CONTENTS

DEFINITIONSUnless the context otherwise requires the following expressions shall have the meaning respectively assignedto them:“Allotment Date”“Auditor”“AuthorisedRepresentatives”“Bond”“Bondholder”“Business Day”“CAC”“CBN”“CSCS”“Certificates”“Deed”“DTSG”The date of clearance of the basis of allotment of a Series Issue by SECThe Auditor General of Delta State;The members of the Delta State Executive Council;The Series 1 Bond and any other bond of any Series issued by the State pursuant to theProgramme and constituted by the Programme Trust Deed and an applicable SupplementaryTrust DeedAny person for the time being entered in the Register or the Central Securities ClearingSystem (CSCS) as a holder of a unit or units of the Bonds and includes persons so registeredas joint holders;means a day (other than Saturday or Sunday or a public holiday) on which bankinginstitutions are open for business in Nigeria;The Corporate Affairs Commission;The Central Bank of NigeriaThe Central Securities Clearing System;In relation to the Bonds, a certificate in or substantially in the form specified in the FirstSchedule to the Programme Trust Deed and with respect to any Additional Bonds, aCertificate in or substantially in the form specified in a Supplementary Trust Deed to theparticular Securities being issued or in such other form as may be agreed from time to time bythe Trustee;The Programme Trust Deed and any amendment, notation or supplemental trust deed issuedor made pursuant to this programme trust deed;Means the Delta State Government of Nigeria and the Issuer of the Bonds;“Enabling Law” The Delta State Debt Instrument Law, 2011 (Law No 1 of 2011)“EXCO”“FAAC”“Grossing Up”“IGR”“Interest”The executive council of the Delta State Government of NigeriaFederation Account Allocation CommitteeAll amounts payable under the Bond will be paid in full without set-off or counterclaim orother restrictions and fee and clear of and without deductions or withholding for or onaccount of any taxes or any charges or otherwiseInternally Generated RevenueInterest per annum payable will depend on each series and will be paid semi-annually inarrears.3

DEFINITIONS“Investors”Means the registered holder(s) for the time being of any Securities issued hereunder.“Investment andSecurities Act”or “ISA” The Investment and Securities Act No 29 of 2007.“ISPO”Means the Irrevocable Standing Payment Order in respect of a Series issued by Delta State tothe Accountant General of the Federation for the periodic deduction of monies as a first linecharge from the State’s statutory allocation from the Federation Account and paymentthereof into a Sinking Fund held by the Trustee (as security for the Series Issue);“Issuing Houses or“Joint Issuing Houses” Means Access Bank Plc (“Access”), BGL Plc (“BGL”), FCMB Capital Markets Limited(“FCMB CM”), Greenwich Trust Limited (“Greenwich”), ICMG Securities Limited ÏCMG”),UBA Capital Limited (“UBA Capital”), Vetiva Capital Management Limited (“Vetiva”) andZenith Capital Limited (“Zenith Capital”)“Maturity Date”“NSE”“Offer Documents”“Offer Period”“Pricing Supplement”“The Programme”“ProgrammeTrust Deed”“Projects”“Project Documents”“Receiving Bank”“Register”“Registrar”Means the final anniversary of allotment date of each Series Issue as specified in theapplicable Pricing Supplement.means the Nigerian Stock Exchange.Means this Shelf Prospectus, the applicable Pricing Supplement to the Bond Issue and anyother document issued or to be issued by the State inviting the public to subscribe to theSecurities on the terms and conditions specified in the offer documents.Means the issuance and offering period hereunder of DTSG Bonds in the aggregate principalamount of N100,000,000,000 on the terms and conditions set out in this Prospectus.The document(s) to be issued pursuant to the Shelf Prospectus which shall provide finalterms and conditions of a Series Issue under the Programme;The Delta State Bond Issuance Programme of One Hundred Billion (N100,000,000,000.00)Means the master trust deed between the Issuer and the Trustees dated on 29 th September,2011Means the projects that would be described in the applicable Pricing Supplement of eachSeries or Tranche Issue, to which the proceeds of thereof will be applied.Means all relevant legal and commercial documents (including approvals, feasibility reports,bills of quantity) that are expected to be in place with respect to the projects described inapplicable Pricing Supplements.Means Access Bank PlcMeans the register kept by the Registrar containing the names, particulars and Securities heldfor the time being by each Investor;Means First Registrars Limited4

