According to a recent survey that regulated brokers across Africa have experienced a median growth rate of 21.35% between 2019 and 2020.
While this increase is being largely driven in larger African countries such as South Africa and Nigeria (which are the two biggest forex markets in Africa), were also seeing a significant uptake in emerging areas such as Zimbabwe, Kenya and Botswana.
But why is forex trading on the rise in Africa, and why is Nigeria shaping up to be the dominant market within the region as a whole？
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Increased Internet Penetration: While the market leading country Nigeria currently has a 47% Internet penetration rate, this is projected to reach 65% by 2025. This is indicative of the wider rate in Africa, creating a scenario where aspiring traders have far greater access to the forex market in real-time. In Kenya, the corresponding rate is 87.2%, and traders are leveraging this to seek out passive income streams through 2021.
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Increased Marketing for Brokers: As technology has evolved to meet forex trading demand in Africa, so too brokers have been empowered to increase their marketing efforts. As the market has subsequently become more competitive too, weve seen more aggressive marketing techniques deployed, with lucrative welcome bonuses and access to universally recognised platforms such as the MetaTrader 4 central to such strategies.
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The Impact of Coronavirus: As the coronavirus took hold through 2020 and the first half of this year, people throughout Africa were confined to their homes for extended periods of time. This, combined with the intermittent closures of regional economies, left people searching for passive income streams through the comfort of their own homes, with the forex market offering a viable option for young and old residents alike.
The Rise of Forex Trading in Nigeria and Zimbabwe
Forex trading first became popular in Nigeria during the 70s, when residents saw a spike in their disposable income following a crude oil price boom.
Demand has increased further since this time, especially as the Nigerian economy has evolved and continued to diversify.
A similar trend has evolved in Zimbabwe, despite the challenges posed by ongoing hyperinflation and the monetary policies used by the central bank to try and mitigate the effects of this.
These are two of the fastest-growing forex markets in Africa, which in turn has created a wider service industry and subsequent economic growth. For example, an individual by the name of “Bossy Welly” is said to have coached 2,000 aspiring traders over the course of the past five years in Zimbabwe, with some students as young as 14.
This is contributing to the next generation of traders while helping investors to avoid potential scams and commit their money to viable endeavours.