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NCC cuts telcos USSD charge to N4.89k per session

@NgComCommission has ordered all telcos to bring down their USSD services to no more than N4.89k per session.



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The Nigerian Communications Commission (NCC) has issued an order to all telcos to bring down their Unstructured Supplementary Service Data (USSD) services to no more than N4.89k per session.

This came after the Commission issued a regulatory document titled Determination of USSD Pricing which is binding on all Mobile Network Operators (MNOs).

The usual practice involves a negotiation between Mobile Network Operators (MNOs) and financial service providers in determining what the consumers pay for mobile USSD transactions.

The NCC, however, waded into the matter and issued orders on how digital financial services should be done with the aim of issuing new guidelines for licensing finance and getting more Nigerians into the government’s financial inclusion plans.

Nigerian Communications Commission

The Executive Vice President of the NCC, Prof Umar Danbatta

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[READ MORE: NCC sanctions Airtel, 9mobile for misconduct]

The document stated that a USSD session is 20 seconds and would not be charged above N4.89k. The change will be effective from 1st September 2019.

Here are the new USSD guidelines

  • A USSD session is 20 seconds.
  • The cost of a USSD session is N1.63K.
  • The price floor for a 20-second USSD service is N1.63k.
  • The price cap for a 20-second USSD session is N4.89k.
  • Telecoms operators are to price at cost plus margin.
  • This determination does not apply to the currently zero-rated USSD services such as  customer service, balance enquiry, purchase of airtime and data
    services, etc. related to telecommunications services.

The NCC explained the reason for the order, stating that other financial services by the network providers were often high and arbitrary. The regulator also expressed beliefs that banks and licensed mobile financial services providers would comply with this new instruction.

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It is expected that other players in the Digital Finance ecosystem (such as banks and licensed mobile financial services providers etc.) would equally be transparent and ensure that their charges reflect their true cost structures. It is expected that this determination will enable such transparent cost application in that sector. The commission looks forward to action by the other regulators in this regard to achieve fair pricing to the benefit of consumers, the different players in the ecosystem, and Nigeria as a whole.

The Commission encourages the Central Bank of Nigeria to look into, and conclusively address these concerns.

[READ FURTHER: NSE lifts ban on Universal Insurance Plc]

The reaction of telcos: MTN, Globacom, Airtel and 9mobile kicked against the NCC’s decision, noting that the recommended cost might not be a true reflection of the total costs for the provision of USSD services.

They explained that the new regulation is a significant reduction of what obtains in the industry rate and could bring down proceeds for future investments towards supporting the evolving digital financial service ecosystem.

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NCC’s answer: NCC fired back, saying the cost determined took into consideration all the relevant cost elements required to perform a USSD service.

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“The cost is modelled after an ‘efficient operator’ and not intended to be a direct reflection of the cost of any individual operator. 

“The Commission aligns with the assertion that there is no obvious market failure in terms of competition amongst the MNOs in the USSD service market segment.”

The regulator also said this new directive is very crucial in the attainment of Nigeria’s social and economic-financial inclusion strategies.

[READ FURTHER: MTN Nigeria hires KPMG to handle tax dispute as face-off with FIRS continues]

Reincarnated as a lover of stocks, Angel investors, seed funds, and anything aligned to tech or startups raising money, Joseph's work at Nairametrics involves following the money to wherever it leads. Before joining Nairametrics, he won an investigative journalism fellowship with ICIR, appeared in several national dallies, with hard-hitting opinions, features and investigative pieces. He has also engaged in content marketing and copywriting for a top e-commerce firm in Nigeria.

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Economy & Politics

FAAC disburses N682.06 billion to 3 tiers of govt in September [Full-List]

FAAC disbursed the sum of N682.06bn to the three tiers of government in September 2020.



States lose N35.51 billion to bail-out , FAAC disburses N650.8 billion as South-South states receive highest share

The Federation Account Allocation Committee (FAAC) disbursed the sum of N682.06bn to the three tiers of government in September 2020. This is contained in the latest monthly FAAC report released by the National Bureau of Statistics.

