When Did Forex Trading Start in Nigeria? A Historical Perspective

Forex trading has become one of the most talked-about topics in Nigeria, with more and more people showing keen interest in it. Have you ever wondered when did forex trading start in Nigeria and how it has grown over the years? This market has been around for over four decades now, and it has undergone tremendous changes that have made it more accessible and profitable. If you’re interested in trading forex, you’ll be amazed to know about its richness and the potential it has to offer.

fbs promo

It is said that forex trading first started in Nigeria around the late 1990s, but it wasn’t widely recognized until the early 2000s. Now, forex trading has become one of the top businesses that Nigerians are venturing into, with various platforms available, making it easy to trade forex from any location in Nigeria. With the increasing use of technology, forex trading has become accessible to virtually everyone, and it offers ample opportunities to make massive profits in a short period.

Forex trading in Nigeria is not only a profitable venture but also a way to diversity one’s investment portfolio. Unlike some business that requires high capital to start, forex trading has a low minimum deposit, making it possible for anyone to participate. This market is active 24 hours a day, and it is a highly liquid market, meaning there are a wide range of trading opportunities available at any time. The flexibility forex trading offers makes it appealing to many Nigerians, and it is fast becoming a major source of income for many.

The Brief History of Forex Trading in Nigeria

Forex trading, also known as foreign exchange trading, refers to the buying and selling of currencies between different countries. It is a decentralized market where traders can trade globally, 24 hours a day. Nigeria began to participate in forex trading in the late 1990s, and it has become a significant part of the Nigerian financial market.

fbs promo
  • In 1995, the Nigerian government decided to liberalize its foreign exchange market, which led to the emergence of Bureau de Change (BDC) operators. BDCs were licensed by the Central Bank of Nigeria (CBN) to provide retail foreign exchange services to the public.
  • In 2004, the CBN introduced the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) system, which allowed the market to determine the exchange rate of the naira against other currencies.
  • In 2006, the CBN established the Nigerian Foreign Exchange Market Development Committee to develop the forex market and make it more attractive to foreign investors.

The forex market in Nigeria has grown significantly in the last decade, with more retail traders entering the market due to advances in technology and the widespread availability of the internet. According to the Nigeria Inter-Bank Settlement System (NIBSS), forex trading volumes in Nigeria rose from $60 million per week in 2005 to $1.4 billion per week in 2020.

The Impact of Forex Trading on the Nigerian Economy

In recent years, forex trading has become increasingly popular in Nigeria, and its impact on the country’s economy cannot be underestimated. Here are some of the ways in which forex trading has impacted the Nigerian economy:

  • Increased Forex Reserves: With forex trading, individuals and businesses can buy foreign currencies, which increases the country’s forex reserves. This helps to stabilize the Nigerian naira against other currencies and ensures that the country always has enough foreign currency to pay for imports.
  • Foreign Direct Investment: Forex trading has also attracted foreign investors to the Nigerian economy. As more people invest in the country’s forex market, they are also more likely to invest in other sectors of the economy, such as manufacturing, agriculture, and real estate.
  • Job Creation: Forex trading has also created new job opportunities for Nigerians. Many people have found employment as forex traders, analysts, and brokers. The industry has also created jobs in related sectors, such as banking and finance.

However, despite its numerous benefits, there are also some downsides to forex trading in Nigeria. For instance, some unscrupulous individuals have taken advantage of unsuspecting investors, leading to cases of fraud and financial loss.

Therefore, it is essential to conduct thorough research and seek professional advice before getting involved in forex trading.

The Legality of Forex Trading in Nigeria

Forex trading refers to the buying and selling of currencies with the aim of making profits. While it has been in existence since ancient times, modern forex trading started in the 1970s with the establishment of floating exchange rates. In Nigeria, forex trading has gained popularity in recent years, thanks to the advent of the internet and the rising number of online brokers. However, the legality of forex trading in Nigeria can be a bit confusing, especially for beginners.

  • Regulation
  • The Central Bank of Nigeria (CBN) is responsible for regulating forex trading in the country. In 2015, the CBN issued a circular which barred banks and other financial institutions in Nigeria from dealing in forex for speculative purposes. The circular also mandated the registration of all forex dealers with the CBN. This move was aimed at curbing the activities of unscrupulous forex dealers and ensuring that all forex transactions in the country are legal and transparent.

