Federal Government At Huge Risk Over N120billion Debt

The unresolved N120billion Unstructured Supplementary Services Data (USSD) debt issue between the commercial banks in the country and the telecom operators is again threatening the financial inclusion drive of the federal government.

Earlier in 2020, the federal government’s drive to get more than half of Nigeria’s population to have bank accounts or at least contribute to financial flow through mobile banking was threatened by disagreement between banks and telecommunications companies over Unstructured Supplementary Service Data (USSD) debt.

Also, in March 2021, telecom operators in the country announced that they would stop the use of the Unstructured Supplementary Service Data (USSD) by banks and other financial institutions in the country.

Telecommunications operators under the aegis of the Association of Licensed Telecommunications Operators of Nigeria (ALTON) had in May informed the telecom users that the Nigerian Communications Commission (NCC) had granted an approval for its members to disconnect Deposit Money Banks (DMBs) if they fail to pay the N120bn debt owed to operators for (USSD) services.

In statement signed then by the Chairman of ALTON, Engr, Gbenga Adebayo, the group said the approval was granted because despite multiparty stakeholder efforts to resolve the situation and prevent any impact on services, the banks have continued to incur greater debt, without making the commensurate payments.

Every time some progress is made, the Deposit Money Banks (DMBs) come up with reasons to take stakeholders several steps back, in this matter, the telcos had said.

The Mobile Network Operators(MNOs) and DMBs have had protracted disagreements concerning the appropriate USSD pricing model for financial transactions, transparency of charges, mode of collection and liability for payment of the outstanding and continuous service fees due to the MNOs.

Due to the inability of MNOs and DMBs to reach an agreement on the issues, MNOs in 2021 sought to disconnect DMBs as a result of unpaid debts which stood at N42 billion as at that time.

However, the then Minister of Communications and Digital Economy Prof Isa Ali Pantami intervened and asked the MNOs not to disconnect DMBs as the action will negatively impact on the Digital and Financial Inclusion policy of the Federal Government.

reached a humongous amount of over N100 billion. Even at that, the service was still being provided to customers by the banks using the telecom infrastructure and the telcos were being paid nothing. This was despite the intervention of the immediate past Minister,” Danbatta said.

A telecom right activist, Deolu Ogunbanjo, said Nigerian telecoms subscribers should sue the banks if they couldn’t use the USSD for their banking transactions.

Ogunbanjo, who is the president of the Association of Telecom Subscribers of Nigeria (NATCOMS), said the telcos wouldn’t be doing anything wrong if they eventually disconnect the banks as a result of the unresolved debt issue.

But analysts said with the mounting debt, there is a looming threat that bank customers may be unable to make financial transactions if an agreement isn’t reached soon.

The telecom operators have again threatened to disconnect bank customers from accessing the USSD because of the N120 billion debt owed by the banks. This move would significantly impact online banking transactions that heavily rely on the USSD platform provided by the telecom operators, financial analysts have said.