40m Nigerians May Pay More for Airtime Credit as Regulatory Costs Rise — Lawyer
Onoja warns extra compliance burden could push up borrowing charges, deter investment
Millions of Nigerians who rely on airtime credit could face higher borrowing costs if additional regulatory requirements increase the operating expenses of service providers, lawyer and public affairs analyst, Ilemona Onoja, has warned.
Onoja raised the concern during a discussion on the ongoing regulatory dispute over airtime lending, arguing that additional compliance obligations imposed on operators would ultimately be passed on to consumers.
“Are my costs going to go up if I borrow credit? Yes. Yes, your cost will go up because of this extra regulatory cost added to the whole thing,” Onoja said during a Twitter Space hosted by financial analyst Kalu Aja on Sunday.
According to him, operators would have to absorb the cost of complying with an additional regulatory framework, with the increased cost of doing business eventually reflected in the price consumers pay.
“The companies are going to take on extra cost. They are going to be subject to an extra process that is going to cost them money. In economics, we all know that producers pass their extra costs down to the consumers,” he said.
The controversy centres on the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025, issued by the Federal Competition and Consumer Protection Commission (FCCPC).
The regulations, which took effect in July 2025, establish requirements relating to transparency, responsible lending, data protection, fairness and consumer redress in Nigeria’s digital lending ecosystem.
The FCCPC has said the framework was introduced in response to complaints involving exploitative lending practices, privacy violations, opaque charges and abusive debt-recovery methods.
However, its application to telecom-related services, including airtime and data advances, has triggered a regulatory dispute.
The Wireless Application Service Providers Association of Nigeria (WASPAN) challenged the FCCPC’s authority to regulate the services, arguing that activities within the telecommunications value-added services space fall primarily under the regulatory jurisdiction of the Nigerian Communications Commission (NCC).
In a July 20 judgment, the Federal High Court in Lagos dismissed WASPAN’s substantive challenge and upheld the validity of the DEON Regulations, while affirming the NCC’s role as the primary licensing authority for telecommunications operators.
WASPAN has since appealed the judgment and sought an injunction restraining enforcement of the regulations pending the determination of the appeal.
Against this backdrop, Onoja argued that the debate should go beyond consumer protection to consider the potential economic consequences of imposing overlapping regulatory requirements on businesses.
He said the airtime-credit market was estimated at about N400 billion annually, with approximately 40 million Nigerians relying on the service.
“Airtime credit worked because the lenders knew the borrowers,” he said, warning that increased regulatory uncertainty could raise the cost and risk of providing the service.
Onoja also argued that investors facing additional regulatory obligations and uncertainty could respond by increasing the cost of credit.
“If I was a guy investing billions into Nigeria and there is a chance I might not get that payment back, what will I do? I am going to increase interest rates,” he said.
He maintained that regulatory uncertainty could influence investment decisions, particularly where companies have already secured approval from their primary sector regulator but subsequently face additional requirements from another government agency.
“When there is uncertainty, I increase interest rates,” he added.
Beyond airtime lending, Onoja warned that the court’s interpretation could have wider implications for businesses operating in consumer-facing sectors if the FCCPC’s framework results in what he described as a second layer of regulatory supervision.
“What this means is that any business in Nigeria can be compelled to register with the consumer agency,” he said.
According to him, such a system could effectively create “a second tier of licensing, supervision, licensing fees, and everything,” adding to the already significant cost of operating businesses in Nigeria.
He also criticised the lack of coordination among government agencies, arguing that the dispute could have been resolved without litigation through early consultation and harmonisation of regulatory responsibilities.
“This thing could have been avoided if four people had sat in a room,” Onoja said, referring to the Minister of Communications, Innovation and Digital Economy; Minister of Industry, Trade and Investment; Director-General of the NCC; and Director-General of the FCCPC.
He argued that stronger inter-agency coordination would enable government to protect consumers without unnecessarily increasing the cost of services or doing business.
The FCCPC has, however, maintained that its DEON framework is designed to protect consumers and does not amount to a ban on airtime borrowing or data-advance services.
The commission said in April that it had received complaints concerning opaque charges, unexplained deductions, aggressive recovery practices and inadequate disclosure in parts of the digital lending and advance-services market.
For consumers, the key issue remains whether the implementation of additional regulatory requirements will translate into higher charges for airtime credit.
Onoja believes the outcome is almost certain.
“I can almost certainly guarantee that,” he said when asked whether consumers would ultimately bear the additional regulatory cost.
With WASPAN’s appeal now before the courts, the dispute is being closely watched by operators, regulators and millions of Nigerians who depend on airtime and data advances.
Beyond the immediate cost of borrowing airtime, the case could also shape how Nigeria manages overlapping regulatory mandates—and whether consumer protection can be strengthened without creating additional costs for businesses and the consumers they serve.
