The Federal High Court in Lagos has upheld the power of the Federal Competition and Consumer Protection Commission to regulate Nigeria’s digital consumer lending market, including airtime and data lending services, in a ruling expected to reshape oversight of an industry estimated at 400 billion naira.

Justice Ambrose Lewis Allagoa dismissed a suit filed by the Wireless Application Service Providers Association of Nigeria, finding that the commission acted within its statutory and constitutional authority in issuing the Digital, Electronic, Online and Non Traditional Consumer Lending Regulations. The ruling lifted the temporary restraint that had prevented the commission from enforcing the rules against digital lenders, including providers of airtime credit services.

The court held that the commission’s authority stems from the 1999 Constitution and the Federal Competition and Consumer Protection Act, which gives it precedence in competition and consumer protection matters while sector regulators retain their technical, licensing and prudential responsibilities. The judge described the relationship between the commission and sector regulators as complementary rather than conflicting, saying the regulations do not encroach on the powers of the Nigerian Communications Commission.

The court rejected the association’s argument that the rules conflicted with the Nigerian Communications Act, ruling that both laws could be read together, and dismissed all the declarations and reliefs sought by the plaintiffs. It also lifted four interim injunctions that had been granted in April restraining enforcement, noting that a statutory regulator should not ordinarily be blocked from performing its lawful duties. No order was made as to costs given the public importance of the case.

The dispute arose after the commission introduced the regulations to strengthen oversight of digital lending following concerns over the conduct of some online lenders, later extending the framework to airtime credit services, under which subscribers receive airtime or data in advance and repay it later with a service charge. The association had argued that airtime lending was a telecom value added service falling solely under the communications regulator’s authority, while the commission maintained that deferred payment airtime services amounted to digital consumer lending within its own mandate.

Following the ruling, the commission announced it had resumed full enforcement of the regulations, noting it had suspended implementation in April in compliance with the earlier court order. Director of Corporate Affairs Ondaje Ijagwu said the commission remains committed to promoting responsible lending, curbing exploitative practices and strengthening consumer protection in the digital lending space.