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The PIA and Oil Company Divestments: A Time to Act

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By Kome Odhomor

Health of Mother Earth Foundation (HOMEF) and We the People invited Niger Delta communities and civil society activists to a one-day conversation on the recently approved Nigerian Petroleum Industry Act. The event which held at the Ken Saro Wiwa foundation innovation Hub in Port Harcourt provided an open space to discuss recent happenings around divestments, where the biggest oil companies in the Niger Delta are selling off their assets and going farther offshore.

In his opening presentation, Nnimmo Bassey, Director of the Health of Mother Earth Foundation stated that from the start, the business of oil extraction operated as a mix of corporate greed and state backed repression.

While it is important that people living in locations where investors, governments or institutions carry out projects cts are consulted, in
the Niger Delta, this has never been the case. The free, prior and informed consent of the people have never been sought or received. These relations of production have remained largely the same from pre-colonial to colonial and present neo-colonial times.

Even in decisions regarding investments, development, or even infrastructural projects, there is wilful neglect and refusal to consult or engage the people in decision making processes. Projects are often thrown at communities even when they are not the priority needs of the people. Little wonder that the projects get abandoned during construction or are left to rot after completion.

All efforts to placate and assuage the massive harms inflicted on the Niger Delta has been carried out through various means including oil company driven Memoranda of Understanding with communities, and various government interventions through agencies such as Niger Delta Development Board (NDDB) established in 1961, the Niger Delta Basin and Rural Development Authority (NDBRDA) established in 1976, the Oil Mineral Producing Areas Development Commission (OMPADEC) established in 1992, the Petroleum Trust Fund (PTF) in 1995,  Niger Delta Development Commission (NDDC) established in 2000 and the Ministry of Niger Delta Affairs created in 2008. These bandages have only sought to cover up festering wounds, without dealing with the fundamental ailments that over six decades of disastrous exploitation has wrought. And they have mostly failed.

With over 1,481 wells, 275 flow stations, over 7,000 kilometres length of oil/gas pipelines and over 120 gas flare furnaces, the Niger Delta is an ecological bomb and one of the most polluted places in the world. Nnimmo Bassey called on the people of the region to rise and demand ecological justice.

In his presentation, Ken Henshaw of We the People reflected on Nigeria’s Petroleum Industry Act and the new frenzied divestment moves by oil companies. According to him, while the PIA establishes a Host Communities development framework to transfer benefits to communities, it doesn’t however allow communities any decent participation in managing the fund, or even determining who runs the trust. Oil companies are given overriding powers to manage the 3% of operational costs contributed to the trust in any manner they deem appropriate; as well as determine which communities qualify to be ‘hosts’. Similarly, the managers of the funds are not even required by the PIA to be from the host communities.

In an outrageous demonstration of the criminalization of communities, the PIA says; “Where in any year, an act of vandalism, sabotage or other civil unrest occurs that causes damage to petroleum and designated facilities or disrupts production activities within the host community, the community shall forfeit its entitlement to the extent of the cost of repairs of the damage that resulted from the activity with respect to the provisions of this Act within that financial year”

This provision stems directly from the erroneous view which has been peddled by oil companies that communities are responsible for sabotage on pipelines and oil theft. However, these view has been debunked by the NNPC and even the United Nations Environment Programme. Both blame equipment failure for majority of spills. Criminalizing oil producing communities in this regard is unfortunate and a smokescreen to shield oil companies from responsibility for the ongoing ecocide in the region. This provision will most likely result in consistent denial of benefits which would in turn engender regular conflicts.

On gas flaring, while the PIA makes it illegal, it nonetheless creates a series of exemptions which ensures that the same gas flare regime continues literarily unchecked, and empowers the government to give licenses to oil companies to flare. The PIA also does not state a definite date for ending gas flaring. Given the health and environmental challenges associated with gas flaring, this is an unfortunately onslaught on the ecology and health of the people of the region.

Surprisingly, fines for gas flaring will not directly benefit communities that suffer the impacts. While sections 52 and 104 says that fines for flaring will be used for environmental and health remediation, it prescribes that such payments be made not to the host communities, but to an agency it establishes called the Midstream and Downstream Gas Infrastructure Fund. In actual fact, this Agency has no mandate or function related to environmental remediation. Evidently, the Act considers gas flaring a waste of economic resources which should be paid for, and not an abuse which is impacting the climate, the health and livelihoods of communities.

