The Reality of Forex Trading in Nigeria
"The statistics of about 500,000 traders in Nigeria being pelted on the internet is not bloated. We likely had more!"
Forex trading started in Nigeria around 2004. It wasn’t initially embraced by Nigerians back then, mostly because Nigerians prefer doing tangible business and moreover the infrastructure (internet connection and electricity) was relatively poor.
The emergence of Ponzi schemes by some unregulated financial institutions gave forex trading massive popularity! These financial institutions accepted funds from investors with the promise of giving a monthly return on investment to the tune of 8.3%. This was huge!! Most investors diverted their investments from the banks to these Ponzi schemes – which were making waves in the country.
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Nigerians marveled at the returns and discovered upon investigation that those funds running into billions of dollars were actively trading in the forex market!! Kabum! Nigerians (mostly retail traders) decided to take the bull by the horn and launched deep into unknown and untested terrain. The result was massive failure.
Discovering this trend, the first group of people who got their fingers burnt trading, turned into trainers and also brought about an influx of foreign forex brokers in Nigeria. For example Alpari, Liteforex, Instaforex and many others. The influx of foreign brokers also helped in popularising forex because they embarked in a national campaign, going into various cities, educating investors and on-boarding clients in thousands. Another factor that contributed to this wave was that Nigerians did not need to pay huge bank charges in moving their money to offshore brokers as they already have several here.
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This wave peaked in 2010 and suddenly there was a gradual withdrawal of traders from the business because of the unprecedented loss and confidence in the business waned gradually. The crash of the local stock market was also a contributing factor as liquidity dried up in the financial system.
To be candid, the statistics of about 500,000 traders in Nigeria being pelted on the internet is not bloated. We likely had more! But this number has dwindled over the years due to monumental loss suffered by traders to the extent that 30% of those figure actively trading can’t be guaranteed.
The Association of On Line Forex Trading Agents, a group of On Line Foreign Currency trading brokers in Nigeria has started the initiation to restore lost confidence by engaging various government agencies to see to the regulation of the business.
Their plea is already getting the required attention as some of its representatives were invited by joint team of SEC (Securities and Exchange Commission) and CBN (Central Bank of Nigeria) for a meeting on how FX trading can be regulated in Nigeria. We strongly believe that the market will take a new shape, attracting institutional players when the government regulates the industry.
In addition, the SEC and CBN will also be attending the 2nd Lagos Forex expo scheduled to hold in August 13th and 14th to observed the level of participation by traders and brokers at the event. Its very likely that FX regulations in Nigeria will be finalized this year.
This article is poorly researched and filled with misinformation. SEC & CBN did not invite any association of online forex brokers.
Someone who wants to sell sponsorship at his exhibition feels the best way is to lie to brokers that the SEC is taking an interest in setting up regulatory frameworks.
Kindly research the background of your authors before you publish, to save Nigerians the embarassment of poorly written article that has misinformation in it.
thanks!
You’ll hide your face in shame and keep remaining anonymous when regulations will be announced soon. As for selling of Sponsorship to brokers for the event, we have already closed brokers sponsorship reservation before this news was posted and as for the Author Mike Fowope, he has a strong financial service reputation and a leader in the field. I don’t know why someone will just sit back and think of negative issues and come online to broadcast his ignorance. I attended a presentation made to SEC and CBN joint committee on Online FX Regulations in Nigeria with Bade Ajidahun representing… Read more »
@ Anonymous, there is nothing to lie about. I’m aware of the series of meetings with SEC, CBN and Representatives of Forex Brokers associations in regards to working out a legal framework to regulate the industry in Nigeria and Your positive input will be appreciated instead of posting what you are not aware of. For more information about SEC and CBN been involved, contact RKarawusa.sec.gov.ng or amamman@sec.gov.ng and bade@icmtrader.com
Dear anonymous, while you might have your reservations about what ever is written by the writer you yourself should not play into the field of saying what you don’t know about. For Your information Sec Called a meeting and we all went to CBN to discus the issue of regulation with all the issues arising from from forex trading. You could visit basil page to check our pictures at CBN head quarters in abuja. Please you also should veryfy your information before you make unguarded comments. I am making this comment as one of the persons in attendance in the… Read more »
One of the major problems that has plagued foreign exchange trading in Nigeria and the reason it lacks participation from big money are lies peddled around and the failure of the small guys in retail to for once just be modest and straightforward in their assessment of the current reality on ground. Having a meeting with SEC doesn’t portend to establishing license for brokers. It takes a much more complicated process,that none of you including the author of this article has been able to lay out here except hurling insults and abuses on the one person who has enough balls… Read more »
Dear Mr. Anonymous, I share your views and enthusiasm for the state of the forex market in Nigeria. However, I strongly disagree with you that Emeka Basil orchestrated the event in his quest to secure sponsorships from brokers for his expo or for any order insidious motive. I was there at the meeting held in both the SEC and CBN headquarters, I represented the traders and Bade represented the broker while Mr. Basil remained neutral in our debates and clarifications. You are very much aware of a brokerage that vehemently refused to pay their clients’ withdrawals. You should appreciate these… Read more »