  • Licensing
  • To legally trade forex in Nigeria, you need to be licensed by the CBN. The licensing process involves meeting certain requirements and paying a fee. Once licensed, you can operate as a forex dealer or broker, providing your clients with access to the forex market. It’s important to note that trading forex without a license is illegal in Nigeria and can result in severe penalties.

  • Restrictions
  • The CBN imposes certain restrictions on forex trading in Nigeria to keep the market stable and prevent the outflow of foreign exchange. For example, there are limits on the amount of forex that can be purchased for personal or business purposes, and certain items are not eligible for forex purchase. It’s crucial to stay informed about these restrictions and abide by them to avoid legal trouble and financial losses.

In conclusion, forex trading is legal in Nigeria, but only if you abide by the regulations and restrictions imposed by the CBN. As an aspiring forex trader, it’s essential to familiarize yourself with these laws to avoid falling afoul of the law. Additionally, always work with licensed and reputable forex brokers to ensure your transactions are legal and transparent.

Possibility of making significant profits in a short timeHigh risk of losing money, especially for inexperienced traders
Accessible to anyone with an internet connectionUnregulated brokers may engage in fraudulent activities
Low transaction costsDependent on global economic and political events

While forex trading can be an excellent way to make money, it’s important to approach it with caution and follow the legal and regulatory requirements. By doing so, you can minimize the risks and maximize the rewards of forex trading.

The Most Popular Forex Brokers in Nigeria

Forex trading has gained tremendous popularity in Nigeria over the years, with numerous brokerage firms jostling for a piece of the lucrative market. In this section, we will highlight the most popular forex brokers in Nigeria, providing a brief overview of each one to help guide your decision-making.

  • HotForex – This Cyprus-based forex broker is one of the most prominent in Nigeria, offering traders access to a range of trading platforms and instruments. HotForex boasts of low spreads, a wide range of account types, and a user-friendly interface.
  • FXCM – FXCM is a globally recognized forex broker, providing traders with access to a range of trading tools and educational resources to help them improve their trading skills. With a solid reputation, FXCM is a trusted broker for many Nigerian traders.
  • ForexTime (FXTM) – FXTM is a well-regulated forex broker that offers traders a variety of instruments to trade with, such as forex, commodities, and indices. The broker offers flexible leverage options, low minimum deposits, and an intuitive trading platform.

These three forex brokers are just a tip of the iceberg when it comes to the number of brokerage firms operating in Nigeria. Other notable mentions include Alpari, InstaForex, and XM. It is essential to note that choosing the right broker is vital to your trading success. Thus, it is essential to do thorough research and compare broker features before making a decision.

Below is a table comparing the most popular forex brokers in Nigeria to help give a comprehensive view:

Broker NameRegulationMinimum DepositTrading PlatformsSpreads
HotForexCySEC, FCA, FSCA$5MT4 & MT5, WebTraderAs low as 0.1 pips
FXCMFCA, ASIC, FSCA$50Trading Station, MT4, NinjaTraderFrom 0.2 pips
ForexTime (FXTM)FCA, FSCA, CySEC$10MT4 & MT5, WebTraderAs low as 0.1 pips

As you can see from the table above, each forex broker has its own unique selling proposition. Your ultimate choice should be based on your trading needs, risk appetite, and preferences.

The Role of Central Bank of Nigeria in Forex Trading

Forex trading in Nigeria has been on the rise since the 1990s, but it was not until the early 2000s that the Central Bank of Nigeria (CBN) began playing a significant role in regulating forex trading in the country. The CBN is the primary regulatory body that oversees the forex market in Nigeria and is responsible for ensuring that all forex transactions are conducted in accordance with the laws and regulations of the country.

  • Regulatory Oversight: The CBN is responsible for regulating all forex transactions in Nigeria. This includes setting the guidelines for forex trading and ensuring that all market participants adhere to these guidelines. The CBN also supervises all authorized dealers in the forex market and ensures that they operate within the regulatory framework.
  • Exchange Rate Management: The CBN is also responsible for managing the exchange rate of the Nigerian naira against other currencies. The bank uses a system of managed float to determine the exchange rate and intervenes in the market when necessary to stabilize the naira. This helps to prevent excessive volatility in the forex market.
  • Reserve Management: The CBN also manages foreign exchange reserves to ensure the stability of the Nigerian economy. The bank holds reserves in various currencies, which are used to support the naira and to facilitate international trade.