According to the report, the federal allocation of N682.06bn disbursed to the three tiers (FG, States and LGAs) indicates a 1% marginal increase when compared to N676.4 billion disbursed in August 2020.

READ: FAAC disburses N647.35 billion in February as allocation drops further

Explore the Advanced Financial Calculators on Nairametrics

The Breakdown

A cursory look at the report showed that in September, the Federal Government received a total of N272.90bn (40%), States received a total of N197.65bn (21.6%) and Local Governments received N147.42bn (21.6%). The sum of N30.88bn (4.5%) was shared among the oil producing states as 13% derivation fund.

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In addition, revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N6.66bn (1%), N13.48bn (2%) and N5.70bn (0.8%) respectively as cost of revenue collections.

READ: Report accuses World Bank of ‘toying’ with Nigeria over $1.5 billion loan

READ: MTN Nigeria posts N975.76 billion revenue for Q3 2020

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Further breakdown of revenue allocation distribution to the Federal Government of Nigeria (FGN) revealed that the sum of N196.56bn was disbursed to the FGN consolidated revenue account; N4.78bn was disbursed as share of derivation and ecology; N2.39bn as stabilization fund; N8.03bn was for the development of natural resources; and N6.12bn to the Federal Capital Territory (FCT) Abuja.

READ: ASUU insists on rejection of IPPIS, says some Professors get N8,000 as salary

States federal allocation rose marginally

In September 2020, allocation to states rose by 3.4% to N197.65 billion compared to N198.8 billion recorded in the previous month.

The top five states with the largest share of monthly allocation in September are Delta (N13.8 Billion), Lagos (N11.44 billion), Rivers (N11.04 billion), Akwa Ibom (10.33 billion) and Bayelsa (N8.33billion). On the other hand, the top five states at the bottom of the ranking are Ekiti (N3.8 billion), Ogun (N3.7 billion), Plateau (N3.6 billion), Osun (N3.24 billion), and Cross River (N3.23 billion).

READ: FG warns Nigerians about on-going N3million COVID-19 grant scam

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READ: Despite shutdown, Caverton rakes in N8billion in Helicopter and Aircraft revenues

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Key Takeaway

The federal allocation disbursed to the three tiers in September showed consistent improvement, when compared the previous months. However, this is still a short fall when compared to N740.87bn disbursed to the three tiers in the corresponding period of 2019.

READ: Power: Nigeria records transmission peak of 5,459.50MW – TCN

The marginal growth recorded in the disbursed federal allocation may be due to the rise in revenue generation, on the back of earlier improvement in both domestic and cross border economic activities.

For states in Nigeria that largely depend on federal allocation to meet recurrent obligations, this may represent some sort of boost. However, the outbreak of the Covid-19 pandemic (second wave) currently emerging in some developed economies may threaten oil price (the country’s main revenue source), as industrial activities may collapse globally for the second time in the year.

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Abuja, Ikeja Discos top list in collection efficiency in Q1 2020- NERC

Abuja and Ikeja had highest in collection efficiency, out of the 11 electricity distribution companies in Nigeria.



Estates in Lekki increase electricity tariff to N105/kWh, Eko Electric, Ikeja and 5 others to face NERC sanction for non-compliance, CBN reveals framework for financing National Mass Metering Programme (NMMP)

A report released by the Nigerian Electricity Regulatory Commission (NERC) revealed that Abuja and Ikeja DisCos scored the highest in collection efficiency, out of the 11 electricity distribution companies in Nigeria, for the first quarter of 2020.

In appraising the individual performances of the DisCos, Abuja DisCo had the highest collection efficiency of 80.89%, followed by Ikeja DisCo with 72.39%. Port Harcourt DisCo has the lowest collection efficiency of 43.36%.

However, on a quarter-on-quarter basis, only Abuja and Kaduna DisCos recorded improvements in collection efficiency. In particular, Kaduna DisCo recorded the highest increase of 3.65 percentage points, moving from 40.44% in 2019/Q4 to 44.09% in the first quarter of 2020.

