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Published On: Thu, Nov 30th, 2017

Forex – Potential Solution To Financial Instability In Africa

Most African countries struggle with financial instability as well as the strength of their currencies being in a state of unrest, and due to the slow development of Africa as a whole, it then becomes increasingly difficult to maintain and adhere to the standard set by developed countries. The direction is simple, Africa as a whole has to reach a level where 80 percent of the population is financially stable and secure. Many factors contribute to this phenomenon,one being the poverty affecting African countries, this is a clamorous issue that is hindering the vision of a new path for Africa. The effects of poverty dictate that the poor remain poor and the rich grow in wealth and those in the middle never seem to advance, these limitations curb any growth whatsoever and they ensure a stagnant economy and subsequently the country`s financial growth remaining in a state no forward motion.

The Forex market – This is the biggest financial institution in the world, Forex Transactions are worth 5.5 trillion dollars on a daily basis compared to the mere 76 billion dollars of the NYSE.There is no central exchange, this meaning that currencies are traded by a global network of banks, dealers and brokers thus ultimately meaning that Forex can be traded at any time, day or night, Monday to Friday. this is all thanks to the strides made in technology,real-time information and platforms to study markets are readily available for anyone who has a laptop and an internet connection. Most people who teach trading markets usually detail that it takes close to a month to semi understand the markets and be in a position to start accumulating funds and this could also be introduced to universities as a course of study. Imagine a country where everyone can accumulate funds and are financially able to purchase goods and services that amount to betterment of each household. If the Forex market offers transactions worth trillions in a day, and with most people in the country well versed on Forex, then the country`s economy would be able to grow much quicker. The country`s economy would have more monetary resources to invest on a variety of the country developmental projects.

For instance a country Like South Africa where the unemployment rate is a high 27%, compared to the 4.5% of the United kingdom (a much developed country, more graduates are entering the realisation that employment is a scarce commodity). If Forex is introduced and it becomes accelerated success then the influx of money would in turn encourage more and more young people to create businesses that will create employment and with an increasing employment rate the country would be one step closer to being fully developed. Forex would ensure the financial sustainability of businesses and individuals within the country and the secondary objective would be that all the money generated by the country can be used to battle the issues the country is facing. A country like Kenya is in desperate need of basic livelihood necessities, if Forex is successfully implemented then the necessities can be purchased from other countries or local production can be supported through the economic.

Most African countries are trailing behind in terms of technological advancement and since this world has gotten digital and the countries that bravely embraced this path have become fully developed and the further down they venture on this technological path the more they branch out into different industries like medicine, farming, production, creative arts, health etc. This is the path that African countries can invest on, be it through the purchase of innovative technology from much more developed countries or the investment into much advanced and sustainable education, that will in turn benefit the country in the long run. This is also on the basis that they pursue trading Forex as a successful strategy to ensure financial sustainability. Although Forex may seem lucrative and highly profitable, it also demands hard work and dedication from those in pursuit of a better life because without those values, it is also much easier to incur huge losses in the markets causing a lot more people to shy away.

Africa as a whole has been disadvantaged for thousands of years and its up to the generation that eventually realises that blaming the world will not help us, its up to us to start pursuing profitable strategies that will help us as a continent. Forex can really help us out of the financial instability we are on, its a lifeline for each country and its people, imagine the possibilities if Africa as a whole was developed, with all the natural resources mined and produced in Africa, thus limiting the wealth from leaving the Africa. Africa would be a continent of peace and hope. Africa will be a beautiful place of financial freedom and much of our culture would be preserved, Forex is the manifestation of that vision.

By Kukhanya Chikomo

 

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