Banks, telcos settle USSD billing rift after N120bn debt

Telecommunications companies and Deposit Money Banks (DMBs) have resolved their disagreement over the debt rising from the billing of the Unstructured Supplementary Service Data (USSD). The banks were owing the network providers N120 billion from the use of the USSD platform, which is charged on a corporate billing rather than end-user billing as preferred by the DMBs. On Thursday, the Executive Vice Chairman of the Nigerian Communications Commission (NCC) Umar Danbatta, stated that the intervention of the Governor of the Central Bank of Nigeria (CBN), Fola Shonubi, led to the settlement. Speaking at the Telecom Executives and Regulators Forum (TERF) held in Lagos, Danbatta said Shonubi assisted in resolving the confrontation because he knows that without the telcos, the CBN’s financial inclusion programme would not have achieved about 70 per cent. According to the NCC chief, disagreement over the billing system led to the increase in the debt, “The USSD service is being provided to the banks, who in turn provide the service to their customers. The question was who should be paying for the service. “They wanted end-user billing, but we said the service is being provided to the banks, not to their customers. “The banks charge their customers for the service, and they are to pay the telcos in the form of corporate billing, which is neat. “Then along the way, there was a misunderstanding and the debt kept piling until it 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,” he noted. Revealing the reason the CBN and the banks came to an agreement with the telcos, Danbatta stated: “Digital financial inclusion index or penetration is currently about 70% because it is telco driven. “And as such, there shouldn’t be any problem paying for the service. No service is free. Pay the telcos, that’s all we ask. Okay, and as we’re saying, Now, pay them for the debt, the accumulated debt, and then pay them for the service they are rendering as we speak. “At a meeting between the acting CBN governor, the NCC, the telcos and the banks, it was acknowledged that the debt exists, that going forward, the service has to be paid for by the banks through corporate billing. “It is an important development for the telecoms industry that we have found an amicable resolution to the problem because we’re all serving the same government. We do not want to disrupt financial services in the country. “We want to see the financial inclusion penetration to even go higher. We want it to be ubiquitous, but we cannot do this without settling the legacy debt, as well as paying for the service that is being provided.”

Tinubu happy with $3bn NNPCL/Afreximbank’s naira rescue deal

President Bola Tinubu has expressed happiness with the $3 billion in crude-for-cash funding secured from the African Export-Import Bank (Afreximbank) by the Nigerian National Petroleum Corporation (NNPC) Limited, saying it will give a breather to the foreign exchange market.  The NNPC Limited and Afreximbank recently signed a commitment letter and Term sheet for the facility which is expected to support the federal government in its ongoing fiscal and monetary policy reforms to stabilise the forex market. Sources at the villa said the President was happy that the deal has been able to crash the dollar and allow the Naira to gain some value.  The nation has battled foreign exchange liquidity leading to the steep fall of the Naira since the unification of the foreign exchange windows by the Central Bank of Nigeria in June. The crash in the value affected the economy, triggering price hikes in the country and impacting access to imported raw materials by real industry operators. The effect is exemplified in the July inflation which peaked at 24.08 per cent. The source said the President and his team of economic advisers are hopeful that the deal will help the government breathe fresh air into the sluggard economy, make inflation recede and crash the dollar which has risen to an unprecedented N950 to the $ in the parallel market.  The $3 billion loan according to the oil giant is expected to support immediate disbursement that will enable the NNPC Ltd to support the Federal Government in its ongoing fiscal and monetary policy reforms aimed at stabilising the exchange rate market. The Presidency source added that the “quick and proactive steps taken by the NNPC Limited show that this government has the capacity to turn around Nigeria’s economy positively in a short time. What the government needs right now is for forthright thinking appointees of the president to come up with novel ideas like this to better the economy”. “Nigerians, he said, are impatient with government and as such Tinubu’s government doesn’t need laybacks or people with nothing to offer in the saddles of key leadership positions in government. People are impatient for the government to perform, and as such there are no rooms for trial-and-error ministers and heads of agencies” the source further stated. The deal comes about 17 months after the NNPCL secured a $5bn funding commitment from the African Export-Import Bank (Afreximbank) to finance major investments in Nigeria’s upstream sector. The loan secured by the NNPCL is the fourth transaction involving the oil company and AFREXIM Bank over the last three years. It goes further to consolidate the mutual relationship between the two entities.  Both Nigeria and NNPCL are shareholders in Afreximbank, with the sole purpose of enhancing investments and growing prosperity in Africa. The agreement for the loan which was sealed on Wednesday in Cairo, saw the Group Chief Executive Officer of NNPC Ltd, Mele Kyari signing for the National Oil Company while George Elimbi, Executive Vice President Afreximbank signed for the bank.