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The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have directed banks to pay $275 million—85% of a $324 million debt owed to telecom operators for USSD charges—by December 31, 2024.
A December 20 memo obtained by TechCabal reveals that the mandate follows years of disputes and delays over USSD payments, which have resulted in a growing debt.
Since 2021, regulatory mandates have required banks to collect and remit USSD fees, but many banks have resisted, arguing that the charges are unfair and that USSD technology is outdated.
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Segun Agbaje, CEO of GTCO, expressed frustration with the current system, stating, “If you want to charge $0.03 for the service, go ahead. But collect it yourself. Don’t come to us.” Similar concerns were echoed by the late Herbert Wigwe, who questioned the telcos’ fee structure and argued that USSD technology would soon become obsolete.
These concerns, widely shared by Nigerian bank executives, have contributed to the persistent debt. As of November 2024, telecom operators claim banks owe $324 million for USSD services.
The December 20 directive aims to expedite the debt settlement process and enforce stricter payment timelines. Key provisions include:
- Banks must pay 85% of new invoices within one month of receipt.
- By January 2, 2025, banks and telecom operators must agree on a payment plan to settle 60% of all outstanding invoices before using any telco’s USSD platform.
Failure to comply will result in sanctions, including fines, operational restrictions, or other regulatory actions.
The memo also offers incentives for banks to meet payment deadlines. If banks comply with specified milestones, the NCC will transition to an end-user billing (EUB) model. Under EUB, customers—rather than banks—will pay directly for USSD services, a solution long considered to be the resolution to the ongoing payment disputes.
This directive marks a decisive step in addressing the protracted USSD payment crisis. While end-user billing may resolve the issue in the long term, the immediate focus remains on ensuring compliance to settle the existing debt and restore stability in the relationship between banks and telecom operators.
As the December 31, 2024, deadline approaches, the spotlight is on the banks to honour their obligations and on the regulators to enforce the new measures effectively.