DEFINITIONS“Revenue”“SEC” or“The Commission”“Series”“Shelf Prospectus”“Sinking Fund”“Stock Exchange”or“the Exchange”“State”“SeriesTrust Deed”“The Bonds”Means monies to the credit of the Consolidated Revenue Fund/Account of the State plus thetotal income of the State from whatever source derived including the State’s InternallyGenerated Revenue;Means the Securities and Exchange Commission established under the Investments andSecurities Act 2007;means the tranches in which the Issuer may issue Bonds from time to time;This document, which is issued in accordance with the Rules and Regulations of theCommission and which details the aggregate offer size and the broad terms of theProgramme.Means the fund held by the Trustee as security for the repayment of the obligations of theIssuer for the Bonds in accordance with the provisions of the Programme Trust Deed andthe applicable Supplemental Trust Deed. A separate sinking fund will be created for eachseries;Means The Nigerian Stock Exchange, or such other securities exchange on which the Statemay from time to time list the Securities;Means the Delta State Government of Nigeria and the Issuer of the Bonds;Means the deed between the Issuer and the Trustees issued as a supplement to theProgramme Trust Deed and setting out amongst other things, specificmatters in respect ofthe Bonds being issued under a particular series or tranche;Means the principal monies represented by the N100,000,000,000 Bonds raised throughtwo or more series issued by the State within the validity period of this Shelf Prospectus;“Trustees”“UnderwritingAgreement”“Underwriters”“VendingAgreement”Means Afribank Trustees & Asset Mgt Co. Ltd, ALM Consulting Limited, First Trustees Nig.Limited, Skye Trustees, UBA Trustees Limited and Union Trustees Limited or trustees forthe time being appointed under the Trust Deeds or in replacement of any existing trustee;Means the agreement made between the Issuer and the Underwriters, to fully underwrite theBonds;Means Access Bank Plc, First City Monument Bank (“FCMB”), United Bank for Africa(“UBA”), Vetiva and Zenith Bank Plc (“Zenith Bank”);Means the agreement made between the Issuer and the Issuing Houses on each Bond Issue,stating the terms and conditions under which the Issuing House(s) will execute the mandate.5

INFORMATION RELATED TO THIS SHELF PROSPECTUSThe information set forth herein have been obtained from official sources that are believed to be reliable; andthe representatives of the State have taken reasonable care to ensure that the material facts contained hereinare true and accurate in all material respects. The information and expressions of opinion herein are subject tochange without notice and neither delivery of this Shelf Prospectus nor any issue made hereunder or anyfuture use of this Shelf Prospectus shall, under any circumstances, create any implication that there has beenno change in the affairs of the State since the date hereof.All financial and other information presented or incorporated by reference in this Shelf Prospectus have beenprovided by the State from its records, except for information expressly attributed to other sources. Thepresentation of certain information, including tables of receipts and other revenues, is intended to show recenthistoric information and is not intended to indicate future or continuing trends in the financial position orother affairs of the State. No representation is made that past experience, as it might be shown by suchfinancial and other information, will necessarily continue or be repeated in the future. However, certainstatements included or incorporated by reference in this Shelf Prospectus do constitute “forward-lookingstatements.” Such statements are generally identifiable by the terminology used such as “forecast”, “plan”,“expect”, “estimate” and “budget” or other similar words. The achievement of certain results or otherexpectations contained in such forward-looking statements involve known and unknown risks, uncertaintiesand other factors that may cause actual results, performance or achievements described to be materiallydifferent from any future results, performance or achievements expressed or implied by such forward-lookingstatements. Any statements made in this Shelf Prospectus involving matters of opinion, whether expresslystated or not, are set forth as such and not as representations of fact.Prospective investors should be aware that forward looking statements are not guarantees of futureperformance and that the State’s financial condition and liquidity may differ materially from those made in orsuggested by the forward looking statements contained in this Shelf Prospectus.A wide variety of other information concerning the State, including financial information, is available from theState website – www.deltastate.gov.ng – and other authorised State publications. Any such information that isinconsistent with the information set forth in this Shelf Prospectus should be disregarded. No suchinformation is a part of or incorporated into this Shelf Prospectus.6

ISSUE OF PRICING SUPPLEMENTS (SUPPLEMENTARY PROSPECTUS)Following the publication of this Shelf Prospectus, a Pricing Supplement shall be prepared for the clearanceand approval of the Securities and Exchange Commission with respect to each Series or Tranche of Bondsissued under the Programme.Statements contained in the relevant Pricing Supplement shall, to the extent applicable (whether expressly, byimplication or otherwise), be deemed to modify or supersede statements contained in this Shelf Prospectus.Any statement so modified or superseded shall not, except as so modified or superseded, constitute a part ofthis Shelf Prospectus.The Issuer, in the event of any significant change, material mistake or inaccuracy relating to informationincluded in this Shelf Prospectus which is capable of affecting the assessment of the Bonds, shall prepare anAddendum or publish a new Shelf Prospectus for use in connection with any subsequent issue of Bondsunder the Programme after the prior approval by the Securities and Exchange Commission.7

