growth rate of 2.4%, showing positive signs of economic expansion.

The recent economic expansion prompted an increase in demand for foreign exchange services, with many regulated forex brokers, including FXTM, Alpari, and AvaTrade, setting up shop in the nation.

With this expansion came huge opportunity to trade forex online from the region. Select a forex broker from the list below to get started trading forex online from Nigeria.


BrokerHighlightsPlatformRegulated byRatingProceed
FPmarkets
  • 14 years experience, billions traded daily
  • True ECN trading - spreads from 0.0 pips
  • Institutional liquidity, access to 10,000+ markets
  • Lightning-fast execution, flexible 500:1 leverage
  • Advanced trader features - analytics & VPS solutions
MT4, MT5, WebTrader, IRESSASIC, CySec, FCA10
AvaTrade
  • Regulated internationally across 6 jurisdictions
  • Access automated and manual trading platforms
  • Over 50+ currency pairs incl. major, minor and exotic
  • Competitive spreads at only 0.8 pips per trade
  • Professional 24/5 support in multiple languages
MT4, AvaOptions, Mac/Web TradingASIC, CBI, BVIFSC, SAFSCA, FSA, FFAJ9.9
Pepperstone
  • Advanced account analytics
  • Low cost trading from as low as 0.0 on EURUSD
  • Client bank/hedge fund level liquidity and spreads
  • Exceptional client support
  • Great company values
MT4, cTraderFCA9.7
Plus500
  • CFD service with tights spreads and zero commission
  • 1:30 leverage for retail, 1:300 for professional
  • Ultra-fast & reliable execution
  • $1,849BN traded last year
  • UK FTSE250 listed company
Bespoke web, mobile and desktopFCA, CySEC, ASIC, MAS9.5
eToro
  • 274M trades opened on eToro
  • Social trading leader
  • Clients from 140 countries
  • Trade on a wide range of markets
  • Copy leading community traders to profit
BespokeFCA, CySEC8.6
IC Markets
  • World's largest true ECN forex broker
  • Spreads from 0.0 pips, no requotes, no price manipulation
  • Liquidity mix keeps spreads tight 24/5
  • Execution speeds of under 40ms
  • $568BN trading volume
MT4, MT5, cTraderAFSL8.4

Since the late 1900’s the country’s native currency, the Nigeria Naira (₦), has experienced huge waves of volatility, forcing the nation to adopt a multitude of different approaches to stabilising their currency whilst keeping the Nigerian economy afloat.

A Brief History Of Forex Trading In Nigeria

Over the years, the nation has developed an increased demand for foreign exchange services, mainly due to the increases in oil exports and structural economic reforms, which have significantly boosted trade for the country since the 1970s. During this period of economic expansion, the demand for foreign exchange services within the country soared. This rise in demand correlated with a shortfall in supply, soon leaving the country in a currency crisis in 1982. This crisis lead the country's central bank to enforce various foreign exchange management tools to ensure shortages did not occur again in the future.

This increase in demand for foreign exchange services multiplied with diminishing forex reserves encouraged the development of a new market that would facilitate foreign currency exchange trading in Nigeria. In 1986, an initiative named the Second-Tier Foreign Exchange Market (SFEM) was created, with the idea that both local and foreign market participants would determine a true exchange rate value for the Nigerian Naira. This secondary market was also initiated to reduce the demand for unregulated black market foreign currency trading and to help deregulate the foreign exchange market in general, thus reducing the need for constant government regulation.

The SFEM scheme contributed to the gradual devaluation of the Naira, due to the dutch auction system that was eventually adopted by 1987. This then leads to the merging of the secondary market exchange rate and the official government rate, in order to form the unified official foreign exchange market in July 1987. This unification meant that public sector transactions were tied to the country's commercial exchange rate.

In 1989, the foreign exchange market was further expanded, with the introduction of Bureau De Change for private foreign exchange transactions.

