Nigerian Regulators Demand Resolution to N250bn USSD Debt Crisis
The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have issued a final directive to resolve the longstanding N250bn Unstructured Supplementary Service Data (USSD) debt dispute between Deposit Money Banks (DMBs) and Mobile Network Operators (MNOs).
In a joint circular dated December 20, 2024, obtained exclusively by The Guardian, the regulatory agencies outlined a structured payment plan to address the debt impasse, which has strained relations between Nigeria’s financial and telecommunications sectors for years.
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, the directive also introduced fresh operational guidelines for USSD services, marking a significant intervention in the protracted crisis.
Debt Settlement Timeline
Under the new terms, 60 per cent of all debts incurred before the implementation of Application Programming Interfaces (APIs) in February 2022 must be paid as full and final settlement. Payment agreements, whether in lump sums or instalments, must be finalised by January 2, 2025, with full settlement due by July 2, 2025.
For post-February 2022 debts, the regulators have mandated that banks pay 85 per cent of all outstanding invoices by December 31, 2024, and ensure future invoices are settled at the same rate within one month of issuance. Both parties are required to cease all ongoing litigation related to the USSD debt, with stiff sanctions promised for non-compliance.
“10-Seconds Rule” and End-User Billing
In addition to resolving the debt, the circular addressed operational practices for USSD services. Regulators mandated the implementation of a “10-seconds rule,” stipulating that sessions shorter than 10 seconds should not incur charges. Furthermore, banks using prepaid billing systems were given the option to migrate to end-user billing (EUB), subject to regulatory approval, provided they meet payment obligations.
The transition to EUB, which would shift costs to end-users, remains conditional on banks and telcos adhering to the payment framework outlined in the directive.
Impact on Financial and Telecom Sectors
USSD services play a critical role in financial inclusion across Nigeria, particularly in rural areas with limited smartphone penetration and internet access. Banks depend heavily on the service for mobile banking operations, including fund transfers, airtime top-ups, and bill payments.
However, the unresolved debt has led to threats from telecom operators to suspend USSD services, raising concerns about service disruptions. Smaller banks have reportedly begun settling their obligations, but tier-one lenders, responsible for the majority of the debt, are yet to make significant payments, according to Gbenga Adebayo, Chairman of the Association of Licensed Telecom Operators of Nigeria.
A Path to Stability
The CBN and NCC emphasized that the directive aims to restore stability to both sectors, ensuring the continued availability of USSD services for millions of Nigerians. “In view of the foregoing, the CBN and NCC hereby direct that all DMBs and MNOs adhere strictly to the outlined payment terms to ensure final resolution of this matter. Failure to comply will result in sanctions,” the circular warned.
With a final deadline set for July 2025, the onus is now on the banks and telecom operators to resolve the impasse, safeguarding a service critical to Nigeria’s financial ecosystem and the broader push for financial inclusion.
