Public affairs commentator and lawyer, Ilemona Onoja, has warned that additional regulatory costs arising from the Federal Competition and Consumer Protection Commission’s (FCCPC) oversight of airtime credit could eventually push up prices for about 40 million Nigerians who depend on the service.

Onoja, speaking on the implications of the Federal High Court judgment on the regulatory dispute between the Wireless Application Service Providers Association of Nigeria (WASPAN) and the FCCPC, said operators would ultimately transfer additional compliance costs 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,” he said.

According to Onoja who spoke during a twitterspace hosted by Kalu Aja on Sunday, operators would be subjected to an additional regulatory process that would cost money, with the burden eventually reflected in the prices paid by consumers.

“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,” Onoja said.

The warning comes amid the continuing legal battle over the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025, otherwise known as the DEON Regulations.

The FCCPC Introduced the regulations to establish standards for digital and non-traditional lending, citing concerns including exploitative practices, data privacy violations, abusive recovery methods, transparency and responsible lending. The rules came into effect on July 21, 2025.

The regulations became the subject of a legal challenge by WASPAN, which questioned the FCCPC’s authority to regulate activities within the telecommunications value-added services sector, particularly services involving airtime and data lending.

The Federal High Court in Lagos, in its July 20 judgment, upheld the validity of the DEON Regulations but clarified an important boundary between the two agencies.

According to the judgment as explained by Onoja, the FCCPC is a secondary regulator and operators must first be licensed by the relevant primary sector regulator before they can be subject to FCCPC registration. In telecommunications, that primary regulator is the Nigerian Communications Commission (NCC).

The judgment therefore affirmed the NCC’s primary regulatory and licensing role in telecommunications, while allowing the FCCPC to exercise a subsidiary consumer-protection function, provided its regulations do not conflict with those of the primary regulator.

“The court also, at least, clarified that if the NCC as the primary industry regulator does a set of regulations, the FCCPC can do a subsidiary set of regulations, but that subsidiary set of regulations must not conflict with the primary industry regulator,” Onoja said.

He, however, argued that the additional layer could increase the cost and complexity of doing business.

“I do not believe anybody intended that we would have a second tier of regulatory power which naturally will increase cost, which naturally will make business operations a little more convoluted,” he said.

Onoja said the implications could extend beyond airtime credit if the interpretation of the judgment is applied more broadly to other consumer-facing industries.

“The court has established a second tier of licensing regardless of the industry,” he said.

The potential financial impact is significant given the size of the airtime credit ecosystem.

Onoja put the market at about ₦400 billion annually, with about 40 million Nigerians using the service.

He argued that introducing another layer of regulatory compliance into such a large market could increase uncertainty for providers and ultimately affect what consumers pay.

“And again, if you consider that airtime credit worked because the lenders knew the borrowers… Now I have a third party Inserted into this transaction,” he said.

According to him, the additional regulatory involvement could increase operating costs and create uncertainty for investors and service providers.

“When there is uncertainty, I increase interest rates,” he said, arguing that investors seeking to hedge against additional regulatory risks could factor such costs into their pricing.

Onoja said this was particularly important because the airtime credit business depends on high-volume, relatively low-value transactions involving millions of consumers.

The FCCPC, however, has maintained that the DEON Regulations are designed primarily to protect consumers and improve standards in digital lending. The commission has cited complaints involving opaque charges, unexplained deductions, aggressive recovery practices, poor disclosure and inadequate accountability in parts of the digital lending and advance-services market.

The commission had also suspended enforcement of the regulations in April following an interim order of the Federal High Court in Lagos in the WASPAN suit.

Following the July 20 judgment, the FCCPC announced the resumption of implementation of the DEON Regulations, while WASPAN subsequently appealed the judgment and sough’ to challenge the court’s interpretation of the commission’s powers.

For Onoja, however, the issue goes beyond the immediate dispute over airtime credit to the broader question of regulatory coordination and the cost of doing business in Nigeria.

He argued that the dispute could have been avoided if key government officials and regulators had harmonised their positions before the matter reached court.

“This thing could have been avoided if four people had sat in a room,” he said, referring to the ministers responsible for communications and trade, and the heads of the NCC and FCCPC.

He maintained that better coordination would have enabled government to protect consumers while avoiding unnecessary duplication of regulatory requirements.

The lawyer also cautioned that the appeal would be crucial in determining the eventual scope of the FCCPC’s powers.

“I am adamant in my belief that the people who drafted the FCCPC Act did not intend for it to be this sort of overarching super agency with superpowers of control,” Onoja said.

He expressed hope that the Court of Appeal would clarify the extent of the commission’s powers and prevent what he described as an overly broad interpretation of its consumer-protection mandate.

For millions of Nigerians who rely on airtime credit, the outcome of the appeal could therefore determine not only the regulatory framework governing the service but also whether additional compliance costs eventually translate into higher prices for consumers. (The Guardian)

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