Nigeria actually has one of the most significant shares in the forex trading market in Africa because of its robust economy and other factors. It’s said to have around 300K traders and a daily trading volume of billions of dollars. Being a tech-savvy country—the home of 5 of the seven tech unicorns in Africa—the nation has greatly benefited from technological advancements in forex trading platforms.
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According to Google Cloud research, 50% of trading systems and data providers are actually providing data services powered by artificial intelligence and machine learning. This has transformed trading worldwide, but in this article, we’ll dive into how it’s specifically changed the game for traders in Nigeria. Read on to discover more.
Increased accessibility
A wider range of Nigerian traders now have access to Forex markets regardless of age or status. This is because various trading platforms have introduced mobile trading apps, taking advantage of the widespread use of smartphones in the country.
According to Statista, the number of smartphone users in Nigeria was forecast to increase continuously between 2024 and 2029 by a total of 52.1 million users. Presently, over 42 million people have access to mobile phones and the Internet, making trading accessible to about 19 percent of the large population.
You can’t ignore the flexibility that trading platforms have brought about. Like now, you can download apps like MT4 for PC on your desktop or laptop and access the market regardless of whether you are in Lagos or Kano. Also, the apps are equipped with automated trading options and analytical tools and can provide the trader with real-time notifications. All of these allow one to stay connected to the market and take advantage of various opportunities in real-time.
Improved measures
With Nigeria’s Forex market going digital, regulatory bodies like the Central Bank of Nigeria (CBN) have come up to support and shape this digital move. CBN oversees and regulates forex trading in Nigeria to keep illegal traders or brokers away and create a conducive space for the legit ones to thrive.
They’ve also set some measures to boost forex liquidity, such as limiting how much banks can hold in foreign currency, capping their net open positions at 20% of shareholders’ funds, and outlawing street trading of foreign currency—thus promoting economic expansion.
Traditional forex bureaus and money changers have really had to step up and transition to the digital arena, offering online currency exchange services in order to remain relevant in the game.
Informed decision making
Most trading mobile apps, like MT5, have built-in features that can help you make informed decisions while trading. Once you complete your MT5 download, you can access some of them.
These features include advanced charting tools that help one analyze the market using charts and fundamental analytics for evaluating the value of an asset and what factors might influence its price. They also provide for algorithmic trading to cut down transaction costs and allow traders to take control of their own trading processes.
The platforms, too, have chatbots and virtual assistants that operate around the clock to offer any assistance you might require when navigating or using the app. These elements help traders make calculated moves and adjust their strategy where necessary, having a smooth experience while at it.
Increased financial education
Technological advancements in digital forex trading platforms have played a significant role in increasing financial literacy and forex trading awareness in Nigeria. Surprisingly, a recent CBN analysis revealed less than 50% of Nigerians have a primary knowledge of financial principles.
With an internet penetration of about 55%, Nigerians are taking advantage of their mobile devices to access online resources, educational platforms and ‘the school of social media’ to learn about forex trading and develop the necessary skills. Some of the trading platforms actually offer the training materials themselves for the convenience of their users.
Security measures
You can agree that online platforms have become a common target for scammers and cybercriminals. Did you know that up to 60% of small businesses go out of business after encountering a cyber attack, according to Terranova Security? With that knowledge, some online trading platforms have implemented measures to safeguard their clients from fraud.
Measures like encryption and two-factor verification protect the trader’s assets and personal information, which could otherwise be used maliciously if it lands in the wrong hands. In fact, two-factor verification alone can actually reduce up to 85% of targeted attacks and over 80% of data breaches, Wifi Talents reports.
The government also steps up to fight against cyber crimes, considering the country is one of the cybercrime hotspots, as it ranks 5th in the first-ever World Cybercrime Index.
Final thoughts
As you can actually see, technological advancements have truly transformed Nigeria’s forex trading landscape, presenting the people with new opportunities and challenges.
To sum it up, the impact seems quite positive and may have contributed to the industry’s growth. Trading Economics reports that Nigeria’s foreign exchange reserves increased to 34070 USD million in June from 32690 USD million in May 2024.
The effects have also trickled down to the country’s overall economy as they have promoted foreign investments and business by enabling companies to control the currency challenges of cross-border transactions. The Nigerian market is now more dynamic and effective and the trend looks promising.
