NAIROBI, Kenya Aug 30 — If you weren’t already aware, there is a trading revolution going on in Africa. Africans are getting more active in the markets, especially on Forex, and the reasons for this are as interesting as they are diverse.
The continent is changing in many ways and advances in infrastructure development, especially when it comes to communications, certainly have something to do with the increasing popularity of forex trading. However, many other factors may also be at play here, including improved access to online trading platforms like Metatrader 5.
Let’s take a look at some of the reasons why forex trading is growing in popularity in African countries.
Market volatility increased interest in forex trading across the board
One thing that is bringing a lot of new people to the foreign market, including in Africa, is the high volatility of the markets. This volatility is mainly the result of the turmoil caused by the pandemic and all the financial restrictions that have surrounded it. The war in Ukraine is further increasing volatility, which allows savvy traders to make profits on swing movements, whether negative or positive.
Couple this with the fact that opening a forex account and starting trading is extremely easy and doesn’t require much capital. This makes Forex the single most democratic market and allows people with the most modest of means to participate.
Increase access to smartphones and the internet
Smartphones and tablets have taken over the continent, and the internet is becoming more accessible. Wireless internet technology has allowed countries to increase access to the internet very fast, and brokers do a great job at making their trading platforms as mobile-friendly as possible.
Online trading platforms enable people to trade from virtually any computer no matter the model, type, or age. This allows people with outdated computers and Chromebooks (which are extremely popular on the continent) as well as people who access the internet through internet cafes, to fully participate in trading.
They’re taking advantage of lesser-known markets
Having a thorough understanding of little-known markets and currency pairs is a massive advantage in forex trading. Africans with inside knowledge of developments across the continents, whether it’s natural resource discovery, conflicts, infrastructure development, shifting political climates, or changes in fiscal policy can capitalize on price movements and identify opportunities other traders weren’t even aware were there.
Movements can also be much starker and more evident on lesser-known pairs and currencies, which makes timing easier in many cases.
Increase in financial literacy
Another factor that needs to be considered is the increasing financial literacy of the people on the continent thanks to various programs, better schooling, and talent coming from abroad. Forex platforms themselves like to educate traders, and African traders are taking full advantage of these resources, using them as a proxy for a more expensive and less accessible formal education.
Africans are getting more active in the Forex markets and in markets in general, and this is good news. We can expect more to keep coming as internet penetration rates continue to grow and more Africans learn about the virtues of currency trading.
