When talking about forex trading, Nigeria and Africa in general are not the first thing that comes to mind. But such dismissive presumptions are not justified by reality. Nigeria is not only the most populous country on the African continent, but also one of the largest and fastest growing economies in the region. Online trading of forex and CFDs is actually very popular in the country, with Nigeria even surpassing South Africa in this regard.
Despite the activity in this market, however, forex trading is not placed in a formal regulatory framework and is virtually unregulated. This is not to say that Nigeria is like a financial Wild West. Earlier this year, for example, the Central Bank of Nigeria (CBN) and the local Securities and Exchange Commission (SEC) stepped in to introduce guidelines for companies offering cryptocurrency trading. The move was the result of a boom in crypto investment in the country, which was predictably coupled with a rise in related crypto scams.
But in terms of forex and CFD trading, the responsibility to judge which broker is trustworthy rests squarely on the shoulders of the trader. While this carries risks for inexperienced people just entering forex trading to fall into the clutches of scammers, investors in this country actually have a fairly extensive choice of quality brokers.
Being a large emerging market, Nigeria has attracted many of the leading brands in the industry. Due to the lack of a specific regulatory framework, they usually offer their services in Nigeria through their offshore divisions based in jurisdictions such as Belize or Saint Vincent and the Grenadines. As a general principle, it is advisable for the retail trader to use the services of duly licensed regulated intermediaries. But in the absence of such a choice, the next best option is a broker with a well-established international brand.
The desire of these brands to maintain their image drives them to maintain good business practices even in their formally unregulated offshore branches. Many provide offshore clients with guarantees such as negative balance protection and segregation of client money from firm operational funds even though they are not required to do so.
Among the advantages of global brands is that they offer their clients the latest and greatest in terms of trading software. At the very least, a trader can expect to have access to advanced platforms such as MetaTrader 4 (MT4) and MetaTrader 5 (MT5), as well as the ability to trade from whatever device is most convenient. Competition between major players in the Nigerian market also benefits customers because it leads to more advantageous overall terms.
The more experienced and willing to take risks traders in Nigeria can also benefit from much higher levels of leverage than is allowed to retail clients in highly regulated jurisdictions. Many forex brokers in Nigeria also take advantage of the opportunity to offer bonuses and promotions to clients, which is prohibited for their branches in the European Union, the United States or Australia.
Let’s take a look at who the leading brokerage brands operating in Nigeria are and what they offer their clients.
While this is not a ranking, it is logical to mention FXTM first. It is one of the most established international brands, licensed in the EU, UK and South Africa, and has received numerous industry awards. In Nigeria, FXTM operates through a company incorporated in Mauritius. But the company’s presence in the African country is not just online – customers have the option of contacting two local offices in Lagos and Abuja.
FXTM allows beginner traders to open a Micro Account for just a 10 USD minimum deposit. The broker also maintains an extensive library of educational materials. The threshold for the more professional trading accounts, Advantage and the Advantage Plus, is 500 USD. These two accounts give the trader a choice to pay the broker either just a spread or a fixed commission, the amount of which hangs on the volume of trading – i.e. the more actively and large-scale you trade, the lower the price you pay.
The maximum leverage reaches the impressive level of 1:2000 when trading with major currency pairs, but the broker imposes lower limits when the account balance exceeds 50,000 USD.
FXTM clients have the option to use desktop and mobile versions of the MetaTrader 4 and MetaTrader 5 platforms. This software has been an undisputed favourite of brokers and traders for a second decade thanks to its extensive and advanced automated trading features.
FXTM customers can take advantage of loyalty programs and participate in trading contests for which they can receive rewards. The broker also provides a 50 USD refer-a-friend bonus.
Depositing and withdrawing funds can be done with virtually any method – international and local bank transfer, credit/debit cards, a host of popular e-wallets and even Bitcoin.
FBS is also a well-known and awarded global brand with licensed branches in Cyprus, Australia, South Africa and Belize. The latter is responsible for the broker’s operations in Nigeria, as well as other emerging markets such as Indonesia and Malaysia.
In terms of trading software, FBS offers an industry-standard choice between MetaTrader 4 and MetaTrader 5, with the addition of their own mobile app, FBS Trader.
