Debt Row Deepens: Nigerian Regulator to Name 18 Banks Over $200m USSD Default
The Nigerian Communications Commission (NCC) is set to release the names of 18 banks that have failed to settle outstanding debts amounting to ₦200 billion for using Mobile Network Operators’ (MNOs) Unstructured Supplementary Service Data (USSD) platforms. The move signals escalating tensions in a long-standing financial dispute that could disrupt banking services for millions of Nigerians.
According to industry insiders, only four banks have complied with payment terms outlined in a joint directive issued by the Central Bank of Nigeria (CBN) and the NCC in December 2023. The directive required banks to clear 60 per cent of their pre-API (Application Programming Interfaces) invoices by January 2, 2025, with a structured repayment plan for the balance.
Pre-API invoices, which represent charges incurred before the adoption of more standardised API systems in February 2022, have been at the heart of billing disagreements between banks and telecom operators. Despite this, the majority of banks have failed to honour their obligations, prompting the telecom regulator to take decisive action.
Service Suspension Looms
In a measure expected to take effect within two weeks, the NCC is preparing to suspend USSD services for defaulting banks. This could have far-reaching consequences, particularly for unbanked and underbanked Nigerians who rely on the service for financial transactions in areas without internet access.
To mitigate the impact, the NCC’s forthcoming public statement will include instructions for affected subscribers to switch to compliant banks, ensuring continuity in accessing banking services.
The suspension threat follows mounting pressure from telecom operators, who have warned of the strain unpaid debts place on the sustainability of USSD services. “We are seeing payments from smaller players, but the big banks, which owe the most, have not been forthcoming,” said Gbenga Adebayo, Chairman of the Association of Licensed Telecom Operators of Nigeria. “We now await intervention from regulators like the CBN and NCC to resolve this impasse.”
A Critical Economic Pillar
USSD services have become indispensable to Nigeria’s financial system, enabling 252.06 million transactions worth ₦2.19 trillion between January and June 2024, according to CBN data. This represents a sharp increase from 2023’s full-year figures of ₦4.84 trillion across 630.6 million transactions.
Initially developed by telcos for basic services like airtime top-ups, USSD has been widely adopted by the banking sector due to its accessibility for users without internet connections. However, this widespread adoption has not translated into timely payments to telecom operators, leading to the current standoff.
Calls for Resolution
The banking sector’s larger players, responsible for the bulk of the debt, have yet to make significant payments. Telecom operators, despite earlier threats, have held back from suspending USSD services due to its vital role in Nigeria’s economy.
In October, telecom consultant Ejike Onyeaso underscored the banks’ obligation to adequately compensate operators for the infrastructure supporting these services. “If telecom providers follow through on their threats, it could severely disrupt banking operations,” he warned.
As the NCC prepares to go public with the names of the defaulting banks, stakeholders are watching closely to see if regulatory intervention can break the deadlock and avert a service suspension that could ripple across Nigeria’s financial ecosystem.