PARTIES TO THE PROGRAMMEISSUERREPRESENTATIVE OF DELTASTATE EXECUTIVE COUNCIL:Delta State Government of NigeriaGovernment HouseAsabaDelta StateHis Excellency, Dr Emmanuel Eweta UduaghanExecutive Governor and Chairman of the CouncilHis Excellency, Prof. Amos A. Utuamah (SAN)Deputy GovernorMr.Charles Amajuoritse Ajuyah (SAN)Commissioner for Justice and Attorney GeneralMr. Bernard Oboatarhieyeren OkumagbaHonorable Commissioner for FinanceHon. Funkekeme SolomonHonorable Commissioner for WorksDr. Joseph S. OtumaraHonourable Commissioner for HealthMrs. Betty Oghometite EfekhodaHonourable Commissioner for Women AffairsDr. Chris OghenechovwenHonourable Commissioner for Water ResourcesMr. Patrick FerifeHonourable Commissioner for Lands, Survey& Urban DevelopmentMr. Frank OmareHonourable Commissioner for EnvironmentBarrister Misan KubeyinjeHonourable Commissioner for Agricultural and Natural ResourcesProf. Patrick MuoboghareHonourable Commissioner for Basic/Secondary EducationBarrister Christopher Chike OgeahHonourable Commissioner for InformationDr. Tony NwakaHonourable Commissioner (Bureau for Special Duties)Mr. Ebifa Olisaelika IjomaHonourable Commissioner for Special Duties (Youth Affairs)Chief Paulinus AkpekiHonourable Commissioner for HousingProf. Hope EghaghaHonourable Commissioner for Higher EducationHon. Ben IgbakpaHonourable Commissioner for Transport8

PARTIES TO THE PROGRAMMECO- ISSUING HOUSESBGL Plc12a, Catholic Mission StreetLagos IslandLagosFCMB Capital Markets Limited6 th FloorFirst City Plaza44 MarinaLagosGreenwich Trust LimitedPlot 1698A, Oyin Jolayemi StreetVictoria Island,LagosICMG Securities Limited8A, Ademola Street,South West Ikoyi,LagosUBA Capital LimitedUBA House, 57 MarinaLagosVetiva Capital Management LimitedPlot 266B, Kofo Abayomi StreetVictoria IslandLagosZenith Capital LimitedZenith Heights87 Ajose Adeogun StreetVictoria IslandLagosFINANCIAL ADVISERLEAD STOCKBROKERJOINT STOCKBROKERBGL Plc12a, Catholic Mission StreetLagos IslandLagosBGL Securities Limited12a, Catholic Mission StreetLagos IslandLagosCity Code Trust & Investment Company Limited6, Davies Street,Wema Bank Building (3rd Floor)Marina,LagosCowry Asset Management LimitedPlot 1319 Karimu Kotun Street,Victoria Island,LagosCSL Stockbrokers Limited4 th Floor, First City Plaza44 MarinaLagos IslandLagosForthright Securities Limited19 Martins Street,Marina,Lagos Island,Lagos10

PARTIES TO THE PROGRAMMEICMG Securities Limited8A, Ademola Street,South West Ikoyi,LagosICON Stockbrokers LimitedMedife House (3 rd Floor)58/60, Broad StreetLagosMACT Securities Limited72 Norman Williams CrescentIkoyiLagosNova Finance & Securities LimitedSpeedway House (1st Floor)21 Araromi Street,OnikanLagosResort Securities & Trust Limited14 th Floor, Nicholas House,6, Catholic Mission Street,Lagos Island,LagosSkye Stockbrokers Limited5th Floor, Skye Bank Building,30 MarinaLagosPAC Stockbrokers Limited8A Elsie Femi Pearse Street,Victoria Island,LagosUIDC Securities Limited6 th Floor,Great Nigeria House,47/57 Martins Street,Victoria Island,LagosVetiva Securities Limited266 B Kofo Abayomi Street,Victoria Island,LagosTRUSTEESAfribank Trustees & Asset Mgt Co. LtdAfribank Plaza,14th Floor51/55 Broad Street,LagosALM Consulting LimitedCluster B, Block B, Flat 1021004 Estates,Victoria IslandLagosFirst Trustees Nig. Limited2nd Floor, A. G. Leventis Building42/43 Marina,Lagos.11

