Nigeria is home to an estimated 300 000 traders at the time of writing. This is not surprising, as it is also the country with the largest population on the continent, and also one experiencing fast rates of economic development. It is exciting to see the markets there develop as fast as they are – but this development has come with some major growing pains. Due to the lax oversight of the markets, there has been an abundance of scams that have managed to devastate clients from all over the world.
There have been scams that present themselves as Forex brokers as well – and so, with the country’s exceptionally large amount of traders, it is important to know what broker is worth your money and what is not. Since the country allows its citizens to trade with brokers that are licensed by other jurisdictions, you should only seek out companies that have such licenses. We have gone over five of the most licensed companies in the country in the article below. However, before we introduce them to you, let’s discuss the state of the regulation in the country:
Are the Nigerian markets regulated?
Despite the large interest in Forex trading in the country, the broker there are not regulated in any capacity by CBN. This is problematic, as regulation is the most important aspect of a Forex broker. Without it, there is no telling if your funds are safe – from the company defaulting or from it turning out to be a scam.
Stricter jurisdictions have rules in place that brokers are required to follow, which prevent these dangers from manifesting. Most of them have various minimal capital requirements – the EU has one of €730 000 and the States has one of $20 million. Despite the staggering difference in the required amounts, the purpose of the policy is the same in both cases – they are in place to ensure the broker will not go under due to a lack of liquidity!
Of course, there are also advantages to trading with brokers that are not under such strict regulation – there is the access to higher leverage than with their licensed counterparts. For example, brokers in the EU are required to maintain leverage for their retail clients as high as 1:30 for FX majors like the EURUSD. This is the highest amount of leverage available to the retail client from the EU overall. Meanwhile, forex brokers in Nigeria are not bound to a specific amount of leverage they can offer – so you can easily see amounts which are much higher than the EU-allowed 1:30.
As mentioned, the country allows foreign brokers to offer their services on the Nigerian markets. This means the winning strategy for clients is to find a reliable broker that is licensed by one or multiple reputable regulators from outside the country. This will allow them to benefit from the unrestricted trading conditions and to be sure they are trading safely and with a firm that will not turn out to be a scam!
The five most licensed brokers on the markets
You will find the five most licensed companies that offer their services on the Nigerian market, along with a short introduction of what said service looks like. If you are interested in trading with one of them, however, we suggest you also do a more thorough inspection of the broker to be sure it is what you are seeking!
FXCM
Firstly, FXCM is among the most regulated companies that offer their services in Nigeria. With four licenses, the company has strong guarantees for its legitimacy. These licenses are with the regulators in the UK, Australia and the EU, as well as with the South African FSCA. Clients of the broker will be able to open an account for as little as $50. On said account, they will be able to make use of a leverage as high as 1:400. Of course, a good broker is nothing without a good trading platform – the company offers access to industry leading trading software MT4. Copy trading is also available via a surprisingly sophisticated trading platform.
FXTM
Secondly, FXTM is an excellent brokerage that has realized the potential of the Nigerian markets and offers its services there. Once again, this broker is safe as it is licensed within four jurisdictions. These are the EU, the UK, Mauritius and South Africa. As far as trading conditions are concerned, FXTM has a similar minimum deposit of $50, but a significantly higher maximum leverage available. Its leverage is of up to 1:2000. The broker also offers access to the Metatrader 4 platform, as well as its successor – Metatrader 5, which is the best trading software on the market today.
FBS
FBS is another broker that is highly licensed. The company is under the oversight of the Cypriot CySEC, the ASIC in Australia, the ISFC in Belize and the South African FSCA. What is especially notable about FBS is the fact the broker offers access to an account for as little as a single dollar. This means the clients of the firm will be able to get their feet into the water and gain some hands-on trading experience before investing more in the Forex market. They will be able to also make use of a rather significant amount of leverage too – amounts of up to 1:3000 are available to them. The trading software of choice for the broker is once again the two Metatrader platforms, as well as a mobile trading app for Android devices.
HFM
The fourth broker in our list is HFM. The company has managed to obtain licenses in the EU, the UK, Kenya and the United Arab Emirates. The trading conditions with it are quite enjoyable too – the minimum deposit for an account is $5, and the maximum leverage is of up to 1:1000. Its offered trading software includes the Metatrader platforms, as well as a web-based platform, called HF Copy, that is specially designed for copy trading. Clients of the broker will also be able to make use of a lucrative deposit bonus, which is worth mentioning!
OctaFX
The last broker on our list is OctaFX. The firm has lighter regulations than the other companies mentioned before – it is formally registered in a single jurisdiction. However, that jurisdiction is Cyprus, the seat of the regulation over the EU Forex market. Therefore, the legitimacy of OctaFX is certain. We include the firm in the list because it has branched into the Nigerian markets and offers access to services, specifically designed for the trader there. They will be able to deposit using the Naira directly and not have to worry about exchange fees. Speaking of exchanges, OctaFX also offers a very favorable fixed rate of exchange for the NGN. As for trading conditions, the broker offers access to a minimum deposit of $40, which is quite affordable. The leverage with the broker is as high as 1:500, and its clients will be able to use the Metatrader 4 and 5 platforms. Finally, they will have access to a 50% deposit bonus as well.