Anonymous, you had three issues with this post, 1. you said it was poorly researched 2. you said SEC did not invite any association of forex broker 3. You said its a lie that SEC is not taking interest in setting up regulatory framework while i will not argue with you on number 1 as we are yet to see your own article about your “knowledge”, you have a right to your own view about an article i will take you up on number two and three cos a meeting was held with the sec and cbn in Nigeria and… Read more »
From the uneducated way everyone of you that has replied me has spoken,it shows you’re still were the business was, 10 years ago. I made a point in my first comment that the article is poorly researched, lacking in facts and is misinforming the well meaning executives who read this blog. I also made a point that claiming regulation is coming very soon is a cheap ploy to attract sponsorship & attention to a a forex expo (which I stand with, by the way). Rather than give me intelligent counter argument and specifics to counter my point, ever the arrogant,… Read more »
Shame on you Kelvin Emmanuel
Basil, Bade, Kingsley, I advice you not to pay attention to the anonymous fellow is obvious that he his mischievous and and unlearned very unconisistent in all of his way, look at him explaining the process of getting regulation when he boldly claim that no meeting was called by the CBN and SEC with respect to regulation. Mr Anonymous the issue here is not the process of regulation as you are trying to explain but the very fact that you claim that no meeting was called calling the poster a liar, you equally started the insults and you expect not… Read more »
Interesting comments! In the west, when a company or entity is criticised, they take it as constructive feedback to work on. In Africa, criticism is a threat to another person’s livelihood and a call for enmity. Grow up young men, there’s too much too achieve for you to demonize others, for passing on a feedback. You see really its time that justifies reality, well you could chose to accuse an innocent person who is perfect bystander over this issue or better yet confront the reality of your ineptitude. Maybe in the future, the young man you accuse of been sacked… Read more »
Excuse me? Bade, Basil, Bull FX. What the hell do I have to do with your meeting at the SEC or CBN or this article right here. Why are you mentioning my name please? Be very careful!- For the records: 1) I was never sacked from alpari, I resigned willfully, you can reach out to Marina Nebyshenkova to confirm (who has a glowing recommendation on LinkedIn for me, by the way) 2) I resigned again from ACMGold in 2011. You can reach out to Hina Kassam & Irfan Pardesi to confirm (Let me know if you need their contacts) 3)… Read more »
WoW am utterly disappointed in the So called “anonymous” who has shown and betrayed him self with his last comments, Shaking my head, Strolling away from, cos there is no point continuing this chit chat.
Mike all the best, basil wish you the best in your forth coming expo.
Signing Out.
mr kelvin, did you see me mention your name in any of my comments , if you have any reference to that in this conversation, kindly point it out to me.
Wow, Basil did all these and still walking a free man? I await the drowning things and you have really opened my eyes to these stories. I can see you are a good Orator. There are so many other thing Basil did, spill it out bro.
A journey of a thousand miles begins with a step. The step has been taken, which is the most important thing. It is imperative Forex is Regulated in Nigeria so support the movement.
Secondly, a friendly advise Mr Kelvin, i will not allow falsified usage of my name on social media. Dont make me have my lawyers start looking into DEFAMATION OF CHARACTER.
Hope i have made myself clear.
I am a loss here. At what point did Bade and Basil mention Kelvin Emmanuel in their responses to the comments made by the anonymous? Was their offence in calling out the the anonymous to his identity known? Kelvin, you obviously have an axe to grind with basil as evident in your vituperation. That shouldn’t be a justifiable basis to discredit someone’s article and by extension qualify as lies, efforts made at positioning our industry for regulations. At best, you could have offered or tender your perspectives instead of the all-out attack approach you adopted. This smirks of nothing but… Read more »
Hi my brother, thanks for your article. I am one of the early casualties of forex market foray into Nigeria. I don’t want to chicken out just bcos of bad experience, please can you recommend 1 or 2 skilled knowledgeable forex trainers located in abuja. I want some personal development before I go in again.
Thanks.
Manuel.
Useless Anonymous who has blown several managed accounts, held failed fx-expo, . get this to your dummy failed brain that there was a joint SEC and CBN session with forex brokers and their representatives in Nigeria at Allen three weeks ago.
@AUFX – well, not sure about optimism as much as some people seeing short term opportunities. The market is divided with those playing the long and short game.
it says 27 offices in different countries, not 27 brokers in Estonia 🙂
no probs, it’s your numbers not mine 🙂
no probs, it’s your numbers not mine 🙂
it says 27 offices in different countries, not 27 brokers in Estonia 🙂
@AUFX – well, not sure about optimism as much as some people seeing short term opportunities. The market is divided with those playing the long and short game.
So after two years, where are you people and your useless meetings and expos now? Failures! All of your companies and failed schemes has gone under.
You are really really dumb Kelvin, it did not change the fact that the meeting ever happened, you need to grow up, age should come with maturity but you dont seem to have matured at all. when people have pointed you to the error of your way and you choose to still double down in your error it shows that you are the useless one with a useless agenda. You can go and hold SEC and CBN by the neck and ask them why nothing was done yet. while i thought this issue was laid to rest you came back… Read more »
The error of my ways? Are you kidding right now! Have you finished answering your cases at the EFCC that you’re saying the error of my way! You know I am still waiting for the names and amounts of the people’s account Kayode claimed I blew!
Its y’all that need salvation. I am the guy who stood up to you fools and advised you severally to desist from your criminals ways but alas you refused and you retards went on a PR onslaught to make me look bad, but you see nothing hides under the sun for too long, nothing!
Quite a lot is going on in this world. I am short of words. It is well.