One of the key issues in the PIA is the framework for the utilization 30% of NNPC profits for oil exploration in so-called frontier basins. While the Act expects the NNPC to become a profit-making enterprise, it already dedicates a hefty chunk of its expected profit into the search for additional crude oil. The fact that public resources have to be spent in this effort is indicative that oil companies around the world do not consider this a worthwhile investment. Rather than spend so much of the expected profits of NNPC on exploring for oil in unlikely places, we reckon that the government considers investing the same percentage of NNPC profits in generating clean and affordable energy for Nigerians, or even supporting an environmental remediation fund aimed at remediating years of pollution, livelihood loses and health impacts of oil extraction.

Sadly, it is noteworthy that the entire PIA expresses no intention for moving Nigerian away from dependence on fossils. At a time when the world is moving away from crude oil, the PIA plans to make more investments in that regard. This indicates that the government is not keeping in tandem with global trends and unperturbed by concerns of global warming and climate change. Ironically, Nigeria is emerging as one of the most impacted countries globally by the effects of climate change. The shrunken Lake Chad, increased desertification and the regular floods around the Atlantic coast are ready evidences. That the PIA pays no heed to issues of climate change, despite Nigeria’s NDCs, and aims to plunge the country further into fossil extraction is a major source of concern.

The meeting also expressed concern over the emerging shifts from oil and the fate of oil producing communities.

After over 70 years of oil extraction and the devastating impacts it has had on oil producing communities, there are indications that the most complicit oil companies are leaving. And new pressures are emerging from their divestment. The biggest multinational player in Nigeria’s oil and gas sector, and also the most culpable in several years of oil pollution and rights abuses, Shell plans to divest its entire Nigeria joint venture portfolio and make a ‘clean break from Niger Delta assets’.  In 2022, Nigerian independent oil and gas company, Seplat Energy Plc informed the public through a statement that it had acquired ExxonMobil’s Nigerian shallow water business.

As companies divest, local players take over oil assets and immediately deny responsibility for historical damages. For oil producing and impacted communities, divestment means more remote possibilities of holding corporations accountable for pollution, as well as fewer economic opportunities for communities. As companies divest, the Nigerian government keeps failing to establishing frameworks or policies for addressing community concerns. According to the head of NNPC, ‘will ensure that Nigeria’s National strategic interest is safeguarded, by developing a Comprehensive Divestment Policy’. No such plan has been put in place.

For the ecologically devastated communities of the Niger Delta, no hurried divestment by transnational oil companies will be tolerated without restoration of their environment and livelihoods. For them, the definition of just transition has to include repairing the damage occasioned by oil pollution, an audit of the health of the people and a plan to respond to the threats posed by climate change. A just transition must also provide justice for the countless victims of oil company inspired and state sanctioned abuses, and reparations to the people of the Niger Delta for decades of expropriation. Anything short of these is injustice.

Kome Odhomor
Media/Communication Lead

FEATURES

Time for Nigeria to Focus on Solid Minerals Sector

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Nigeria’s solid mineral sector, which was once crucial to the nation’s economy, lost that recognition immediately the nation found oil.

But, with the decreasing oil revenue, the President Bola Tinubu-led administration is revitalising the solid mineral sector and developing its infrastructure to attract foreign investments.

According to the Minister of Solid Minerals Development, Dr Dele Alake, the sector is being repositioned as a major driver of the nation’s economic growth.

As the minister strives toward achieving this goal, critical stakeholders in the industry have emphasised the need to sustain the efforts to meet the goal of diversifying the economy.

One such stakeholder, Mr Mikali Mumuni, believes that the sector has the potential to significantly create wealth and numerous employment opportunities.

Mumini, the Managing Director of Miners Communication Limited, publishers of Miner Magazine, says that the sector is “too good to be ignored”.

“Today, it is dawning upon us that we can no longer depend solely on oil because of the vagaries of international oil market.

“It has become obvious that Nigeria is now earning less and less income from oil.

“Apparently, this is the reason why successive governments have been talking of diversifying the nation’s economic base.

“One of the easiest and surest way to do this is to refocus attention on the solid minerals sector.

