The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC), as part of their regulatory functions under the Federal Government of Nigeria, have issued a decisive directive to resolve the protracted ₦250 billion Unstructured Supplementary Service Data (USSD) debt dispute involving Deposit Money Banks (DMBs) and Mobile Network Operators (MNOs). This directive represents a comprehensive approach to ensuring financial obligations are met and operational challenges within the USSD service framework are resolved.
The directive was outlined in a joint circular dated December 20, 2024, and signed by Oladimeji Taiwo, Acting Director of Payments System Management at the CBN, and Chizua Whyte, Head of Legal and Regulatory Services at the NCC. This circular, obtained exclusively by Punch Online, outlines clear repayment terms and operational adjustments designed to stabilize both the banking and telecommunications sectors.
The document provides a detailed structured repayment plan for the settlement of outstanding USSD debts, along with the introduction of revised operational guidelines for these critical services.
Key Provisions of the Directive
The circular specifies two major categories of debts—those accrued before February 2022 and those accumulated afterward—each with tailored settlement arrangements.
Pre-February 2022 DebtsDMBs must settle 60% of all debts incurred before the implementation of Application Programming Interfaces (APIs) in February 2022. This payment will serve as a full and final settlement for these older debts.
Banks can choose between a lump sum payment or an installment plan, with agreements to be finalized by January 2, 2025. Full payment is expected no later than July 2, 2025.
Post-February 2022 Debts
For debts accumulated after February 2022, banks are required to pay 85% of all outstanding invoices by December 31, 2024.
All future invoices must also be settled at an 85% rate within one month of issuance.
Litigation and Compliance
To streamline the process and promote resolution, all legal disputes related to USSD debt must be discontinued immediately.
Non-compliance with these directives will attract severe sanctions from both the CBN and NCC.
“In light of the above, the CBN and NCC direct all DMBs and MNOs to comply strictly with the payment terms to achieve a final resolution of this matter. Failure to comply will result in sanctions,” the circular emphasized.
Transition to End-User Billing (EUB)
The directive further mandates a shift to End-User Billing (EUB) for USSD services for all banks and telcos that meet the payment conditions. This new billing structure is intended to ensure transparency and fairness in service charges. While the transition to EUB is being implemented, operators are required to adhere to the “10-second rule,” which states that USSD sessions lasting less than 10 seconds will not incur charges.
Additionally, banks employing prepaid billing systems may migrate to the EUB model upon securing regulatory approval from the CBN and NCC.
Implications and Background
The ₦250 billion USSD debt has been a major source of contention between the banking and telecommunications industries for years. This crisis has led to strained relationships and threatened the continuity of USSD services, which are a lifeline for financial inclusion in Nigeria, particularly in rural areas where smartphone penetration and internet access remain low.
USSD services facilitate essential mobile banking functions, including airtime purchases, bill payments, and balance inquiries. However, the inability of banks to settle outstanding debts has prompted telecom operators to consider suspending USSD services, further exacerbating the financial inclusion gap.
According to Gbenga Adebayo, Chairman of the Association of Licensed Telecom Operators of Nigeria, some smaller banks have already begun making repayments in installments. However, major financial institutions, which account for the majority of the debt, have made little progress. “Some repayments have been recorded, but they are far below expectations,” Adebayo told Punch in November.
The CBN and NCC have underscored that their directive aims to stabilize both sectors, ensuring that USSD services remain available to Nigerians and promoting a sustainable framework for future operations.
Conclusion
By addressing the root causes of the debt crisis and implementing structured repayment plans, the Federal Government hopes to foster a collaborative relationship between banks and telecom operators. This initiative not only aims to resolve the immediate financial dispute but also seeks to create a more efficient and transparent system for delivering USSD services nationwide.
