In a groundbreaking revelation, the Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta, warns that the staggering N120 billion Unstructured Supplementary Service Data (USSD) debt owed by banks to telecommunication firms is jeopardizing the nation’s financial inclusion drive.
The Nigerian financial landscape faces a looming crisis as the NCC’s Prof. Umar Danbatta sounds the alarm, declaring that the burgeoning N120 billion USSD debt owed by banks to telecommunication companies is severely impeding the progress of financial inclusion in the country.
Speaking at the Association of Telecommunications Companies of Nigeria’s Telecom Executives and Regulators Forum in Lagos, Prof. Danbatta emphasized that the USSD service plays a pivotal role in achieving digital financial inclusion, which currently stands at an impressive 70 percent.
He asserted, “The merit of the service is that without it, there will be no digital financial inclusion, and the penetration would be nowhere where it is now.”
In a stern message to banks, he urged them to acknowledge that no service is free and insisted that they pay their accumulated USSD debts promptly.
“Pay the telcos, that is all we ask. Okay, and as we are saying now, pay them for the debt, the accumulated debt, and then pay them for the service they are rendering as we speak.”
This revelation comes after sustained intervention from the NCC and the acting Central Bank of Nigeria governor, Folashodun Shonubi, who successfully persuaded banks to agree to pay for the USSD service.
Prof. Danbatta expressed relief at this resolution, emphasizing the importance of unity in serving the government’s interests.
“We do not want to disrupt financial services in the country. I’m talking about the telecommunication service providers, and we want to see the index on the penetration even go higher.”
The long-standing dispute between banks and telcos over USSD infrastructure payments, which had lingered since 2019, now seems to be nearing a resolution.
The USSD debt, which had ballooned from N32 billion to a staggering N120 billion by the end of 2022, had often prompted telcos to threaten disconnection of banks from using the critical infrastructure.
Although some banks have initiated payments towards their USSD debt, as noted by Gbolahan Awonuga, Head of Operations at the Association of Licensed Telecommunications Operators of Nigeria, the outstanding amount remains substantial, posing a significant challenge to the financial sector’s stability.
The future of Nigeria’s financial inclusion hinges on resolving this pressing issue, as the NCC’s call for immediate settlement reverberates throughout the nation’s banking and telecommunications industries.
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