“The sector has the highest capacity to create multiple employment opportunities for our teeming population, particularly the youth.

“Basically, the solid mineral sector has been long neglected because of the discovery of oil which made some public policy analysts argued that oil made the nation lazy.

“The reality is dawning on the nation that the holiday is over. It is time to face the reality,” he told newsmen recently.

Mr Abidoye Abiosun, Marketing Director of Miners Communication, while corroborating Mumini, identified lithium as one solid mineral that had gained global focus.

“From what I observed, the Nigerian government is prioritising the expansion and development of its lithium resources in the country.

“The idea is to generate power without polluting the environment.

“To the best of my knowledge, lithium is the major focus in the whole world and that is why,  I think, the Nigerian government is really focusing attention on its expansion and development.

“When you are looking at the area of power generation without polluting the air, creating nuisance and ecological hazard, lithium is the safest,” he said.

Abiosun speaks further on the solid mineral.

“Lithium is also the mineral resource crucial to the production of battery used in the generation of solar energy and other similar products.

“With records showing that Nigeria has a very large deposit of lithium, it should be annexed, properly looked into, and tapped so that it would be a ready-made replacement and alternative to oil.

“Lithium is a versatile element with various applications. Lithium-ion batteries power electric vehicles, mobile devices and renewable energy systems.

“This is due to their high energy density and long lifespan.

“Lithium carbonate is used as a medication to treat bipolar disorder, depression and anxiety disorders.

“Lithium is also used in nuclear reactors as a neutron absorber and in nuclear fusion research.

“Lithium oxide is used to produce specialised glass and ceramics with unique properties. Lithium-based lubricants are used in industrial applications due to their high performance and resistance to extreme temperatures.

“It has long been established that lithium-ion batteries have a high energy-to-weight ratio, making them ideal for portable electronics and electric vehicles.

“This is just as lithium-ion batteries can be charged and discharged many times without losing capacity.

“Lithium carbonate also helps stabilise mood and reduce symptoms of mental health conditions.

“Lithium’s ability to absorb neutrons makes it useful in nuclear applications.

“Lithium-based materials have high thermal resistance, making them suitable for extreme temperature applications,” he explained.

Expectedly, stakeholders have lauded government’s efforts in taking steps to reactivate mining licences and address security concerns so as to make the sector more attractive to investors.

They note that Alake has launched the mineral resources database through which anybody that is interested in investing in solid minerals could access information on which part of the country he or she could get a particular mineral or the other.

The minister said recently that investors could express interest where such lies.

The government has also created the Mining Marshall to make the different mining sites safer for investors as well as miners.

Just recently, President Bola Tinubu gave a matching order to the armed forces to redouble their efforts at curbing illegal mining.

“This, to me, is a great assurance to investors in the mining sector,” Mumuni said.

For Abiosun, the renewed interest on the mineral resources sector by Alake and the Federal Government is commendable and must be supported.

“I think it is a very good step in the right direction,” Abiosun says.

Analysts have, however, said that there is the need to review mining licences as many had been issued but not activated.

“If the government is looking at generating employment through solid mineral and mineral resources in the country, all the mining licence that have been given out, need to be activated.

“Serious investors need to invest in the sector, start action and, at the end of the day, the unemployment rate in the country would have decreased.

“We look at majority of our youths that are at home unemployed; they will have areas in which they can be useful at the mining sites and other activities that are associated with mining in the country.

“I think the Federal Government is taking the right step in the right direction,” Abiosun says.

Stakeholders have also emphasised the need for specialised media coverage to promote and support the growth of the sector.

Mumini emphasises this.

“As journalists, it is our duty to ensure that we do not lower the bar of reportage of the sector.

“This is what forced some of us to come up with the idea of the Miners Communication outfit under which we currently have a monthly news magazine solely devoted to reporting the solid mineral sector.

“It is the only magazine that is doing that in the country. We have taken the lead and we are determined to consistently do this by highlighting the diverse and vast opportunities that abound in the sector,” Mumuni says.

Abiosun notes further: “This is an aspect of journalism that has not been looked into.