The total revenue collected by eleven electricity distribution companies (DisCos) from customers in the first quarter of 2020, Q1 2020, stood at ₦114.29 billion out of a total bill of ₦186.82 billion.

The DisCos’ collection efficiency, which is arrived at through total revenue collected as a ratio of the total billing by DisCos, declined in 2020/Q1.

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The overall collection efficiency for all DisCos decreased to 61.18% in the first quarter of 2020, representing 8.26 percentage points decrease from the 69.44% collection efficiency recorded in 2019/Q4.

The collection efficiency implies that for every ₦10.00 worth of energy billed to customers by DisCos in the first quarter of 2020, approximately ₦3.88 remained unrecovered from customers as at when due.

Low collection efficiency combined with billing inefficiencies have had adverse impact on the financial liquidity of the industry, which in turn, has led to low investment in the Nigerian Electricity Supply Industry (NESI).

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What you should know

  • Low collection efficiency has been largely attributed to the customers’ displeasure with estimated billings which have often resulted in an unwillingness to pay the bills.
  • The Commission, during the quarter, issued an order on capping of monthly estimated bill, limiting the total volume of energy an unmetered customer can be billed to the average monthly energy use of a typical pre-paid meter customer in the same business unit.
  • Abuja Electricity Distribution Company (AEDC) is one of the 11 power distribution companies that was privatized and handed over to new investors on 1 November 2013. KANN Utility Limited (KANN) is the 60% equity holder in AEDC. The Federal Government of Nigeria holds 40% equity in AEDC. It has franchise for the distribution and sale of electricity in the Federal Capital Territory, Niger State, Kogi State and Nassarawa State.
  • Ikeja Electric Plc is based in Ikeja, the capital city of Lagos. The company emerged on November 1, 2013 following the handover of the defunct Power Holding Company of Nigeria (PHCN) to NEDC/KEPCO Consortium under the privatization scheme of the Federal Government of Nigeria.

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Economy & Politics

WTO: Nigeria to persuade the US to join the consensus on Okonjo-Iweala – Trade Ministry

Nigeria is making moves to reach out to the US to agreed to appoint Okonjo-Iweala as Director-General of the WTO.



WTO, Okonjo-Iweala joins South Africa's presidential economic advisory council as nation struggles with recession, Dr. Okonjo-Iweala officially declared candidate with the largest and broadest support among members

The Federal Ministry of Industry, Trade & Investment has said that Nigeria is currently reaching out to the United States and South Korea to back the WTO preferred candidate, Dr. Ngozi Okonjo-Iweala, for the role of DG of WTO.

This was disclosed in a statement by the Ministry and reported by Reuters on Saturday morning.

READ: Why Okonjo-Iweala should win the WTO DG role – Prof. Moghalu

Recall that Nairametrics reported this week that the Ministry of Foreign Affairs announced in a statement that Nigeria’s candidate for Director-General of the World Trade Organization (WTO), Dr. Ngozi Okonjo-Iweala, had secured the support of the majority of the member-nations – but was yet to be declared and returned as the winner, as the United States opposed the consensus.

READ: Smartphone users spend $120 billion on mobile apps in 2019 

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Nairametrics also reported this week that Dr. Ngozi Okonjo-Iweala was close to being appointed as the new Director-General of the World Trade Organisation (WTO). A group of ambassadors also known as “troika” had proposed Okonjo-Iweala to lead the WTO, giving her a clear path to becoming the first woman to head the WTO since it started 25 years ago.

The U.S President, Donald Trump, blocked the appointment of Ngozi Okonjo-Iweala as the WTO’s next DG on Wednesday, declaring support for South Korea’s Yoo Myung-hee instead.

READ: Nigeria’s Vehicle, Aircraft & Vessel import jump 891% in Q3 2018

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The Ministry said that the FG would try to persuade the United States to join the consensus, as most of the WTO’s members had agreed to appoint Okonjo-Iweala as DG.

Nigeria is currently reaching out to all members of the WTO including the United States and South Korea to overcome the impasse as well as persuade the United States to join the consensus,” the trade ministry said.

READ: WTO DG: Okonjo-Iweala gets the backing of 79 countries so far

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