Is trading legal in Africa?

In the last four decades, trading has become a common practice worldwide. From developed countries like the US to developing economies like China, it has spread everywhere.

Fortunately, Africa is no exception. Trading is allowed in different parts of African continents like South Africa, Nigeria, Ghana, etc. In fact, trading options like forex trading have made a competitive edge in these countries. 

But is trading completely legal throughout entire Africa? Well, almost. Here’s more about it:

Trading in Africa

African countries understand the importance of trading, and that’s why many unexpected names are leading the charts of stock markets and forex markets. If we check through the past years’ performance, Zambia stood up as the best-performing stock market in Africa in 2021. Its stock exchange saw a major growth of more than 50%. Some other countries that lead the charts were Ghana, with 44% growth and Malawi, with 40% growth. 

Just like, forex trading is quite popular in Africa too. In fact, the continent boasts 1.3 million forex traders presently, with numbers increasing eventually. Some of the countries that are leading the forex trading chart are Nigeria, South Africa, and Kenya. 

Is forex trading legal in Africa?

Forex trading is legal in Africa, considering you’re associated with a genuine and licensed forex broker. There are many countries in South Africa that restrict forex trading without a licensed broker. So, if you aren’t trading under a valid forex broker, it’s time to change it.

For example, if you’re trading in Ghana, do your research and skim through the list of forex brokers in Ghana who is well-versed in the sector. Then, check for their license and basic information before moving forward with them. 

Similarly, for countries like Kenya and South Africa, select the forex brokers who are licensed under Financial Sector Conduct Authority (FSCA) or Capital Markets Authority (CMA).

Which countries allow forex trading in Africa?

With a licensed broker, forex trading can be practised in several African countries, including;

Nigeria
Kenya
Ghana
South Africa
Ivory Coast
Namibia
Mauritius
Tanzania

Of course, there are many other African countries on the list, but these are the ones with a good number of investors and beginners. If this rising trend follows, the future looks bright for forex in Africa. 

Is forex trading prohibited in any African countries? 

Forex trading is not practised in African countries under Sharia law. This means it’s not very welcome in countries like Algeria, Egypt, Burkina Faso, etc. 

Besides that, Africa also follows some regulations for forex trading to keep any fowl practices at bay. These rules are related to the maximum and the minimum amount one can have in their forex accounts. Just like that, in Africa, you’re only allowed to trade forex for yourself and not for others.  

Regulatory bodies in Africa

Currently, in Africa, only some countries are secured by regulatory bodies to reduce forex trading risks. This includes South Africa, Kenya, and Mauritius. 

South African financial activities are regulated by the Financial Sector Conduct Authority (FSCA). Professionals under this financial institution are responsible for both market conduct regulation and its thorough supervision. They also ensure that the forex brokers are trustworthy and compliant with the financial sector law. 

In Kenya, on the other hand, things are regulated by the Capital Markets Authority. A forex broker should be licensed by CMA to start with their forex trading business. CMA is a government-licensed authority that’s responsible for handling, regulating, and promoting capital market development in Kenya. It also handles market intermediaries like the stock exchange and other individuals who are licensed under the Capital Markets Act of Kenya.

Just like that, Mauritius also has several rules and regulations on financial services, insurance laws, and securities. In Mauritius, it’s all regulated by the Financial Services Commission or FSC. FSC is responsible for supervising and regulating all non-bank financial markets in the country. 

Takeaway

So, is trading legal in Africa? Yes, it is. However, there are regulations and exceptions associated with it.

To practise forex trading in Africa, you must choose a reliable, professional, and licensed forex broker. In addition, make sure to check for other crucial aspects of the forex broker, like its reputation, account features, and currency pairs, for the best results.