The CBN also plays a role in promoting forex trading in Nigeria by ensuring that the market is fair and transparent. The bank works to create an enabling environment for forex trading and actively promotes the development of the forex market in Nigeria.

Furthermore, the CBN has implemented various policies and initiatives aimed at developing the forex market in the country. For example, in 2016, the CBN introduced a policy that allowed investors to trade forex at a market-determined rate, in an effort to boost confidence in the naira and attract foreign investment.

CBN’s Role in Forex Trading in NigeriaBenefits of CBN’s Role in Forex Trading in Nigeria
Regulatory oversightEnsures fair and transparent market
Exchange rate managementPrevents excessive volatility
Reserve managementEnsures stability of Nigerian economy
Promotion of forex tradingFosters development of forex market in Nigeria

The CBN’s role in forex trading in Nigeria is essential in ensuring that the forex market operates efficiently and that all transactions are carried out in accordance with the law. The bank’s efforts to promote the development of the forex market in Nigeria have been successful in attracting foreign investment and boosting the country’s economy.

Forex Trading Strategies for Nigerian Traders

Forex trading strategies are techniques or methods that traders use to determine when to enter or exit a trade. Nigerian traders need an effective strategy to stay profitable in the forex market. Here are some strategies that Nigerian traders can use:

  • Price Action Trading – This strategy involves analyzing the movement of prices on the chart without using any indicators. Traders using this strategy rely on price patterns to identify trading opportunities.
  • Trend Trading – This strategy involves identifying the direction of the market trend and entering trades in the same direction as the trend. Traders using this strategy rely on indicators, such as Moving Averages and MACD, to identify the trend.
  • Swing Trading – This strategy involves holding positions for a few days to take advantage of small price movements. Traders using this strategy rely on technical analysis to identify potential swing levels.

Each of these strategies has its pros and cons, and traders need to choose the one that suits their trading style and risk tolerance.

Moreover, traders also need to develop discipline and patience to stick with their chosen strategy. They must also have a risk management plan to protect their trades from significant losses.

Forex Trading Regulation in Nigeria

The forex trading industry in Nigeria is regulated by the Central Bank of Nigeria (CBN). It has strict regulations governing the forex market to protect traders from fraud and unethical practices.

Minimum Capital RequirementForex brokers must have a minimum of 1 billion Naira capital base.
LicensingForex brokers must be licensed by the CBN and undergo yearly audits to ensure compliance with regulations.
Segregation of Client FundsForex brokers are required to keep clients’ funds in separate accounts from the company’s operational funds.

Traders must ensure that they trade with regulated brokers to avoid falling victim to scams and fraud.

Forex Trading Education and Training in Nigeria

In recent years, Nigeria’s growing economy has driven an increase in interest in forex trading in the country. The uptake of forex trading has contributed to an increase in the number of forex traders in Nigeria. With no surprise, the increase has led to an upsurge in forex trading education and training in Nigeria. Here we will discuss the importance of forex trading education and training in Nigeria, the learning paths available, and how to choose a suitable forex trading course.

  • Importance of Forex Trading Education and Training in Nigeria: Without proper knowledge, forex trading can be risky business. Having access to quality forex trading education can help traders acquire the necessary skills and knowledge needed to trade more confidently and mitigate risks. The need for traders to educate themselves on forex trading and learn best practices has led to an increase in forex trading education and training in Nigeria.
  • Learning Paths: Different learning paths are available to aspiring traders interested in learning more about forex trading. Forex training programs vary in intensity and duration. The two primary learning paths are self-study and enroll in a forex trading course.

    Self-studyEnroll in a Forex Trading Course
    Pros: Can be tailored to your schedule, budget-friendly, and accessible from anywhere. Pros: A structured program that is designed by experts within the industry, interactive, and covers all trading aspects.
    Cons: Can be tough to stay motivated and focused, and you lack interaction with experienced traders.Cons: Can be expensive, and you have to stick to a considerable time commitment.
  • How to Choose a Suitable Forex Trading Course: Before enrolling in a forex trading course, there are essential factors you should consider to choose the right course for your trading goals. You should consider the course’s reputation, instructor’s credentials, course duration, content, and pricing. It’s also crucial to join a course that offers mentorship or access to a community of experienced traders, giving you instant feedback as you grow.

In conclusion, forex trading education and training in Nigeria are essential for all new traders to gain the necessary skills and knowledge needed to trade confidently and succeed in this dynamic market. Different learning paths are available, ranging from self-study to enrolling in courses. Choosing the right course is paramount to achieving your trading goals and being successful in the forex market.