1995 marked a key year for the foreign exchange markets in Nigeria, with the introduction of the autonomous foreign exchange market (AFEM). The AFEM was a way for the Central Bank of Nigeria (CBN) to exchange foreign currencies through authorised dealers, who were able to buy and sell the Naira at an exchange rate determined by the markets.

In 1999 the CBN further boosted the liquidity of the forex market by introducing the Interbank Foreign Exchange Market (IFEM), allowing financial institutions, including banks, to trade currencies between each other.

As you can see, Nigeria has faced many developments with regards to its domestic and international foreign exchange operations. With crude oil currently being the country's biggest export, the Naira is heavily impacted by price swings in the liquid commodity, which has had a positive impact on the currency over the last few years.

The Current State Of The Nigerian Naira

As of current, Nigeria's economy is performing exceedingly well. As stated above, the African nation was recently listed as the IMF's number one economy in Africa, with the country also reporting year-on-year GDP growth of 2.4% in February 2019. The country's forex reserves have also been on the rise since the 2016 slump, currently holding over $44 billion worth of foreign currencies - a strong indicator of a flourishing economy.

In the last ten years, the Naira (NGN) has witnessed a huge leap in inflation. Between 2009 and 2014, the USD/NGN exchange rates remained fairly stable at around $1/₦150. However, in the last three years, USD/NGN rates have soared, with the current rate stand at roughly $1/₦300.

(source: tradingeconomics.com)

This rise in inflation is predominantly down to the central bank's high interest rates and the West African nation's economic contraction in 2016, which saw growth decline for three consecutive quarters.

Despite this, as of current, the economic policies in place has kept the Naira stable, with inflation rates staging a decline below the CBN’s target rate.

Nigeria still holds a plethora of different exchange rates for its domestic currency, including the CBN’s official rate, the NIFEX rate, and the NAFEX rate. Both NIFEX and NAFEX rates have been steadily converging over the years, with each rate near-enough at the same level - nearly matching the exchange rates offered by black market brokers. With the recent convergence of each exchange rate, many entities including the IMF are calling for Nigeria to unify each variation to form one single exchange rate for the currency.

The CBN, however, has maintained its official exchange rate of around ₦305 to the ($) dollar, which it uses to supply certain companies, such as fuel importers, with cheap foreign exchange.

The current developments in foreign exchange markets could prove to be hugely beneficial for forex traders who base their operations in Nigeria.

Trading Forex In Nigeria

Since 2004, retail trading in Nigeria has had a mixed response. Due to the rise and fall of forex-based Ponzi schemes, which left many would-be investors out of pocket, the forex trading landscape started to gain a negative perception amongst the population. However, thanks to the recent economic growth in the country, and improved regulation, the forex trading markets look to be gaining more attention.

Forex services have increased in demand in Nigeria over the last few years. There are now many brokerage firms who have based operations in the West African nation, including FXTM (forextime.com).

When it comes to trading forex in Nigeria, you want to make sure that the brokerage you’re dealing with is properly regulated by an official financial body. Luckily, brokers such as FXTM are regulated by the Cyprus Securities and Exchange Commission (CySEC), which adds a higher level of security to the funds deposited in client accounts. Other offshore regulators including the UK’s Financial Conduct Authority (FCA) and the US’s Securities and Exchange Commission (SEC) help to oversee the operations of brokers based in Nigeria, providing an additional layer of security to the forex markets, further boosting trust and liquidity.

With the advent of officially regulated brokers, traders based in Nigeria can now use the Naira to trade with. The ability to use the local currency allows Nigerians to have the freedom to trade currencies without having the burden of transferring funds to offshore trading accounts, which would inevitably incur high bank fees.

With improved regulation, and the ability to trade using the NGN, and removal of high banking fees required to transfer fund to offshore trading accounts, participating in the forex markets in Nigeria has never been easier! Just make sure to be diligent in your choice of broker, and ensure they’re properly regulated.