Why Africa is the new Hot Spot for Forex Brokers
Overview – Africa and Forex Trading
More African Forex traders have emerged in recent months as more brokers have opened their doors for such traders who originate from a wide variety of countries from across Africa.
More Africans have started trading Forex for an array of reasons, whether to secure additional income, seeking ways to increase income per month, or as a hobby, to only name a few, the Forex Market has seen a substantial surge in traders from Africa.
Africa is a large and diverse continent which consists of 54 countries and around 41 different currencies, which ensures for an equally diverse Forex industry as well as different stages of development which varies from one country to the next.
Why is there increased interest in Africa?
One thing that has to be noted is that due to various countries and their currencies, there are a lot that are characterized by their illiquidity, volatility, and the fact that they are not traded often on global financial markets.
This would ordinarily pose a large threat to those who want to conduct business in Africa, but Forex online trading platforms have started bridging the gap for local African currencies.
This is all attributed to modern trading technologies which result in the provision of greater liquidity for currencies at much more competitive prices. Sector expertise is another thing which has begun to offset the disadvantages caused by an illiquid market.
This has all led to more efficient access to local funds and it is a benefit that has spread across Africa. More Forex brokers are accommodating African traders despite their local currency and this has led to Forex trading growing exponentially.
In the past few years, and especially the past few months, the trading industry and sector has developed from being merely negligible to a high growth industry due to the high youth population ratio, high mobile penetration, and improvements in technology.
Currently, South Africa and Nigeria are leading the demand along with trading the highest volumes, but countries such as Zimbabwe, Malawi, Nigeria, Zambia, and others are close on their heels with regards to trading frequencies and volumes on a daily basis.
South Africa’s Forex market is especially liquid and there are over 1,000 financial entities who have authorization and regulation under the market conduct regulator FSCA.
There are an estimated 1.3 million traders in Africa, of which 390,000 are collectively from both South Africa and Nigeria. There are numerous experienced investors as well as traders in Africa and apart from Forex, there is interest in stocks, options, CFDs, and futures.
While there are obvious growth patterns and developments in Forex trading in Africa, brokers who are strictly regulated, such as those from Europe, Australia, and the UK, have been led to setup operations in Asia and Africa predominantly.
The trading volumes of such brokers have seen rises and falls in recent months and their profits have been impacted in such a way, that they have had no choice but explore options in increasing their client base by allowing more African and Asian traders.
There is substantial growth potential and due to the growing demands, there are significantly lower operational costs, and this has motivated numerous popular brokers to set up new offices and obtain regulation through FSCA and CMA.
There are nearly no local derivative regulations in African countries and this allows brokers to build trust among African traders by making use of their South African FSCA license along with offering support, local deposit and withdrawals, local currency accounts, and more.
Popular Forex Brokers welcoming African Traders
When considering that there is conceited effort in broadening their client base and diversifying their offering of Forex pairs, popular brokers have started setting up new offices to cater for African traders, and they have obtained FSCA regulation.
1. Tickmill
A well-regulated and popular broker that offers two account types, the use of MetaTrader 4 through which a variety of financial instruments can be traded along with competitive trading conditions, commission-free trading options, and more.
2. Exness
Which offers traders with tight spreads, instant withdrawals and deposits which are instant and can be done 24/7, multiple supported payment methods, competitive trading conditions, use of powerful trading platforms, and more.
3. AvaTrade
AvaTrade is one of the most popular brokers that caters extensively for African traders in providing favourable and competitive trading conditions which consist of tight spreads, zero-commissions, low and transparent trading fees, and more.
4. XM
As a popular and well-regulated broker, XM offers traders with a choice between accounts tailored to the needs of any traders despite their level of experience, low trading and non-trading fees, the trade in numerous financial instruments, and more.
5. Go Markets
This broker offers traders with a unique trading experience and environment along with providing analytics, educational tools, and low Forex fees. There is a variety of financial instruments to trade with favourable conditions and competitive trading conditions.
Final Thoughts
Brokers need new clientele which will subsequently widen their reach in providing online trading services around the globe. African countries can start trading with minimum deposits from $0 and up with reputable and well-regulated brokers.
These brokers cater extensively for all traders despite the trading needs and objectives they may have, and they provide traders with competitive trading conditions which are tailored to suit the needs, objectives, and level of experience of different traders.
As there are further technological developments which become more widespread across Africa, more traders will be able to join the Forex Market, amidst other markets which can only have positive impacts on Africa and its economy.
With South Africa and Nigeria currently leading the trading of Forex merely by trading volume, as other countries gain more access to the market, these volumes are sure to increase steadily as more traders flock to reap the benefits that Forex trading holds.
Countries that are also active participants in the market may not yet have the volume to be placed higher on the list, but as more traders are able to gain access, this is sure to change very soon.