DECLARATION BY THE ISSUER14

SUMMARY OF THE PROGRAMME1. Issuer: Delta State Government of Nigeria (“Delta State”, “DTSG” or“the State”)2. Programme Description: Debt Issuance Programme3. Programme Size: N100,000,000,0004. Lead Issuing House: Access Bank Plc5. Co- Issuing Houses: BGL Plc, FCMB Capital Markets Limited, Greenwich TrustLimited, ICMG Securities Limited,UBA Capital Limited, VetivaCapital Management Limited and Zenith Capital Limited (The LeadIssuing House and Co-Issuing Houses shall together be referred toas “the Issuing Houses” or “the Joint Issuing Houses”).6. Programme Trustees: Afribank Trustees & Asset Mgt Co. Ltd, ALM Consulting Limited,First Trustees Nig. Limited, Skye Trustees, UBA Trustees Limitedand Union Trustees Limited.7. Instrument(s) to be Issued: Instrument to be issued under the programme shall be registrableBonds.8. Issuance in Series: Bonds under this Programme will be issued in Series or Trancheson different dates within the 24 months validity of this ShelfProspectus. Details relating to each Series will be contained inthe applicable Pricing Supplement and Supplemental Trust Deed.9. Type of Bonds: The type of Bonds that may be issued under the Programme, whichfor any Series or Tranche will be specified in the applicable PricingSupplement of the Issue shall include:Fixed Rate BondsWhere a Series or tranche is issued as a Fixed-Rate Bond, couponshall be paid on the Bonds at a fixed rate in arrears and will be paidon such dates and such rate as is specified in the relevant PricingSupplement.Floating Rate BondsWhere a Series or tranche is issued as a Floating-Rate Bond, couponrate to be paid shall be determined in line with market conditionand the basis of determining the coupon payments oneverypayment date shall be clearly specified in the relevant PricingSupplement.15

SUMMARY OF THE PROGRAMME10. Use of Programme Proceeds: Proceeds of Bonds issued under the Programme shall be used tofund developmental projects in Delta State. The use of proceedsfor each Bond Issue under the Programme shall be detailed in theapplicable Pricing Supplement.11. Method of Issue: Bonds issued under this Programme shall be via an offer forsubscription or private placements through a book-building processand/or any such methods approved by SEC. The method of issuefor each Series Issue shall be contained in the applicable PricingSupplement.12. Issue Price: The pricing of each Bond shall be contained in the applicablePricing Supplement of the Issue. Bonds may be issued at par, at adiscount or premium to par.13. Issue Currency: The Bonds shall be denominated in Naira (N)14. Tenor: The tenor for each Bond Issue shall be contained in theapplicablePricing Supplement.15. Coupon Rate: The coupon rate to be paid on the Bonds to be issued under theProgramme shall be determined by the Issuer and Joint IssuingHouses and would be specified in the Pricing Supplementapplicable to the Series of Bond16. Early Redemption: Bonds under the Programme may be issued with an embedded earlyredemption option. Where a Bond is issued with this option, theapplicable Pricing Supplement shall specify the first redemptionperiod, redemption amount and other terms applicable to such earlyredemption.17. Redemption: The Bonds shall be redeemed at par on maturity or at anyredemption amount as may be specified in the applicable PricingSupplement18. Day Count Convention: Actual/Actual19. Business Day Convention: Where a payment date falls on a non business day, such paymentshall be postponed to the next business day. If it falls into the nextcalendar month, such coupon payment date shall be broughtforward to the immediate preceding business day.20. Sinking Fund: A Sinking Fund shall be created for each series in accordance withthe provisions of the Enabling Law and the ISA. The Sinking Fundshall be principally funded from the Pledged Revenues by way ofthe ISPO for the purpose of repayment of the interests andprincipal of the Bonds in accordance with the provisions of theTrust Deed. The management of the Sinking Fund is the soleresponsibility of the Trustees.16

