Economy
Is Forex in Nigeria Halal or Haram? Case Study
The Muslim population in Nigeria is still expanding. According to estimates, 80–85 million Nigerians (approximately 50% of the population) identify as Muslims, many of whom are probably Sunnis (60 million). Any Nigerian citizen, regardless of religion, can trade forex using Nigerian brokers as long as they are using their own money. However, every individual has to follow their own religious laws to ensure they are trading within the guidelines.
In this article, we are going to try and answer the question, is forex in Nigeria Halal or Haram? Let’s jump right into it.
Forex Trading According to Islam
The mere exchange of currencies is legal as long as traders follow certain guidelines. Additionally, it is legal for Muslim traders to turn a profit when exchanging money. However, the forex market involves more than just exchanging currencies. It also entails making and carrying out various contracts when employing futures, options, interest trading, and other activities. Some people think that the fundamentals of forex trading are consistent with Islamic teachings, while others think they are in opposition to them.
Experts and academics disagree on whether trading in the forex market is halal (permissible) or haram (forbidden) in Islam. Islamic financial rules place a strong emphasis on avoiding interest (riba) and conducting morally and fairly. Under Islamic law, whether trading in foreign exchange is permitted in Nigeria or anywhere else depends on a number of variables, including the particular trading procedures and objectives. Let’s discuss some of the guidelines that determine how Muslim traders should conduct themselves in the market.
Regarding Interest (Riba)
Interest-based transactions are absolutely forbidden in Islamic finance. In traditional Forex trading, overnight-held positions (swap or rollover fees) may be subject to interest charges or earnings. This feature of forex trading can be in violation of Islamic teachings. Also, leveraged trading accounts constantly use an interest component which can render transactions Haram. But investors can utilize Islamic accounts that do not charge overnight fees. These accounts are tailor-made for Muslim traders to ensure they do not break religious laws when transacting.
Speculation and Gambling
Excessive speculation and actions that resemble gambling are discouraged in Islamic finance. Forex trading becomes unlawful if thought to include excessive speculation or is similar to gambling. To maximize the chances of profiting, investors employ a range of tactics to forecast market movement. They observe how the value of various currencies fluctuates without really owning, purchasing, or trading the currency they are speculating on. This raises concerns about whether trading in the foreign exchange market is legal or not.
In reality, the majority of traders are gambling rather than trading. You are gambling if you place trades before determining whether your approach or strategy is lucrative or if you risk real money before determining whether you are a consistently profitable trader. A trader is not gambling because they are aware that, despite occasional setbacks, they will ultimately turn a profit. As long as Muslim traders do not gamble in the process of trading, their activities are within religious guidelines.
Ethical Business Conduct
Islamic finance promotes transactions that are both financially beneficial and have a positive social impact, stressing honest and ethical business practices. If a trader engaged in dishonest or unethical tactics when trading, then they are in violation of Islamic principles. Making money through trading is acceptable in Islam as long as it is done in conformity with Islamic law. Interest charging, referred to as usury, or riba, is exploitative and unfair according to Islamic laws. Muslim traders must conduct themselves ethically, otherwise, their activities would be considered Haram.
What is an Islamic account?
These days, a lot of brokers provide accounts for Islamic forex traders. An Islamic account is a swap-free account that doesn’t charge Muslim traders any overnight fees or swaps. Additionally, they guarantee that financial transactions are completed as quickly as possible. These accounts are made for Muslim investors who want to trade currencies without breaking Islamic laws against interest and excessive uncertainty. An Islamic account also permits keeping positions open for an unlimited period of time, which is consistent with the Islamic concept of avoiding unnecessary uncertainty.
Closing Remarks
Given the factors discussed, some academics and professionals in the Islamic financial sector think that certain types of Forex trading can be regarded as halal if they follow Islamic norms. For instance, some contend that spot Forex trading that doesn’t involve overnight positions (swaps) may be more consistent with Islamic values. For the most part, it seems that forex trading is Halal as long as a Muslim trader uses an Islamic account.
It’s crucial to remember that there isn’t a single, widely accepted position on this matter, and interpretations can differ. Individuals interested in Forex trading in Nigeria should consult certified Islamic scholars or financial specialists who are knowledgeable about both Forex trading practices and Islamic finance principles in order to make an informed conclusion. They can offer advice based on your unique circumstances and trading methods to establish whether a given Forex trading strategy is permitted or prohibited by Islamic law.
By Adedapo Adesanya
The World Bank has approved a $500 million facility for Nigeria to expand longer-term lending to small and medium sized businesses.
Approved under the Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) project, the package comprises a $400 million International Bank for Reconstruction and Development (IBRD) loan and a $100 million International Development Association (IDA) credit. Both IBRD and IDA are members of the World Bank Group.
The scheme will be implemented by the Development Bank of Nigeria (DBN), with credit guarantees provided through DBN’s subsidiary, Impact Credit Guarantee Limited (ICGL).
FINCLUDE is designed to address constraints faced by micro, small, and medium enterprises (MSMEs) in Nigeria which despite accounting for most businesses and nearly half of gross domestic product (GDP) face long-standing barriers to formal finance.
Fewer than one in 20 MSMEs have access to bank credit; loans are often short-term and costly; and collateral requirements exclude many viable firms. Women-led enterprises, which make up a substantial portion of MSMEs, are disproportionately affected, facing higher rejection rates and limited tailored products. Agribusinesses, central to food security and rural livelihoods, similarly struggle to obtain more extended‑tenor financing for equipment, processing, storage, and logistics.
However, FINCLUDE seeks to address these constraints by expanding access to affordable, longer-term finance and tailored solutions for segments with the most significant development impact.