“The area is a growing sector and it is a genre that we need to encourage just the way the Nigerian government is trying to encourage the mineral resources industry.” (NANFeatures)

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X-raying Wike’s First Year as FCT Minister

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Shortly after assuming office as FCT minister on Aug. 21, 2023, Mr Nyesom Wike announced short, medium, and long-term plans to restore the Abuja Master Plan.

Wike, along with FCT minister of state Mariya Mahmoud, explained that overhauling the FCT would reposition it to be among the best cities in the world in line with President Bola Tinubu’s “Renewed Hope Agenda”.

He added that emphasis would be placed on infrastructural development, taking one project at a time, to restore the city to its glory.

The minister said that development would also be extended to the six Area Councils as part of strategies to decongest the city and open rural economy.

Sadly, Wike was confronted with the sight of abandoned projects that characterised the capital city.

The minister noted that FCT had, over the years, witnessed foundation laying ceremonies of several structures worth billions, only to be abandoned midway or at advanced stages of the construction.

While assessing them, he pointed out that some of the contracts were awarded in 2007, some in 2011, while others were awarded between 2015 and 2017, with all abandoned.

Confronting the challenge, Wike said that revenue leakages would be blocked so as to mobilise the needed resources for infrastructural development in the FCT.

“I will ensure that Abuja gets the best. You will see projects upon projects, and projects that will be completed and not abandoned.

“I am not a party to abandoned projects. I start a project when there is money as such we will look into our finances before we begin any project,” the minister had said.

Innovatively, Wike got most of the contractors back to site after agreeing on a payment plan with money from the FCT Internally Generated Revenue (IGR) and 2023 Supplementary Budget.

To improve IGR, the minister inaugurated a Task Force on the issuance of Certificates of Occupancy for mass housing developments and the recovery of land use contravention fees in the FCT.

He equally introduced innovations and enforced the payment of outstanding ground rents and other taxes in the FCT, a decision that increased the territory’s revenue generation significantly.

This is evident with the recent declaration of N126.54 billion collected and remitted between January and June by the FCT Internal Revenue Service.

The then acting Executive Chairman of the service, Mr Haruna Abdullahi, said that the figure was 53.5 per cent higher than the N82.46 billion collected in the first half of 2023.

The minister also secured the approval of Tinubu to withdraw FCTA from Treasury Single Account, to enable the administration to access funds from financial institutions to fund projects.

These initiatives paid off, as nine months later, the Wike-led FCTA announced the completion of numerous projects which were inaugurated in May to celebrate Tinubu’s one year in office.

Some of the projects included the official residence of the Vice President, the Abuja Rail Mass Transit system, Inner Southern Expressway from the Outer Southern Expressway to the Southern Parkway.

Others are full scope development of about 6.7km of 10 lanes Outer Southern Expressway from Villa Roundabout to Ring Road 1 Junction, and construction of Southern Parkway from the Christian Centre to Ring Road 1, named after President Bola Tinubu.

Equally inaugurated were the completed B6 (Constitution Avenue)/B12 (Independence Avenue) roads in Central Area, and Wuye interchange bridge.

The full scope development of the Arterial Road, N-20, from Shehu Musa Yar’Adua Expressway to Murtala Mohammed Expressway, was also partly completed and named after noble laurel Wole Soyinka.

Another milestone of the Wike-led FCTA was the completion of engineering infrastructure in Guzape District Lot II, and the resurfacing of 189 roads covering 57km within Abuja city centre among others.

He assured that other ongoing projects would be completed by December 2024, including the rehabilitation and resurfacing of 366 roads in Wuse, Garki, Asokoro and Maitama Districts, covering 117 km.

Also ongoing are the rehabilitation of District Hospital Gwarimpa, Cottage Hospital Gwagwalada and District Hospital Utako, Greater Abuja Water Supply Project and rehabilitation of 19 public primary and secondary schools across the territory.

The minister also recently inaugurated the construction of three bus terminals in the FCT to ensure a secure and convenient travel experience for commuters in the FCT.

He also inaugurated the construction of the Abuja Division of the Court of Appeal Complex to strengthen the administration of justice.

Road users and residents described the feat as unprecedented, saying that Wike was the best thing that had happened to FCT.

“I have been living in Abuja for 16 years but never witnessed a speedy delivery of road projects until Wike happened.