However, the broker distinguishes itself with a very broad selection of trading accounts covering the needs of the widest possible range of traders. Newbies can open a Cent or Micro account for as little as 1 USD and 5 USD, respectively. Professional investors can benefit from a Zero Spread Account or an ECN account with an investment of 500 USD and 1000 USD. There’s even a dedicated cryptocurrency trading account, which also has a threshold of just 1 USD.
The standard account requires a minimum deposit of 100 USD, but offers a competitive floating spread starting at 0.5 pips. When Zero Spread and ESP accounts are used, the trader can expect a spread close to zero, but pays a fixed commission of 20 USD and 6 USD per lot respectively.
The maximum leverage depends on the account type, with Micro, Standard and Zero Spread reaching the impressive level of 1:3000. Even the ECN account allows trading with a leverage of 1:500, which is tens of times higher than allowed in Europe or the US.
The bonuses offered by FBS Nigeria include a “Level Up” bonus of up to 140 USD, a 100% Deposit Bonus as well as a cashback promotion for customers who trade more than 5 lots. Customers can also participate in trading competitions with prizes even including luxury cars.
Account funding and withdrawals can be made through Visa, Skrill, Neteller, StickPay, PerfectMoney and wire transfer.
Another big name in the industry that offers its services in Nigeria is OctaFX. The primary licensing of this premier brand is from the Cyprus Securities and Exchange Commission (CySEC). In non-regulated markets outside the EU such as Nigeria, OctaFX operates through a subsidiary incorporated in Saint Vincent and the Grenadines. As pointed out, working with an offshore branch means you have to put your trust entirely in the brand, but in this case that’s not an issue.
Like its main competitors, OctaFX provides clients with the ability to use the full capacity of the MetaTrader 4 and 5 platforms, including the copy-trade capability, which is particularly useful for novice traders who want to benefit from the insight of experienced traders.
The trading platform is the main difference between the two types of accounts offered by OctaFX. The account for MT5 users is called Smart Trader and the one for those who prefer MT4 is called Habitual Trader. MT5 users also have access to trade with more indices – 10 versus 4.
The financial instruments offered by OctaFX are relatively few in number and with a clear focus on cryptocurrencies. The broker offers trading in 30 cryptocurrencies and just 35 fiat currency pairs.
In this regard noteworthy is the very high leverage offered for crypto trading – 1:25. In comparison, the clients of the Cyprus division of a broker can trade crypto assets with a leverage no higher than 1:2. The maximum leverage for forex trading is 1:500.
Both accounts only have a recommended minimum deposit of 100 USD and promise competitive spreads starting from 0.6 pips.
OctaFX also provides a 50% Deposit Bonus and organises regular trading competitions in which outstanding traders receive various prizes. If you have referred other clients to OctaFX you receive rewards depending on their trading volume.
As you might expect, Octa offers a very wide choice of payment methods, ranging from local banking, established e-wallets like Skrill and Neteller, to a host of cryptocurrencies.
Another broker that is easy to recommend is FP Markets. The group of companies behind the brand are licensed by respected regulatory bodies such as CySEC and Australian Securities and Exchanges Commission (ASIC). In markets such as Nigeria, the broker operates through a company registered in Saint Vincent and the Grenadines.
FP Markets offers two types of accounts to all its clients – Standard and Raw, through which over 60 currency pairs, commodities and indices can be traded. With the Standard account, the client pays a single spread starting at 1 pip. As the name implies, the Raw account offers raw spreads starting at 0.0 pip, coupled with a commission of 3 USD per side per lot.
Both accounts can be used with MT4 and MT5 platforms. The software is available on all major desktop operating systems, mobile devices, as well as in browser version.
FP Markets’ customers in Nigeria can, as expected, benefit from higher leverage than those in Australia or Europe – up to 1:500. The minimum deposit is 100 AUD or equivalent in another
Accounts have an included perk in the form of a Virtual Private Server, which allows automated trading scripts to be independent of the trader’s personal hardware.
One significant difference between FP Markets and most of their competitors is that their offshore company does not offer bonuses and promotions. However, this is offset by the favourable trading conditions and vast amount of educational materials and programs.
The list of payment methods is impressive. In addition to the standard options such as credit cards, local and international bank transfer and e-wallets such as Skrill and Neteller, FP Markets allows account funding through a large number of local providers as well as with the Broker-to-Broker method.