Banks must settle ₦212.5 billion USSD debt to telcos by year-end

The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have ordered banks to pay ₦212.5 billion—85% of a ₦250 billion debt owed to telecom operators for USSD charges—by December 31, 2024. The December 20 memo, obtained by TechCabal, comes after years of delays and disputes over USSD payments, which have led to the growing debt.

Despite regulatory mandates requiring banks to collect and remit the USSD fees since 2021, many banks have resisted. They argue that the charges are unfair and that USSD technology is outdated. 

Segun Agbaje, CEO of GTCO, stated, “If you want to charge ₦20 for the service, go ahead. But collect it yourself. Don’t come to us.” Similar concerns were raised by the late Herbert Wigwe, who questioned how telcos determine the fees, arguing that USSD is an outdated technology that will soon become obsolete.

These sentiments, widely shared among Nigerian bank executives, have contributed to the growth of the USSD debt despite previous regulatory efforts. As of November 2024, telecom operators claim banks owe ₦250 billion for USSD services.

The December 20 directive seeks to expedite debt settlement and enforce strict payment timelines. Under the new rules, banks must pay 85% of new invoices within one month of receipt. Additionally, 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 with the directive will lead to sanctions, including fines, operational restrictions, or other regulatory actions designed to enforce compliance.

There are also incentives for banks to pay on time. If banks meet specified payment milestones, the NCC will begin the transition to End-user Billing (EUB), where customers—rather than the banks—would directly pay for USSD services. End-user billing is considered the long-term solution to the payment dispute but will only be available to compliant parties.