SUMMARY OF THE PROGRAMME21. Security: Security for the repayment and other obligations of the Issuer inrelation to the Bonds shall be held by the Trustee and shallcomprise the ISPO issued for each Series by Delta State to theAccountant General of the Federation for the periodic deduction ofmonies as a first line charge from the State’s statutory allocationfrom the Federation Account.Deductions from the State’s statutory allocations shall be madeinto a Series Sinking Fund held by the Trustee as set out in theProgramme Trust Deed and the applicable Supplemental TrustDeed, from which all interests, principal and all other monies ifany, due and payable by the Issuer in respect of the Bonds shallbe paid.22. Taxation: All payments made to Bondholders shall be free and clear ofwithholding, State and Federal income and Capital Gains Taxeswith no deduction made whatsoever at source.23. Grossing Up: All amounts payable under the Bonds will be paid in full withoutset-off or counterclaim or other restrictions and free and clear ofand without any deductions or withholding for or on account ofany taxes or any charges or otherwise24. Quotation: An application will be filed for each series issued with the Councilof the Exchange for the admission of the Bonds to the DailyOfficial List of the Exchange, or such other securities exchange onwhich the State may from time to time list the Bonds.25. Form of Bonds/Transferability:The Bonds will be issued in registered form (certificate form) andbe freely transferable in accordance with the provisions of theProgramme Trust Deed and Series Trust Deed.26. Status of the Bonds: Bonds issued under this programme shall constitute, direct,unconditional and irrevocable obligations of the State and everySeries or Tranche of Bond issued shall rank parri-passu amongthemselves in all respects without any discrimination or preferencewhatsoever.27. Rating :(i) Issuer Rating A- by Global Credit Rating Co. Limited (“GCR”)Bbb+ by Agusto & Co. Limited (“Agusto”)(ii) Bond Rating A+ by Global Credit Rating Co. Limited (“GCR”)A+ by Agusto & Co. Limited (“Agusto”)Claims and Litigation:The State is, presently involved in several civil litigation. However,the total amount claimed in nineteen (19) material cases institutedagainst the State which fall within a materiality threshold ofN20,000,000 (Twenty Million Naira) for monetary claims comes toN5,821,409,348.31.The Solicitors to the Issue are of the opinion that the State’s liabilityin the event of an unfavorable resolution of the disputes against theState would not have any material adverse effect on the Issue”17

SUMMARY OF THE PROGRAMME28. Governing Law: Nigerian Law: - The Constitution of the Federal Republic ofNigeria, 1999- The Fiscal Responsibility Act, 2007- Investment and Securities Act, 2007- The Delta State Debt Instrument Law, 2011 (Law No 1 of 2011)29. Transaction Documents: - Shelf Prospectus- Programme Trust Deed-Supplemental Trust Deed-Pricing Supplement-Underwriting Agreement-Vending Agreement-Joint Issuing House Agreement-Irrevocable Standing Payment Order issued by the Delta State-Letter of approval from the Federal Ministry of Financeauthorizing the Accountant General of the Federation to deductat source from Delta State’s statutory allocation-Financial Statement and Accounts for Delta State from January 1,2005 to period ended September 30, 2010-Resolution of the Executive Council of Delta State-Resolution of the House of Assembly18

TERMS AND CONDITIONS OF THE PROGRAMMEThe following is the text of the terms and conditions which, as supplemented, amended and/or replaced by the Final Terms whichare attached to the relevant Series Trust Deed, Supplementary Shelf Prospectus and/or Pricing Supplement (the “Final Terms”),will be endorsed on or attached to the Bonds issued under the Programme. Further information with respect to Bonds of each Serieswill be given in the applicable Final Terms which will provide for those aspects of these terms and conditions which are applicableto those Bonds. Certain provisions of these terms and conditions are summaries of, and are subject to, the detailed provisions of theTrust Deed.BondsBonds issued under the Programme are issued in series (each a “Series”). Each Series is the subject of theFinal Terms which supplements these terms and conditions (the “Conditions”). The terms and conditionsapplicable to any particular Series of Bonds are these Conditions as constituted by a separate trust deedapplicable to each Series of Bonds. In the event of any inconsistency between these Conditions and theapplicable Final Terms, the applicable Final Terms shall prevail.The Bonds are constituted by a trust deed dated September 29, 2009 (the "Trust Deed") between the Issuerand the Trustees, which expression shall include any person or persons for the time being appointed as theTrustees or trustees under the Trust Deed) as Trustees for the holders (as defined below) of the Bonds (the“Bondholders”).The Bondholders are entitled to the benefit of, are bound by, and are deemed to have notice of, all theprovisions of the Trust Deed. Copies of the Trust Deed are available for inspection at the Specified Office ofthe Trustees as listed on Page 9-10, and at the specified offices of the Registrar as stated on page 10.Words and expressions defined in the Trust Deed (as same has been and may be amended, varied orsupplemented from time to time with the consent of the parties thereto) are expressly and specificallyincorporated to and shall apply to these Conditions.The Bonds are constituted by the Programme Trust Deed. The statements set out in these Terms andConditions (the “Conditions”), include summaries of, and are subject to the detailed provisions of theProgramme Trust Deed and the Series 2 Trust Deed. The Bondholders are entitled to the benefit of, arebound by, and are deemed to have notice of all the provisions of the Programme Trust Deed.1. Interpretation(a) Definitions: In these conditions the following expressions have the following meanings:“Business Day” means a day (other than a Saturday, Sunday or Federal Government of Nigeriadeclared public holiday) on which commercial banks are open for general business in Abuja andLagos;“Business Day Convention”, in relation to any particular date, has the meaning given in theapplicable Final Terms and, if so specified in the applicable Final Terms, may have differentmeanings in relation to different dates and, in this context, the following expressions shall have thefollowing meanings:19

