The global forex market is booming and Africa has seen a significant increase in traders and brokers in the last few months.
Since the COVID-19 outbreak with the resulting government-enforced lockdowns around the globe, economies have weakened and several businesses have suffered, sending the unemployment rate across the globe skyrocketing.
The unemployment rate across Africa soared, with numbers increasing to more than 30% in South Africa and 23% in Nigeria, changing the fortunes of forex trading in Africa as many people had to scout for new opportunities to provide for their families.
As it happens, South Africa and Nigeria are also Africa’s two largest economies, and the increasing number of forex traders in these two countries alone has impacted the forex markets greatly.
Even the employed are exploring new means of additional income. The forex market is easily accessible and more than $5 trillion is traded each day.
The market is open 24 hours a day, 5 days a week and all a potential trader needs is an internet connection and a smart device, laptop or PC, making forex trading an ideal way to earn money from anywhere in the world.
A strong rivalry among different brokers and the need to offer better trading conditions than the next broker is another reason trading has increased recently in Africa.
Africa’s youth is eager to learn, technology is advancing, costs and fees are decreasing and more financial instruments such as CFDs, commodities, stocks and indices are being offered to cater to the needs of all traders across the African continent.
The fact that Africa’s currencies are starting to perform better and the economy is stabilizing also has a great effect on forex markets. The South African Rand is one of the most traded currencies in the world and is steadily getting stronger.
African forex brokers offer a very high leverage, which can maximize profits when understood and used correctly.
In 2018 new restriction laws were put in place by the European Securities and Markets Authority (ESMA). These restrictions handicap traders in terms of their profit potential, which has prompted them to move to the greener pastures of the African markets.
The FSCA of South Africa allows for unlimited leverage ratios, and while the organisation is not as strict as many other regulators, it has taken steps to enforce client protection measures which mitigate the risks of trading on higher leverage.
Improvement should soon be visible for other African countries such as Nigeria, which will result in Africa’s forex numbers increasing even more.
As most of the African countries are still in the process of forming regulations with regards to forex trading, potential investors are advised to only select brokers that are regulated and in compliance with financial institutions.
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