CBN, NCC issue final directive to resolve N250bn USSD debt dispute

The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have issued a definitive directive aimed at resolving the long-standing ₦250 billion Unstructured Supplementary Service Data (USSD) debt dispute between Deposit Money Banks (DMBs) and Mobile Network Operators (MNOs).

The move is expected to bring stability to both the financial and telecommunications sectors, which have been at loggerheads over the issue for years.

The directive, dated December 20, 2024, was outlined in a joint circular signed by the Acting Director of Payments System Management at the CBN, Oladimeji Taiwo, and the Head of Legal and Regulatory Services at the NCC, Chizua Whyte.

The document, obtained exclusively by our correspondent, introduces a structured payment plan and operational guidelines to resolve the dispute.

The circular mandates that 60% of all debts incurred before the adoption of Application Programming Interfaces (APIs) in February 2022 must be paid as a full and final settlement.

Payment agreements, whether lump-sum or installment-based, must be finalized by January 2, 2025, with complete payment due by July 2, 2025.

For debts accrued after February 2022, the directive requires banks to pay 85% of all outstanding invoices by December 31, 2024. Additionally, future invoices must be settled within one month of issuance, with an 85% compliance rate required to avoid penalties.

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To prevent further escalation, the CBN and NCC have instructed all parties to discontinue ongoing litigation related to the USSD debt. The regulators warned that non-compliance with the directive would attract “stiff sanctions.”

“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 the final resolution of this matter. Failure to comply will result in sanctions,” the circular stated.

The regulators emphasized the transition to End-User Billing (EUB) for USSD services. However, this model will only be implemented for banks and telecom operators that comply fully with the outlined payment obligations.

Pending the transition, MNOs must implement a “10-seconds rule,” ensuring that USSD sessions lasting less than 10 seconds are not billed.

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The circular also provides an opportunity for banks using prepaid billing systems to migrate to the EUB model, subject to regulatory approval.

The directive follows sustained pressure from telecom operators, who have long demanded a clear payment framework to address the debt. Telecom operators had previously threatened to suspend USSD services, citing financial strain and non-payment by banks.

Gbenga Adebayo, Chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON), acknowledged some progress but noted that the repayments made so far, particularly by smaller banks, fall short of expectations.

“While we have seen some repayments, they are insufficient given the magnitude of the debt. The larger banks, responsible for most of the outstanding amount, need to act decisively,” Adebayo stated.

USSD services are critical for financial inclusion in Nigeria, particularly in rural areas with limited internet access and low smartphone penetration. Banks heavily rely on USSD for mobile banking services, enabling millions of Nigerians to access essential financial services such as fund transfers, airtime top-ups, and bill payments.

The prolonged debt crisis has threatened the continuity of these services, putting vulnerable communities at risk of being excluded from basic financial and telecom services.

The CBN and NCC reaffirmed their commitment to resolving the debt impasse and ensuring the availability of USSD services for all Nigerians. They described the directive as a step toward fostering stability in both sectors and promoting collaboration between banks and telecom operators.

“By resolving this long-standing issue, we aim to enhance trust and cooperation between stakeholders while ensuring uninterrupted access to USSD services, which are vital for Nigeria’s financial ecosystem,” the circular stated.

As the January 2 deadline for payment agreements approaches, industry observers are watching closely to see whether tier-one banks will comply with the directive.

With the July 2 final settlement deadline on the horizon, the success of this initiative could set a precedent for resolving similar disputes in Nigeria’s regulatory landscape.