Speaking on this, the World Bank Country Director for Nigeria, Mr Mathew Verghis, said, “FINCLUDE is about jobs, opportunity, and inclusion. By expanding access to finance for viable MSMEs—particularly women-led firms and agribusinesses—Nigeria can accelerate growth and deliver tangible benefits across communities nationwide.
“The project will make it easier for deserving small businesses to get the finance they need to grow and hire workers. With better support for lenders that practice inclusive finance and fairer, longer-term loans for entrepreneurs, we are backing the people who power Nigeria’s economy—especially women and those in agriculture.”
The FINCLUDE project will help to mobilise private investment and expand access to and usage of inclusive, innovative financial products for MSMEs nationwide.
Through DBN, the operation will strengthen the capacity of banks, including microfinance banks and non-bank financial institutions such as financial technologies (fintechs), to provide larger loans with more reasonable repayment periods, and—through ICGL—will scale partial credit guarantees so that lenders can extend credit to businesses they might otherwise consider too risky.
Targeted technical assistance will modernise loan appraisal by leveraging AI-enabled digital platforms to accelerate decision-making, improve data quality, strengthen impact measurement, and build capacity for both MSMEs and participating financial institutions.
According to the World Bank, a strong emphasis on inclusion will ensure that women-led businesses and agribusinesses benefit from these improvements.
Also commenting, Task Team Leader for FINCLUDE, Mrs Hadija Kamayo, said, “FINCLUDE will help to mobilize approximately $1.89 billion in private capital, expand debt financing to 250,000 MSMEs—including at least 150,000 women-led businesses and 100,000 agribusinesses—and issue up to $800 million in guarantees to catalyse lending.
“By extending the average maturity of MSME loans to about three years, it will help firms invest in equipment, factories, staff, and productivity, translating finance into jobs and growth.”
By Dipo Olowookere
The local stock market firmed up by 1.13 per cent on Friday as appetite for Nigerian stocks remained strong.
Investors reacted well to the 2026 budget presentation of President Bola Tinubu to the National Assembly yesterday, especially because of the more realistic crude oil benchmark of $64 per barrel compared with the ambitious $75 per barrel for 2025. This year, prices have been between $60 and $65 per barrel.
Business Post observed profit-taking in the commodity and energy sectors as they respectively shed 0.14 per cent and 0.03 per cent.
But, bargain-hunting in the others sustained the positive run, with the consumer goods index up by 3.82 per cent.
Further, the industrial goods space appreciated by 1.46 per cent, the banking counter improved by 0.08 per cent, and the insurance industry gained 0.04 per cent.
As a result, the All-Share Index (ASI) increased by 1,694.33 points to 152,057.38 points from 150,363.05 points and the market capitalisation chalked up N1.080 trillion to finish at N96.937 trillion compared with Thursday’s closing value of N95.857 trillion.
A total of 34 shares ended on the advancers’ chart, while 24 were on the laggards’ log, representing a positive market breadth index and bullish investor sentiment.
Austin Laz gained 10.00 per cent to close at N2.42, Union Dicon also jumped 10.00 per cent to N6.60, Tantalizers increased by 9.80 per cent to N2.69, Aluminium Extrusion improved by 9.78 per cent to N12.35, and Champion Breweries grew by 9.71 per cent to N16.95.
Conversely, Sovereign Trust Insurance dipped by 7.42 per cent to N3.87, Royal Exchange lost 6.84 per cent to trade at N1.77, Omatek slipped by 6.84 per cent to N1.09, Eunisell depreciated by 5.88 per cent to N80.00, and Eterna dropped 5.63 per cent to close at N28.50.
Yesterday, traders transacted 1.5 billion units worth N21.8 billion in 25,667 deals compared with the 839.8 million units sold for N32.8 billion in 23,211 deals in the preceding session, showing a surge in the trading volume by 76.61 per cent, an uptick in the number of deals by 10.58 per cent, and a shrink in the trading value by 33.54 per cent.
By Adedapo Adesanya
Three stocks stretched the bearish run of the NASD Over-the-Counter (OTC) Securities Exchange by 1.21 per cent on Friday, December 19, with the market capitalisation giving up N26.01 billion to close at N2.121 billion compared with the N2.147 trillion it ended a day earlier, and the NASD Unlisted Security Index (NSI) dropping 43.47 points to 3,546.41 points from 3,589.88 points.
The trio of FrieslandCampina Wamco Nigeria Plc, Central Securities Clearing System (CSCS) Plc, and NASD Plc overpowered the gains printed by four other securities.
FrieslandCampina Wamco Nigeria Plc lost N6.00 to sell at N54.00 per unit versus N60.00 per unit, NASD Plc shrank by N3.50 to N58.50 per share from N55.00 per share, and CSCS Plc depleted by N2.91 to N33.87 per unit from N36.78 per unit.
On the flip side, Air Liquide Plc gained N1.01 to close at N13.00 per share versus N11.99 per share, Golden Capital Plc appreciated by 70 Kobo to N7.68 per unit from N6.98 per unit, Geo-Fluids Plc added 39 Kobo to sell at N5.50 per share versus N5.11 per share, and IPWA Plc rose by 8 Kobo to 85 Kobo per unit from 77 Kobo per unit.
During the trading day, market participants traded 1.9 million securities versus the previous day’s 30.5 million securities showing a decline of 49.3 per cent. The value of trades went down by 64.3 per cent to N80.3 million from N225.1 million, but the number of deals jumped by 32.1 per cent to 37 deals from 28 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc finished the session as the most active stock by value on a year-to-date basis with 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units traded for N4.9 billion.
The most active stock by volume on a year-to-date basis was still InfraCredit Plc with 5.8 billion units worth N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.
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