How to Start Forex Trading in Nigeria

If you are interested in forex trading and are looking to start in Nigeria, there are a few key steps you should take to get started.

  • Learn About Forex Trading: Before jumping in headfirst, it is important to learn the basics of forex trading. This includes understanding the key terms and concepts in forex trading, such as currency pairs, pips, and leverage.
  • Choose a Reliable Forex Broker: Choosing a trustworthy broker is crucial to your success as a forex trader. Look for a broker that is licensed and regulated by a reputable authority, such as the Nigerian Securities and Exchange Commission (SEC).
  • Open a Forex Trading Account: Once you have chosen a broker, you will need to open a forex trading account. This process will vary depending on the broker, but typically involves filling out an online application and providing some personal information.
  • Make a Deposit: After opening your trading account, you will need to fund it with some money. This can be done through various payment methods, such as bank transfer or credit/debit card. Make sure to check the minimum deposit requirements of your broker.
  • Start Trading: With your account funded, you can now start trading forex. It is important to start small and practice with a demo account before trading with real money. This will help you get a feel for the market and develop a solid trading strategy.
  • Manage Your Risk: Forex trading involves a high degree of risk, so it is important to manage your risk carefully. This includes setting stop loss orders and using proper risk management techniques.
  • Stay Informed: The forex market is constantly changing, so it is important to stay up-to-date on the latest news and developments. This can help you make informed trading decisions and avoid costly mistakes.
  • Stay Disciplined: Finally, it is essential to stay disciplined when trading forex. Stick to your trading strategy and avoid emotional trading decisions.

Forex Trading in Nigeria: A Brief History

Forex trading in Nigeria has been around for quite some time, but it was not until the 2000s that it became more widespread. Prior to this, forex trading was primarily done by banks and other financial institutions. However, with the advent of online trading platforms and the increased availability of the internet, more and more individuals in Nigeria began to take an interest in forex trading.

1995The Nigerian government establishes the Securities and Exchange Commission (SEC) to regulate the securities market.
2004The Central Bank of Nigeria (CBN) establishes guidelines for licensing of forex bureaus.
2006The Nigerian Stock Exchange launches an online trading platform.
2008The CBN issues guidelines for financial derivatives trading in Nigeria.
2015The SEC issues guidelines for the registration of forex brokers in Nigeria.

Today, forex trading is a popular investment option for many Nigerians, with numerous online brokers and trading platforms available in the market.

The Risks and Rewards of Forex Trading in Nigeria

Forex trading in Nigeria has been gaining popularity since the early 2000s but comes with its own set of risks and rewards. In this article, we will delve into some of these factors that can significantly impact a trader’s success.

  • Risks
  • High Volatility: Forex trading is characterized by high volatility since currency prices change frequently based on global events and economic news. This can lead to significant losses for traders who don’t keep up with the market’s changing dynamics.
  • Scams: As forex trading has become more accessible to the average Nigerian, many scams have also emerged. Scammers use various tactics to lure unsuspecting traders, and it’s essential to be aware of these red flags to avoid becoming a victim.
  • Leverage: Leverage enables traders to control a more significant amount of currency than what is in their account. While this increases potential profits, it also amplifies the risk of loss if the market moves against the trader.

Forex trading is not without its rewards, though. Below are some of the benefits of forex trading in Nigeria.

  • Rewards
  • Potential High Returns: With proper risk management, forex trading can generate significant returns for traders. Since the currency market is global, it is open 24/7, providing traders with numerous opportunities to make profits.
  • Flexibility: Forex trading can be done from anywhere with an internet connection, making it possible to trade from anywhere in the world. This makes forex trading an attractive option for those looking for location-independent work.
  • Access to Diverse Markets: Forex trading provides traders with access to various major currencies, including the US Dollar, the Euro, the Pound, and others. This allows traders to make strategic trades based on market trends and diversify their portfolios.

It’s essential to note that understanding these risks and rewards is crucial to becoming a successful forex trader in Nigeria. Forex trading involves a combination of technical and fundamental analysis, patience, discipline, and a willingness to learn and adapt to the constantly changing global market.


Forex trading in Nigeria is possible with a reliable broker and a well-thought-out trading plan. However, traders must be aware of the risks and rewards in the market to succeed. By staying informed, educating themselves, and practicing their trading strategies, Nigerian forex traders can mitigate risks while maximizing their rewards in the currency market.

