CBN, NCC Order Banks to Settle N250bn USSD Debt

The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have directed banks to clear an outstanding debt of N250 billion owed to telecom operators for Unstructured Supplementary Service Data (USSD) services. The regulators have set stringent deadlines for compliance, amid a notable decline in the usage of USSD for financial transactions.

USSD transactions have experienced a sharp drop, with customers increasingly opting for internet banking. From January to June 2024, the volume of USSD transactions plummeted by 150.18%, from 630.6 million in 2023 to 252.06 million. The transaction value also saw a decrease of 54.75%, from N4.84 trillion to N2.19 trillion.

In a memo issued on December 20, both the CBN and NCC outlined a roadmap to resolve the long-standing debt issue that has strained the relationship between banks and telecom companies.

Under the new directive, banks are required to settle 85% of invoices dating back to February 2022 by December 31, 2024. Additionally, 85% of any new invoices must be paid within a month of receipt. A plan to address debts accrued before February 2022 must be finalized by January 2, 2025, with full repayment due by July 2, 2025.

The updated framework also includes a billing reform that ensures telecom operators will no longer charge for USSD sessions lasting less than 10 seconds. Banks that fail to comply with these new rules may face penalties, including fines and operational restrictions.

Gbenga Adebayo, Chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON), criticized the banks for their reluctance to settle the growing debt, which now exceeds N200 billion. He rejected the idea of writing off the debt as bad debt, stressing its detrimental impact on the telecom industry.

“This debt will not be forgiven. It must be paid in full, and we are prepared to disconnect defaulting banks if necessary,” Adebayo stated. He also highlighted the negative impact of fluctuating foreign exchange rates, which would further increase the debt burden. Despite ongoing discussions, Adebayo expressed disappointment over the lack of significant progress in resolving the issue.