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CBN, NCC Enforce ₦212.5 Billion USSD Debt Repayment

The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have instructed banks to pay ₦212.5 billion, representing 85% of a ₦250 billion debt owed to telecom operators for USSD charges, by December 31, 2024. This directive, issued in a December 20 memo obtained by TechCabal, follows years of delays and disputes over USSD payments, which have contributed to the accumulation of the debt.

Although regulatory mandates have required banks to collect and remit USSD fees since 2021, many banks have pushed back. They contend that the charges are unjust and that USSD technology is obsolete.

Segun Agbaje, CEO of GTCO , expressed, “If you want to charge ₦20 for the service, go ahead. But collect it yourself. Don’t come to us.” The late Herbert Wigwe also raised similar concerns, questioning how telecom companies set the fees and arguing that USSD technology is outdated and will soon be phased out.

These views, commonly held by Nigerian bank executives, have fueled the rise of the USSD debt, despite prior regulatory efforts. As of November 2024, telecom operators assert that banks owe ₦250 billion for USSD services.

The directive issued on December 20 aims to accelerate debt repayment and impose rigid payment deadlines. According to the new regulations, banks are required to settle 85% of new invoices within a month of receiving them. Furthermore, by January 2, 2025, banks and telecom operators must finalize a payment plan to clear 60% of all pending invoices before utilizing any telecom operator’s USSD platform.

Non-compliance with the directive will result in penalties, which may include fines, operational limitations, or other regulatory measures aimed at ensuring adherence.

Banks that adhere to the payment deadlines will be eligible for incentives. If they meet the specified milestones, the NCC will initiate the shift to End-user Billing (EUB), where customers, not banks, will directly pay for USSD services. EUB is seen as the ultimate solution to the payment conflict, but it will only be accessible to parties that comply with the regulations.

SOURCE

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Written by Grace Ashiru

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