TERMS AND CONDITIONS OF THE PROGRAMME(i)(ii)(iii)(iv)“Following Business Day Convention” means that the relevant date shall be postponed tothe first following day that is a Business Day;“Modified Following Business Day Convention” or "Modified Business DayConvention" means that the relevant date shall be postponed to the first following day that isa Business Day unless that day falls in the next calendar month in which case that date will bethe first preceding day that is a Business Day;“Preceding Business Day Convention” means that the relevant date shall be broughtforward to the first preceding day that is a Business Day;“Floating Rate Convention” means that each relevant date shall be the date whichnumerically corresponds to the preceding such date in the calendar month which is thenumber of months specified in the applicable Final Terms as the Specified Period after thecalendar month in which the preceding such date occurred, provided, however, that:(A)(B)(C)if there is no such numerically corresponding day in the calendar month in which anysuch date should occur, then such date will be the last day which is a Business Day inthat calendar month;if any such date would otherwise fall on a day which is not a Business Day, then suchdate will be the first following day which is a Business Day unless that day falls in thenext calendar month, in which case it will be the first preceding day which is a BusinessDay; andif the preceding such date occurred on the last day in a calendar month which was aBusiness Day, then all subsequent such dates will be the last day which is a BusinessDay in the calendar month which is the specified number of months after the calendarmonth in which the preceding such date occurred.“Day Count Fraction” means in respect of the calculation of an amount for any period of time(the "Calculation Period"), such day count fraction as may be specified in these conditions or theapplicable Final Terms and:(i)(ii)(iii)(iv)if "Actual/365" or "Actual/Actual" is so specified, means the actual number of days in theCalculation Period divided by 365 (or, if any portion of the Calculation Period falls in a leapyear, the sum of (A) the actual number of days in that portion of the Calculation Periodfalling in a leap year divided by 366 and (B) the actual number of days in that portion of theCalculation Period falling in a non-leap year divided by 365);if "Actual/365 (Fixed)" is so specified, means the actual number of days in the CalculationPeriod divided by 365;if "Actual/360" is so specified, means the actual number of days in the Calculation Perioddivided by 360; andif "30/360" is so specified, means the number of days in the Calculation Period divided by360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-daymonths (unless (i) the last day of the Calculation Period is the 31st day of a month but thefirst day of the Calculation Period is a day other than the 30th or 31st day of a month, in20

TERMS AND CONDITIONS OF THE PROGRAMMEwhich case the month that includes that last day shall not be considered to be shortened to a30-day month, or (ii) the last day of the Calculation Period is the last day of the month ofFebruary, in which case the month of February shall not be considered to be lengthened to a30-day month)“Final Redemption Amount” means, in respect of any Bond, its principal amount or such otheramount as may be specified in, or determined in accordance with, the relevant Final Terms;“Insolvency Event” means in relation to the Issuer:i. a voluntary case, proceeding or other action under any Applicable Law of any jurisdiction,relating to the bankruptcy, insolvency, reorganization, suspension of payments or relief ofdebtors seeking to have an order of relief entered with respect to it, or seeking to adjudicateit a bankrupt or insolvent or relief with respect to it or to its debts;ii. a voluntary case, proceeding or other action seeking appointment of a receiver, trustee,liquidator, administrator, custodian, or other similar official of it or for any substantial partof its Property;iii. an involuntary case, proceeding or other action of a nature referred to in clause (i) aboveshall be commenced against it that: (A) shall result in the entry of an order for relief or ofan order granting or approving such adjudication or appointment; or (B) shall remainunstayed, undismissed, undischarged or unbonded for a period of at least 60 days after theparty’s actual knowledge of such action;iv. an involuntary case, proceeding or other action shall be commenced against it that seeksthe issuance of a warrant of attachment, execution, distraint or other similar process againstany substantial part of its Property that shall result in the entry of an order for relief andshall remain unstayed, undismissed, undischarged or unbonded for a period of at leastpending appeal within 60 from the entry thereof;v. there shall be commenced against it any extra-judicial liquidation proceedings under anyApplicable Law on insolvency;vi. it shall admit in writing its inability to pay its debts as they become due;vii. it shall make a general assignment for the benefit of creditors; orviii. it shall take any corporate (or similar) action in furtherance of, or indicating its consent to,approval of or acquiescence in, any of the foregoing acts;“Interest Amount” means, in relation to a Bond and an Interest Period, the amount of interestpayable in respect of that Bond for that Interest Period;“Interest Commencement Date” means the Issue Date of the Bonds or such other date as may bespecified as the Interest Commencement Date in the applicable Final Terms;“Interest Payment Date” means the date or dates specified as such in, or determined inaccordance with the provisions of, the applicable Final Terms“Interest Period” means each period beginning on (and including) the Interest CommencementDate or any Interest Payment Date and ending on (but excluding) the next Interest Payment Date;21

