FG averts economic crisis amid banks, telecom companies’ feud

By Motolani Oseni

Government has stopped a likely economic downturn that may have resulted from the planned withdrawal of banks’ Unstructured Supplementary Service Data (USSD) by the Association of Licensed Telecommunications Operators of Nigeria (ALTON).

Despite Executive ViceChairman of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta’s statement last Thursday that the telecommunications firms cannot unilaterally withdraw their services to the banks, the mobile operators on Friday decided to suspend the USSD due to over N42 billion debt owed by financial institutions with effect from Monday, March 15, 2021. But the Federal Government at the weekend directed telecommunication companies to suspend the withdrawal of banks’ USSD services.

The directive was contained in a statement entitled, ‘Impending Suspension of USSD Banking Services Put on Hold’, signed by the Technical Assistant on Information Technology to the Minister of Communications and Digital Economy, Femi Adeluyi.

The statement explained that the minister was intervening to ensure an amicable resolution of the dispute, adding that he has called for a meeting of all stakeholders.

There were concerns that Nigeria would have been heading back to recession if the government had allowed the telcos to disconnect financial services providers from the USSD services.

This is because mobile penetration in Nigeria is growing fast and very steadily. According to NCC statistics, the number of mobile subscribers in the country has crossed the 200 million mark.

The number of active telephone subscribers was put at 208 million as of January this year. Meanwhile, as of September 2020, no fewer than43.3 million active bank accounts had been linked to Bank Verification Number (BVN), a report by Nigeria Interbank Settlement System (NBISS), showed Considering the huge population of mobile telephone subscribers and the large number of Nigerians in the financial system, industry experts have said that if mobile operators succeeded in their move, that it was going to affect the bank customers, their businesses and the economy at large.

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A financial expert who commented on the development said, certainly, it was going to affect the service users, however, not just the bank customers but the economy, because when you look at it.

This is because it was going to be a general thing, not just affecting a few customers in just one bank, but a lot of them who are benefitting from the services.

In an exclusive telephone chat with The Daily Times at the weekend, the President, Bank Customers Association of Nigeria (BCAN), Dr Uju Ogubunka, advised the telcos to talk to the regulators of the banks and see how they can dialogue about it before thinking of disconnecting the services.

“Afterall, banks are being owed too, since the banks are under the control of some regulatory agencies, they should try to talk to them, make their problems known and see if it can be negotiated and then if it fails, they can now take other actions they may want to take.

“Besides there are options of actions they can take to settle the issue between them. Because if the banks are owing them, it is not the customers that are owing them but whatever they do will affect the customers, because the banks are not using those services for their own sake, but are using it to deliver service to several millions of bank customers in the financial system.

“Apart from meeting with the regulators such as the CBN, NDIC, among others, is they can as well sue the banks. If somebody owes you and it is not paying you can approach the court, rather than disconnecting USSD services rendering to the banks to service millions of bank customers.

Because when you disconnect banks apparently u are disconnecting everyone in the banking system that are using the services”, he said. In fact, they should not take the economy backwards now, because once they do that, what they are saying is that we should go back to recession, and several people are going to suffer for it, whether we like it or not.

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I think the amicable solution should be subbed for and if it breaks down they can do what they like. Speaking on the impact of the USSD service withdrawal on the economy, he said: “If you are talking about service delivery contribution to the economy, you will see that discontinuation of the USSD service to the banks will affect not just the banks but many other entities who are benefitting from the service in the system.”

He added that such development will affect the digital inclusion strategy of the present government, the financial inclusion the drive of the central bank and some people may lose their jobs as a result of this if their businesses are dependent on the services.

“I would, rather, suggest other options as I mentioned earlier that they should talk to the regulators of the banks, finding out ways they can resolve the issue and secondly, sue them if they fail to pay,” he said.

Meanwhile, in a bid to ensure the amicable resolution of the impasse, Communications and Digital Economy minister, Dr. Isa Pantami, has called for a meeting of all stakeholders, including Governor of the Central Bank of Nigeria, the Executive Vice Chairman of the NCC, the Mobile Network Operators (MNOs), and the financial institutions.

The meeting is scheduled to hold today Monday, 15th of March, 2021. The outcome of the meeting will determine the next step regarding the status of the USSD financial services.