Following the series of controversy trailing the legitimacy of Forex trading in Nigeria, Mr Akanni Oluwadamilare, a forex expert and the Chief Executive Officer of Skyinflow Limited, in this interview with ADEOLA OTEMADE, speaks on the need for more people to go into forex trading.
FOLLOWING the series of controversies on the legitimacy of forex trading, do you think you are into a legitimate business?
Yes we are. When it comes to forex trading in other countries, it is legalised. In fact, banks trade forex, higher institutions, pension firms trade on forex. Let me just say banks, government higher institutional companies are the major players in the forex exchange market. So, definitely, it’s a legal business.
Forex trading is considered a volatile venture which can make one go bankrupt over night. How have you been able to sustain the business?
The likes of George Soros grew wealth from trading currencies which we call forex and equity trading. Forex and equity are highly volatile. What we do is that we do an overview of the trend and we make use of minimal loss side and our risk management is very sure. What we do is, we consider our risk to reward ratio and make sure the reward ratio is much higher than our risk ratio.
Are you saying the reward you give out to people is more than your risk?
Yes we focus more on the reward we give out. We put all strategies in place to have minimised loss and to reduce risk level. As forex traders, we diversify, we never put our entire purse into the trading account, and if we have to put all our money into the trading account, we spread it across all accounts. If one is not going well, we have to move to the other one. And we also diversify into other businesses like real estate and agriculture.
We talked about the legitimacy of forex trading, in which we have banks and governments trading with currencies. How come Nigeria is still where it is if other countries are into foreign exchange trade?
There are lots of things we need to put in place in Nigeria. Our system is not transparent enough; government policies jeopardise businesses. In countries like Australia and South Africa, they are given free hand to be able to trade the market conveniently. That’s why you see their economies performing better.
We have a high rate of poverty in Nigeria. Why don’t the government come to think of it and look at what other countries are doing that make them better off. Donald Trump is one of the best forex traders I know. Our country has never condoned such a thing. All the government knows is to deprive citizens of their right. They never invested in human capital development. They are yet to see the light of the opportunity to delve into what we call forex trading. We don’t have enough technology. Most of the tools I use are from other countries like Russia. I have a friend from China that sends us tools. We have a lot to learn from other countries. Some other countries have legalised crypto currency. In most of the transactions, you have to pay in Bitcoin. But in Nigeria, we are yet to see that light, and everything is going digital.
Foreign exchange is not just a platform for trading currencies, but a platform to trade commodities like cocoa, cotton, sugar and gold.
We trade stock. In the US, they have what they call DOJO. It’s just a group of 30 company stocks. But Nigeria has not given us that kind of platform. In fact, our NSE oil share investable should be on the foreign exchange market to be traded in terms of finance. And maybe because the people we have been bringing on board to be our finance persons are not too qualified. It’s just by appointment. We have a lot of things to put in place. We have a low level of literacy in the country when it comes to Information Technology and our curriculum is not helping matters.
In other countries, they make use of this foreign exchange to teach, talk about stocks, how to analyse stock, how to analyse every financial market. And one of the financial markets that I know will contain everybody is this forex trading but we have little knowledge about it. It is devastating in our country and the government is not seeing the light of this.
How would you describe the impact of forex trading on the economy?
The foreign exchange market has given us an avenue to trade among ourselves. Without the foreign exchange market, there would be nothing like trading between countries and trading between countries is what they call foreign exchange, because you have to exchange currencies, bring your naira, I send you some dollars.
So the impact of foreign exchange on the economy is numerous. One, you would not be operating under a closed economy anymore. What we are suffering from in our country is that we are yet to see other sources of revenue rather than oil. Another thing is that foreign exchange market will create more job opportunities for the unemployed. I have friends that have based their lives on forex trading. They source their bills from it. Those that would run it as an investment will run it as an investment and those that will run it as an academy will run it as an academy. It creates more job opportunities for people. The circulation of money in the economy will be high. Foreign exchange will warrant us to be importing and exporting. Most of the things we use in Nigeria are imported, and no country can operate as an Island, that’s why there is a need for the foreign exchange market.
Online business boomed during the coronavirus-induced pandemic period. How has the forex exchange market been affected?
The pandemic opened the eyes of many to the fact that without going to work they can still live, they can still survive and still eat their normal meals. Lots of people delved into investments and it opened people’s eyes that investing is very profitable. Lots of people stopped going to work, salary stopped, some were sacked, pay cut and all; so a lot of people used that opportunity to try going to forex trading and I can tell you that during that period, we had quite a large number of investors. So, the pandemic really made people see the light of investing.
Nigeria recently celebrated 60 years of independence, what’s your take on the current situation of the economy of the country?
The state of the country is disheartening and one issue that has been over flogged is that people in the past have expressed their worries and fears over the state of the country and yet nothing is working. The masses are suffering, it doesn’t even look like we are 60 yet. In a country where there is inflation at its peak, insecurity, unemployment; the margin between the rich and the poor is so much, celebrating 60 should be a moment of sober reflection. I check economic data every day. If we are not careful, we might be seeing another recession and I think the government should look for a way to balance the economy. We are in serious debt, and our national debt profile is high. The masses are suffering and yet nothing is being done. The way forward for the government is to empower people. The government should invest in people, they should create more jobs, human capital development is one of the weapons we can use, we should invest in people. We no longer have sufficient sources of revenue, that’s why the government increased tax, since they are now generating revenue from the masses by increasing tax. So the government needs to find a way to balance the economy and be more transparent in their dealing with the masses.
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