TERMS AND CONDITIONS OF THE PROGRAMME“Interest Rate” means the rate or rates (expressed as a percentage per annum) of interest payable inrespect of the Bonds specified in applicable Final Terms or calculated or determined in accordancewith the provisions of these Conditions and/or the applicable Final Terms;“Issue Date” has the meaning given in the applicable Final Terms;“Indebtedness” means any monetary indebtedness which is represented by a bond or other debtsecurity and which is or is capable of being admitted to or listed or traded on a stock exchange orother securities market (including any over-the-counter market), any loan advanced by a bank, aninsurance company or any other financial institution (including, without limitation, assignable loans)and any guarantee or suretyship in respect of any such monetary indebtedness or such loan;“Maturity Date” has the meaning assigned to it in the applicable Final Terms;“Maximum Aggregate Guaranteed Amount” has the meaning assigned to it in the Deed ofGuarantee“Payment Date” means in respect of each Series, the dates specified as such in the applicable FinalTerms upon which interest and/or principal are due and payable in respect of the Bonds of thatSeries;“Person” means any individual, company, corporation, firm, partnership, joint venture, association,organisation, state or agency of a state or other entity, whether or not having separate legalpersonality;“Principal Amount Outstanding” means, on any day in relation to a Bond, the principal amountof that Bond on issue less the aggregate of all principal payments that have become due and payablein respect of that Bond and have been paid on or prior to that day;“Redemption Amount” means, any principal amount specified to be redeemed, as appropriate, theFinal Redemption Amount, the Optional Redemption Amount (Call), the Optional RedemptionAmount (Put), or such other amount in the nature of a redemption amount as may be specified in,or determined in accordance with the provisions of, the applicable Final Terms;“Redemption Date” means the Payment Date(s) specified in the applicable Final Terms;(b) Interpretation: In these Conditions:(i) any reference to principal shall include the Redemption Amount, any additional amounts inrespect of principal which may be payable under condition 10 (Taxation), any premium payablein respect of a Bond and any other amount in the nature of principal payable pursuant to theseconditions;(ii) any reference to interest shall be deemed to include any additional amounts in respect ofinterest which may be payable under condition 10 (Taxation) and any other amount in thenature of interest payable pursuant to these conditions22

TERMS AND CONDITIONS OF THE PROGRAMME(iii) references to Bonds being "outstanding" shall be construed in accordance with the Trust Deed;and(iv) if an expression is stated in condition 1(a) (Definitions) to have the meaning given in theapplicable Final Terms, but the applicable Final Terms give no such meaning or specify thatsuch expression is "not applicable" then such expression is not applicable to the Bonds.(v) Any reference to the Trust Deed shall be construed as a reference to the Trust Deed asamended and/or supplemented up to and including the Issue Date of the Bonds.2. Form, Denomination, Title and Series2.1 Form and Denomination: The Bonds may be issued in certificated form whereupon a BondCertificate (“Certificate”) will be issued to Bondholders in respect of their registered holding ofBonds. Each Certificate will be numbered serially with an identifying number which will berecorded on the applicable Certificate and in the Register of Bondholders (“Register”) of Bondsof the applicable Series which the Issuer will procure to be kept by the Registrar. The Bonds mayalso be issued in without certificates (dematerialised or book entry), which shall be registeredwith a separate securities identification code with the CSCS.2.2 Title: Title to the Bonds will pass upon registration of the name of the Bondholder in theRegister maintained by the Registrar for this purpose. The Issuer, the Trustees and the Registrarmay deem and treat the holder of any Bond Certificate as the absolute owner of such BondCertificate, free from any equity, set-off or cross-claim on the part of the Issuer against theoriginal or any intermediate holder of such Bond Certificate. All payments made to the holdershall be valid and, to the extent of sums so paid, effective to satisfy and discharge the liability forthe monies payable on the Bonds.2.3 Series: The Series as part of which a Bond is issued shall be stated on the applicable BondCertificate and recorded in the Register. The Register and/or the applicable Final Terms shall beconclusive as to the series of a Bond.3. Registration and Transfer of Bonds3.1 A Register of the Bonds shall be kept by the Registrar at its office, and there shall be enteredin such Register:-(i)(ii)(iii)(vi)(v)The names and addresses of the holders for the time being of the Bonds;The amount of the units of Bonds held by every registered holder;The account number of the Bondholder;The date at which the names of every registered holder is entered in respect of theBond standing in his name; andThe serial number of each Bond Certificate and date of issue thereof.3.2 Any change of name or address on a part of the Bondholder shall forthwith be notified to theRegistrar and thereupon the Register shall be altered accordingly. The Trustees and theBondholders and any Person authorised by any of them shall be entitled at all reasonabletimes during office hours to inspect the Register and to make copies of or take extracts fromthe same.23

