The CEO of Guaranty Trust Holding Company Plc, Mr. Segun Agbaje, has opened up on the N120 billion debt owed by banks to telecommunications firms on the use of USSD code by customers as well as other issues on the high price of data.

Agbaje’s comment comes amid renewed tensions between banks and telcos over unpaid USSD debt (amounting to N120 billion) allegedly owed by the banks.

Last week, telecom operators in Nigeria obtained the approval of the Nigerian Communication Commission (NCC) to disconnect the banks from the service over unpaid debt. But the banks have insisted that they cannot pay the money due to the technical issues that often characterize said USSD transactions, especially under circumstances when the transactions fail.

Speaking during a media briefing to discuss the company’s 2023 full year and first 2023 quarter earnings results.

Agbaje described USSD as a clumsy technology, arguing that the only way to actualize financial inclusion in Nigeria is to drastically reduce the cost of data.

According to him, the USSD is not state-of-the-art technology, which is why other developing countries like India do not use it.

He further argued that the ongoing fight between banks and telcos over USSD is nothing but a distraction by telecom firms from the real issue of high data cost. He said that Nigeria has one of the highest data costs in the world. And this is not good for financial inclusion and the overall economic development of the country.

“The whole fight about USSD has been a fantastic distraction by the telcos. The rising cost of data in Nigeria versus other economies like ours has been distracted by USSD.

“If you want financial inclusion, then you need to bring down the cost of data. And when you bring down the cost of data, you start to eradicate USSD. But if you insist on using USSD, the banks have told the telcos to charge the end users. The banks don’t get any of the charges. The banks are saying we don’t want to be involved. If you want to charge N20 for the service, go ahead. But collect it yourself. Don’t come to us.

“I keep telling everybody who cares to listen that USSD is not the answer. The answer is to get the cost of data down in Nigeria. If you compare the cost of data in Nigeria to elsewhere, you’d realize that we are being exploited.”

“The reason is because the N6.98 charge is a punitive cost and most people do not want to pay that just to use the USSD. That’s why it has stopped growing,” he explained.

He, however, noted that on the other hand, mobile banking is booming. The company’s mobile banking business line, in terms of volume and value, was up by 28 percent and 18 percent, respectively.

Unfortunately, the high cost of data in Nigeria might be hindering even more possible growth.

He acknowledged that the bank is competing for tech talents with fintech and foreign companies, noting that they are doing everything possible to recruit and retain the best talents. He then urged the government to help make the country better so that it becomes less attractive for tech talents to want to leave the country for greener pastures.

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