CEM REPORT, FINANCE | Experts have said that the best way to achieve financial inclusion in Nigeria is to drastically reduce the cost of data. They claim that Nigeria has one of the highest data costs in the world noting that it is unhealthy for financial inclusion and the overall economic development of the country.
Speaking during a media briefing to discuss the company’s FY 2022 and Q1 2023 earnings reports, the CEO of Guaranty Trust Holding Company Plc, Segun Agbaje, described USSD as a clumsy technology. According to him, the USSD is not state-of-the-art technology, which is why other developing countries like India do not use it.
His statement comes at a time when the Nigerian Communications Commission (NCC) with the backing of the Ministry of Communications and Digital Economy, has approved the disconnection by telcos of banks over the non-payment of USSD fees.
This also comes at a time when Nigerians are lamenting the fast depletion of data. Nigerians have said data do not stay as long as it used to even while performing the same activity as in previous times
While they blame this on excess tax on the telcos which they claim is pushed back to the end users the NCC has argued in the negative. The NCC and related agencies have said it has commenced sensitization exercises to help Nigerians maximise data usage.
The NCC has also provided possible reasons for the fast depletion of data, CEM reported.
Agbaje described the payment issue between banks and telcos as a distraction from the issue of the high cost of data
“USSD is a clumsy technology. It’s not state-of-the-art. The best way to have financial inclusion is to crash the cost of data so that data becomes more affordable. Then we can use what is a superior technology.
“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 realise that we are being exploited.”
Meanwhile, the Association of Licensed Telecoms Operators of Nigeria (ALTON) have asked its members to write the affected deposit money banks (DMBs) and give them an ultimatum to make payment.
According to the association’s Head of Operations, Gbolahan Awonuga, the operators, through the Nigerian Communications Commission (NCC) with the backing of the Ministry of Communications and Digital Economy, have approved disconnection since May 12, “but having weighed the implication that may arise from the disconnection, they exercised restraints”.
He added that If the DMBs fail to honour the given ultimatum, the disconnection begins in earnest.
The Central Bank of Nigeria (CBN) on its part has disclosed that it would wave into the crisis between both industries.
“The CBN is very much aware of the protracted dispute between the banks and telcos and has been engaging all stakeholders to ensure an amicable resolution,” CBN Acting Director of Corporate Communication, Abdulmumin Isa said.
According to him, the direct intervention of the CBN in March 2021 has resulted in per session billing of N6.98 (including settling any outstanding fees) between the banks and telcos. He added that the issue between banks and telecom operators was due to a technical crisis, which has led to high debt.