“Look at the road to Asokoro from Apo, which was under construction for several years, but Wike delivered it in just eight months,” said a resident, Mr Andrew Moses.

Similarly, Mr Shuabu Yunusa, a taxi driver said, “It is now seamless going to Asokoro from Apo. The Tinubu-led administration is really working and deserved our commendation.”

In keeping to his promise not to leave rural communities behind in the development agenda, the minister has inaugurated the construction of rural roads of more than 42.2km across the six Area Councils and promised to complete them by December.

Similarly, the minister has also handed over Staff of Office to four newly coronated Chiefs of Karu, Kwali, Pai, and Yaba, as part of measures to strengthen traditional institutions and improve governance in communities.

According to him, the traditional rulers are expected to draw the attention of the government to any development, security and other issues that require government attention and response.

Beyond infrastructural development, stakeholders said that Wike has carved his name in gold by ensuring the implementation of the FCT Civil Service Commission (CSC), 2018, against all odds.

The minister, on Oct. 13, 2023, announced President Tinubu’s approval for the establishment of CSC for the FCTA, in line with the provisions of the law.

This, he said, was to allow career progression for civil servants in the Administration, from director to permanent secretary and, hopefully, Head of Civil Service.

On March 12, Wike announced Tinubu’s approval for the appointment of Mr Udo Atang, as pioneer Head of Civil Service of the FCTA.

Mr Emeka Ezeh was also appointed Chairman of the Commission’s Board, along with six others as commissioners, representing the six geopolitical zones.

Similarly, 10 other directors in the FCTA were appointed as pioneer Permanent Secretaries for various Secretariats of the Administration.

The excited pioneer head of FCT civil service, described the development as a demonstration of the reality of the renewed hope agenda of the Tinubu-led government.

Commending Tinubu and Wike for renewing the hope of FCT workers, Atang said: “the staff of the Administration have never had it this good.

“In the new FCTA system, every member of staff is a potential permanent secretary and head of service.”

To ensure gender equality, as well as women and youth participation in governance, Wike, within one year in office, has created Women Affairs Secretariat and Youth Development Secretariat.

This has increased the number of secretariats in the FCTA from eight to 10 with a view to ensure inclusive governance.

On security, the Wike-led FCTA has supported security agencies, including vigilante groups, with motorcycles and operational vehicles, fitted with modern communication gadgets.

This, according to him, is to enable security agencies to navigate hard-to-reach communities in rural areas and improve security operations within the city.

Wike equally inaugurated a Joint Task Force, consisting of all security agencies in the FCT, to curb the menace of “one chance” and another to curtail the activities of arm rubbers, kidnappers and all forms of crimes within the FCT and its environment.

While assessing the performance of the Wike-led FCTA on security, Mr Adamu Gwary, Director, Security Services Department, FCTA, argued that the impact was impressive, considering the reduced incidents of security breaches.

Sharing Gwary’s view, Prof. Kailani Muhammed, Director-General of the Confederation of All Progressives Congress said that FCT had become a safe haven where residents could afford to sleep with their two eyes closed.

Despite the laudable feats within one year in office, stakeholders have stressed the need to invest more on people-oriented projects such as provision of clean water, quality health services and transportation system.

This, according to them, will impact significantly on the lives of the common residents of the FCT. (NANFeatures)

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Can 10th National Assembly Lay Petroleum Industry Challenges to Rest?

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Nigeria is a leading producer of crude in Africa and a major crude exporter in the world. Oil receipts are the major source of revenue source for the country, contributing more than 80 per cent of the country’s income.Available records from the Statista showed that Nigeria’s crude oil reserves stood at 36.

