USSD Drama: How NCC's Recent Decision Affects Major Banks

Telecom operators (telcos) have been instructed by the Nigerian Communications Commission (NCC) to disconnect the unstructured supplementary service data (USSD) codes that were linked to nine banks because of outstanding debts.

The disconnection will occur on January 27 if the banks fail to pay outstanding USSD obligations, the commission said in a statement signed by NCC Director of Public Affairs Reuben Muoka on Friday.

United Bank for Africa (919), Unity Bank (7799), Wema Bank (945), Zenith Bank (966), Polaris Bank Limited (833), Jaiz Bank (773), Fidelity Bank (770), First City Monument Bank (329), and Sterling Bank Limited (832).

In the statement, it states that the Nigerian Communications Commission has given Mobile Network Operators (MNOs) permission to disconnect Unstructuted Supplementary Service Data (USSD) Codes that the Commission has assigned to financial institutions that owe the MNOs if the institutions fail to pay the outstanding invoices by Monday, January 27, 2025.

Following then, the Commission will retrieve these codes and may redistribute them to other applicants in compliance with the relevant instruments,

The Commission wants to notify customers that, as part of its consumer protection mandate, they would not be able to access the impacted financial institutions' USSD platform starting on January 27, 2025.
Nine of the 18 financial institutions listed below, according to information provided to the Commission at close of business on Tuesday, January 14, 2025, have seriously disregarded the instructions in the Commission's and the Central Bank of Nigeria's (CBN) Second Joint Circular dated December 20, 2024, regarding the payment of unpaid invoices owed to MNOS, some of which date back to 2020.

"The financial institutions cannot meet the Good Standing standards for the renewal of the USSD Codes given to them by the Commission since they are not adhering to the CBN-NCC Joint Circular.
"The Commission's Guidelines on Short Code Operation in Nigeria, 2023, have been duly notified to the financial institutions of the necessity of immediate compliance."

Within five years, the USSD debt increased from N32 billion to N250 billion.

Due to bank debt of N42 billion (compared to N32 billion in 2019), telcos threatened to terminate USSD service on March 12, 2021.

However, Isa Pantami, the former minister of communications and the digital economy, stopped the motion.

As of November 2022, more than a year later, the USSD debt had grown to N80 billion, according to the Association of Licensed Telecommunications Operators of Nigeria (ALTON).
According to telcos, the debt climbed from N120 billion in May 2023 to N200 billion by November 16 of that same year.

ALTON's executive secretary, Gbolahan Awonuga, said on October 22, 2024, that the sum had risen to N250 billion.

Although efforts to find a long-term solution to the impasse have been made by the NCC, the Central Bank of Nigeria (CBN), and other parties, the efforts have not yielded anything.

Mobile network operators (MNOs) and deposit money banks (DMBs) were instructed by the CBN and the NCC on December 24, 2024, to resolve the long-running debt dispute by paying 85% of all outstanding invoices by December 31, 2024.