Deposit Money Banks and Mobile Network Operators have received a definitive mandate from the Nigerian Communications Commission and the Central Bank of Nigeria to settle the long-running N250 billion Unstructured Supplementary Service Data debt dispute.
Both the CBN and the NCC are federal government regulatory entities.
Oladimeji Taiwo, the acting director of payments system management at the CBN, and Chizua Whyte, the head of legal and regulatory services at the NCC, signed the directive, which was contained in a joint circular dated December 20, 2024.
Our correspondent was the only one to get the document, which included new operational instructions for USSD services as well as a structured payment plan for debt settlement.
The directive stipulates that a full and final settlement of 60% of all obligations incurred prior to the deployment of Application Programming Interfaces in February 2022 must be made.
Complete settlement is required on July 2, 2025, and payment agreements, whether in installments or lump amounts, must be concluded by January 2, 2025.
The CBN and NCC required banks to pay 85% of all outstanding invoices by December 31, 2024, for debts originating after February 2022, and to make sure that 85% of future invoices are paid within a month of issuance.
Additionally, the regulators warned that non-compliance would result in severe penalties and ordered both parties to stop all ongoing litigation pertaining to the USSD debt issue.
“In light of the foregoing, the CBN and NCC hereby direct that all DMBs and MNOs must adhere to the stipulated payment terms to achieve a final resolution of this problem. Sanctions will be applied for noncompliance,” the circular said.
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 damaged ties 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-user 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.
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 apparently started making payments in installments, tier-one lenders, who bear the majority of the debt, have not yet made any sizable payments.
In November, Adebayo told reporters, “Some repayments have been recorded, but they fall short of expectations.”