Major Nigerian banks have successfully averted a potential telecommunications crisis by making substantial payments toward their N160 billion debt for Unstructured Supplementary Service Data services, following stern warnings from regulatory authorities. This swift action has prevented a service disconnection that could have affected millions of banking customers nationwide.
The intervention came after the Nigerian Communications Commission issued a critical notice on January 15, 2024, threatening to disconnect nine prominent banks from USSD services by January 27 if they failed to address their outstanding debts accumulated since 2019. The Association of Licensed Telecommunications Operators of Nigeria’s Chairman, Gbenga Adebayo, confirmed at a recent CEO forum in Lagos that the situation has been successfully de-escalated through significant debt repayment.
These developments mark a crucial turning point in the long-standing dispute between telecommunications providers and banking institutions over USSD service charges. The affected institutions included major players such as Zenith Bank Plc, United Bank for Africa Plc, and First City Monument Bank, among others, highlighting the widespread nature of the issue across Nigeria’s banking sector.
The resolution carries particular significance given the critical role of USSD services in Nigeria’s financial ecosystem. These services provide essential banking access to millions of Nigerians who lack internet connectivity or smartphones, making them a vital component of the country’s financial inclusion strategy. A disconnection would have severely impacted these vulnerable populations and potentially disrupted significant portions of Nigeria’s digital economy.
The debt clearance initiative falls within a broader structured payment plan jointly developed by the NCC and the Central Bank of Nigeria. This comprehensive framework, outlined in a December 20, 2024 memorandum, establishes a three-phase approach to settling the total N250 billion debt. The plan sets specific milestones and deadlines for banks to meet their obligations, demonstrating a coordinated regulatory approach to resolving the issue.
Under this framework, banks must complete various payment obligations by specific deadlines throughout 2025. The first phase requires clearing 60 percent of pre-API invoices by January 2, followed by full settlement of these invoices by July 2. The final phase demands resolution of 85 percent of post-API invoices by year-end, creating a clear roadmap for complete debt resolution.
The origins of this financial standoff trace back to 2019 when banks began accumulating charges for USSD services provided by telecom companies. The situation escalated as many banks struggled to settle these charges, leading to significant debt accumulation over the years. This growing liability threatened the sustainability of USSD services, which have become increasingly crucial for Nigeria’s financial inclusion goals.
The successful de-escalation of this crisis represents a significant victory for regulatory oversight in Nigeria’s financial sector. It demonstrates the effectiveness of coordinated action between the NCC and CBN in addressing complex inter-sector challenges that could impact millions of consumers.
Looking ahead, the structured payment plan provides a framework for preventing similar crises in the future. By establishing clear payment milestones and consequences for non-compliance, regulators have created a template for managing inter-sector financial obligations more effectively.
This resolution also highlights the growing importance of digital financial services in Nigeria and the need for sustainable business models that support these critical infrastructure services. As the country continues its push toward greater financial inclusion, ensuring the viability of USSD services remains paramount for reaching unbanked and underbanked populations.
The successful intervention in this potential crisis serves as a reminder of the delicate balance between commercial interests and public service in Nigeria’s financial sector. It also underscores the importance of proactive regulatory oversight in maintaining the stability of essential financial services that millions of Nigerians rely upon daily.
