The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have issued a directive requiring Deposit Money Banks (DMBs) to settle the protracted ₦250 billion USSD debt owed to Mobile Network Operators (MNOs).
The circular, dated December 20, 2024, highlights the issues caused by over unpaid charges for the use of USSD platforms by banks.
This debt, which has negatively impacted relations between the banking and telecommunications sectors, has continued despite previous interventions.
The circular, jointly signed by CBN’s Acting Director of Payments System Management, Oladimeji Taiwo, and NCC’s Head of Legal and Regulatory Services, Chizua Whyte, was obtained earlier this week.
Key Settlement Terms
According to the directive, banks are required to pay 60% of all outstanding invoices issued before the implementation of Application Programming Interfaces (APIs) in February 2022.
This payment, which serves as a full and final settlement of pre-API debts, must be agreed upon by January 2, 2025, with a deadline for full payment by July 2, 2025.
For debts incurred post-API implementation, DMBs must pay 85% of all outstanding invoices by December 31, 2024. Moving forward, the same percentage of any new invoices must be cleared within one month of issuance.
Shift to End-User Billing
One of the incentives for compliance is the transition to an End-User Billing (EUB) model, where customers would bear the cost of USSD services directly, removing banks from the billing process. However, this will only apply to banks and telecom operators that meet the outlined payment obligations.
Litigation to Cease
In a move to foster cooperation, the regulators have ordered an immediate halt to all legal disputes related to the USSD debt. They also announced plans for a public awareness campaign to educate Nigerians on the transition to EUB once it is implemented.
Measures for Defaulters
The circular warned that any bank or telecom operator failing to comply with the terms would face penalties, including fines and operational restrictions. This reiterates the regulators’ determination to bring stability to both sectors and ensure uninterrupted access to financial services via USSD platforms.
Impact on the Economy
The settlement of this debt dispute is expected to have a huge impact on Nigeria’s financial and telecommunications sectors. In resolving the issue, the regulators aim to promote collaboration, restore confidence, and prevent further disruptions to services that millions of Nigerians rely on daily.