9 billion barrels and valued at roughly 74 million metric tons.
The crude oil products such as premium motor spirit, otherwise known as petrol, diesel, aviation fuel known in the industry as Jet A1 are imported.
They are a major drain on government’s purse.A cardinal part of President Bola Tinubu’s monetary and fiscal policies is directed at stimulating additional revenue and foreign exchange earnings with ultimate goal of improving livelihood of Nigerians.
The policies are also designed to stabilise exchange rate, reduce inflation, lower interest rate and encourage investments.The petroleum sector is key in achieving these aims because virtually all economic policies revolve around it.However, recent developments in the oil seem to threaten that ambition as accusation and counter accusations bothering on corruption and sabotage have dominate news about the sector.But more disturbing is recent ugly narrative of alleged importation of hazardous and substandard petroleum products into the country.The issue of toxic petroleum product importation came to public space when the Senator representing Cross River South Senatorial District. Sen.Asuquo Ekpenyong, moved a motion on alleged toxic petroleum products importation and distribution.Ekpenyong, had at a Senate plenary on July 3, 2024, sponsored a motion for Senate to probe alleged importation of hazardous petroleum products into the country.Following a comprehensive debate on the motion, Senate consequently constituted an ad hoc committee for an investigation on the matter.The committee members, as announced by President of thee Senate, Sen. Godswill Akpabio were fifteen in number with Leader of the Senate, Sen.Opeyemi Bamidele as chairman.Alongside the onerous mandate to investigate alleged importation of toxic petroleum products, the committee was also mandated to do a comprehensive probe of the sector with a view to ending decades of irritating narratives.However, the one million question, agitating minds of Nigerians is the ability of the 10th National Assembly to end the perceived issues in the sector via the investigation, given outcome of previous investigative hearings on the sector.Interestingly, Bamidele, speaking in Abuja at an interactive session with key stakeholders in the sector re-emphasised the concerns of Nigerians on the upcoming investigation as most of them have ended up has jamborees.He said: “Will this investigative hearing end up like the previous ones?“Can the Senate really address the challenges in the petroleum industry given the entrenched interests of some powerful interests?.“These are some of the questions the media have been asking in their analyses and reports since the constitution of this ad-hoc committee on July 3.”Bamidele said the senate had been carrying out its mandate to resolve deep-seated challenges that had hitherto obstructed to smooth functioning of petroleum industry for decades.He urged all parties to jettison their differences as the committee embarks on a journey to uncover the truth about the goings on in the sector.“I therefore, assure you that we are all committed to conducting a thorough and impartial investigation across all areas outlined in the senate resolution of July 3”, he said.Bamidele said no one concerned would be exempted from the scrutiny, adding that the committee’s collective goal was to serve overriding public interest.According to him, it is truly a challenging period in the nation given that supply of refined petroleum products has been irregular and problematic.“The long queues at filling stations are also a testament to this challenge.“A situation, where we now depend almost entirely on importation of these products, even when we daily supply global oil market’s no fewer than two per cent of its crude oil needs, is to say the least, highly worrisome.Bamidele said to ensure broad participation, the committee has created a platform for the general public and stakeholders to submit memoranda before the public hearings that was slated to hold from Sept. 10 – 12.“We have accepted this huge responsibility with the resolve to make a difference.“We are also staking our integrity and safety to develop an efficient and functional regime that guarantees transparent management of strategic national resources,’’ he said.Sen. Heineken Lokpobiri, the Minister of State for Petroleum Resources, said that the oil sector was bedeviled by lots of misinformation.“This investigation will do a whole lot of justice not only to the Senate but we in the Executive and key leaders in the sector.“Because of the fundamental nature of this investigation that has to do with alleged economic sabotage with importation of substandard products into the country, we urge the Senate to ensure we do a live broadcast,” he said.Similarly, at a news conference organised by the committee, Sen. Abdul Ningi said he understood reservations and pessimism of Nigerians toward outcome of upcoming investigation.“With high level of integrity of members of this committee, we are assuring you that at the end of the day we are going to have a very solid recommendations to move Nigeria forward’’, he said..Sen. Yahaya Abdullahi said from what he glimpsed from media reports, Nigerians were skeptic about the potential outcome of the investigation and its implementation.“We are people that are very much concerned with our integrity. We are here to go deep down into what is happening to see how we can add value to the governance of this country”, Ningi said.Analysts say the capacity of the committee to function rightly, given the pedigree, strength of character, quality of public service records and antecedents of its members was not in doubt, hence the expectation that it will leave above board.Should the members of the committee justify the high rating, the perception is that investigation would be the beginning of an end to the perceived challenges in the industry.Perception is one thing, reality is another. In the event that the latter is the case, what policy makers and implementers will do with the investigation outcome is another kettle of fish.Nigerians cannot afford to wait any longer to be rescued from the troubles inflicted on them by oil and gas, which in other climes is a source of blessing. (NAN

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