High volatilityPotential high returns
LeverageAccess to diverse markets

Overall, traders must understand that forex trading is a long-term investment that requires time and effort to achieve success. By being aware of the risks and rewards, traders can make informed decisions that lead to profitable trades and lucrative investments.

Tips for Successful Forex Trading in Nigeria

If you are interested in forex trading in Nigeria, it is important to educate yourself on the best practices of successful traders. Here are ten tips for successful forex trading in Nigeria:

  • Do your research: Before jumping into forex trading, make sure to do your research and understand the principles behind forex trading. Read books, watch videos, attend seminars, and sign up for online courses.
  • Start with a demo account: Most forex brokers offer demo accounts that allow you to practice trading without using real money. Start with a demo account to get a feel for the market and test your strategies.
  • Set realistic trading goals: Determine your trading objective, risk level, and time frame. Set realistic goals for profit and loss and stick to them.
  • Develop a trading plan: A trading plan should include your strategies, indicators, and risk management rules. Stick to your plan and don’t deviate from it.
  • Stay updated on market news: Stay up-to-date on economic news, political events, and market trends. Follow forex news websites, social media accounts, and financial forums.
  • Use risk management tools: Use stop-loss orders, limit orders, and other risk management tools to minimize your losses and maximize your profits.
  • Manage your emotions: Forex trading can be stressful, so it is important to manage your emotions. Avoid making impulsive decisions based on fear, greed, or excitement.
  • Choose a reliable broker: Choose a forex broker that is regulated, has a good reputation, and offers low spreads and commissions.
  • Monitor your performance: Keep track of your trading performance and learn from your mistakes. Analyze your trading strategies and adjust them accordingly.
  • Stay disciplined: Successful forex traders are disciplined and patient. Stick to your trading plan and don’t let emotions get in the way.

Forex Trading in Nigeria History

Forex trading has a long history in Nigeria, dating back to the 1980s when the Nigerian government introduced structural adjustment programs, which led to the deregulation of the financial sector.

After the introduction of the structural adjustment programs, banks and other financial institutions started offering forex trading services.

However, the forex market in Nigeria was not fully developed until the advent of the internet and the emergence of online forex brokers in the 2000s.

Today, forex trading is a popular investment vehicle in Nigeria, with a growing number of traders and brokerages operating in the market.

1986The Nigerian government introduces Structural Adjustment Programs (SAP), which leads to the deregulation of the financial sector.
1990sBanks and other financial institutions start offering forex trading services.
2000sThe advent of the internet and the emergence of online forex brokers leads to the development of the forex market in Nigeria.

Overall, forex trading in Nigeria has come a long way over the years and is now a legitimate investment opportunity for Nigerian traders.

FAQs: When Did Forex Trading Start in Nigeria?

1. When did forex trading begin in Nigeria?

Forex trading started in the 1990s with the opening of the Nigerian stock exchange (NSE) to foreign investors. However, the concept of trading foreign currencies became popular in Nigeria in the late 2000s.

2. Who regulates forex trading in Nigeria?

The Central Bank of Nigeria (CBN) is responsible for regulating forex trading in Nigeria. The CBN sets the rules and guidelines for forex trading activities in the country.

3. Can Nigerians participate in forex trading?

Yes, Nigerians can participate in forex trading. However, they must do so through a licensed forex broker and adhere to the CBN guidelines.

4. What are some popular forex trading platforms in Nigeria?

Some popular forex trading platforms in Nigeria include InstaForex, XM, and FXTM. It is important to ensure that the chosen platform is licensed by the CBN.

5. What is the minimum amount required to start forex trading in Nigeria?

The minimum amount required to start forex trading in Nigeria depends on the forex broker and the type of account being opened. Some brokers require as little as $5 to open an account.

6. Can forex trading be done on mobile devices?

Yes, forex trading can be done on mobile devices using trading apps provided by brokers. These apps allow traders to manage their accounts and place trades on-the-go.

7. How has forex trading impacted the Nigerian economy?

Forex trading has had a significant impact on the Nigerian economy as it has provided a means for individuals and businesses to earn foreign currency. It has also increased the flow of foreign investments into the country.

Closing Remarks

Thanks for reading! We hope this article has answered your questions about when forex trading started in Nigeria. Remember to always trade through licensed brokers and adhere to CBN guidelines. Visit us again for more informative content.