The Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) have ordered Deposit Money Banks and Mobile Network Operators to settle the long-running N250 billion Unstructured Supplementary Service Data debt dispute.
CBN and NCC are regulatory agencies under the Federal Government of Nigeria. CBN regulates the banking sector while NCC regulates the telecom industry.
Chizua Whyte, the Head of Legal and Regulatory Services at the NCC, and Oladimeji Taiwo, the acting Director of Payments System Management at the CBN, signed the directive, which was contained in a joint circular dated December 20, 2024.
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Structured payment plan for debt repayment
The document presented new operational parameters for USSD services and provided a structured payment plan for debt repayment.
As per the directive, a complete and final settlement of 60 percent of all obligations incurred before the deployment of Application Programming Interfaces in February 2022 must be made.
The finalisation of payment agreements, whether in instalments or lump amounts, must occur by January 2, 2025, and full settlement is required by July 2, 2025.
Banks were required by the CBN and NCC to pay 85 percent of all outstanding invoices by December 31, 2024, for debts originating after February 2022, and to make sure that 85 percent of future invoices are paid within a month of their generation.
Non-compliance to result in severe penalties
By warning that non-compliance would result in severe penalties, the regulators also ordered both parties to stop all ongoing legal actions about the USSD debt issue.
“In view of the foregoing, the CBN and NCC hereby direct that all DMBs and MNOs adhere strictly to the outlined payment terms to ensure final resolution of this matter. Failure to comply will result in sanctions,” the circular stated.
The decision was made in response to growing pressure from telecom operators, who had previously demanded a transparent payment plan to settle the debt, which had resulted in tension between the banking and telecom industries.
The regulators also stressed that only banks and telcos who fulfil the specified payment requirements will be subject to the shift to end-users paying for USSD services.
Operators must enforce a “10-second rule” to ensure that sessions lasting less than 10 seconds are not invoiced while this transition is underway.
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Actions to promote stability in the banking and telecom sectors
The circular further emphasised that, with regulatory approval, institutions that now use prepaid billing systems have the option to switch to EUB. The actions are intended to promote stability in the banking and telecommunications sectors while guaranteeing the continuous availability of USSD services for Nigerians, the CBN and NCC said, reaffirming their commitment to ending the debt crisis.
USSD is essential for financial inclusion in Nigeria, especially in rural areas with low internet connection and smartphone usage. In addition to being utilised for services like bill payment, airtime top-ups, and other telecom services, banks mostly rely on it for mobile banking services.
Telecom companies have threatened to stop USSD services unless payments are made, and the debt crisis has continued for years.
Gbenga Adebayo, the Chairman of the Association of Licensed Telecom Operators of Nigeria, claims that although smaller banks have started making payments in instalments, tier-one lenders, who bear the majority of the debt, have not yet made any sizable payments.
Last month, Adebayo stated, “Repayments have been recorded, but they fall short of expectations.”