TERMS AND CONDITIONS OF THE PROGRAMME3.3 The Bonds are transferable in whole or in part in denominations of N1,000 (or suchdenominations set out in the applicable Final Terms) by instrument in writing in the usualcommon form of transfer or in any form approved by the Issuer and the Trustees and inaccordance with the provisions of the Trust Deed.3.4 Every instrument of transfer of the Bonds must be signed by both the transferor and thetransferee and title to the Bond will pass upon registration of the instrument of transfer inaccordance with the provisions of the Trust Deed.3.5 Every instrument of transfer of the Bond must be left for registration at the office of theRegistrars for the time being of the Bond accompanied by the Certificate for the Bond to betransferred and such other evidence as the Issuer may require to prove the title of thetransferor or his right to transfer the Bond, and if the instrument of transfer is executed bysome other Person on his behalf the authority of that Person so to do.3.6 Any Person becoming entitled to the Bonds in consequence of the death, bankruptcy,winding-up or dissolution of the holder thereof may, upon producing such evidence that hehas or is entitled to the capacity in respect of which he proposes to act under this Conditionor of his title as the Registrars shall think sufficient, be regarded as the holder of such Bonds,or subject to the preceding Conditions as to transfer may transfer the same. The Issuer shallbe at liberty to retain the interest payable upon any Bonds which any Person is entitled totransfer under the preceding Condition until such Person shall be registered or duly transferthe same as aforesaid.3.7 No Bondholder may require the transfer of a Bond to be registered during a period of 21(twenty-one) days immediately preceding each Payment Date during which the Register willbe closed (“Record Date”)4. Redemption, Purchase and Cancellation4.1 Redemption at Maturity: Unless previously redeemed, purchased and cancelled, a Series ofBonds may be fully redeemed in one bullet payment at its Final Redemption Amount (which,unless otherwise provided, is its Principal Amount Outstanding) at the Maturity Date specifiedin the applicable Final Terms.4.2 Redemption by Instalments: Bonds may be partially redeemed by instalment on eachPayment Date at the Redemption Amount specified in the applicable Final Terms whereuponthe Principal Amount Outstanding of such Bond shall be reduced by the Redemption Amounton each Payment Date until fully redeemed at the Maturity Date.24

TERMS AND CONDITIONS OF THE PROGRAMME5. Payments5.1 Subject to Condition 10 (Taxation), any principal, interest or other monies payable on or inrespect of any Bonds may be paid by the Trustees through the Registrar by cheque or warrantsent through recorded delivery post to the registered address of the holder or Person entitledthereto, or in the case of joint holders to the registered address of the joint holder who is firstnamed on the Register in respect of such Bonds, or to such Person and to such address as theholder or holders may in writing direct. Provided that any payment of value aboveN10,000,000.00 (Ten Million Naira) shall be made through electronic payment transfer.5.2 Every such cheque or warrant shall be made payable to the order of the Person to whom it issent or to such other Person or Persons as the holder, or in the case of joint holders, all suchjoint holders may in writing direct and payment of the cheque or warrant shall be a satisfactionof the moneys represented thereby. Every such cheque or warrant shall be sent at the risk of thePerson entitled to the moneys represented thereby.5.3 However, upon application or notification by the Bondholder to the Registrar or the Trustees,such payment may be made by transfer to a designated account (denominated in naira)maintained by the payee with any Nigerian bank as notified to the Registrar.5.4 Whenever any part of the Bond is redeemed a proportionate part of each holding of the Bondshall be repaid to the Bondholders.5.5 Payments will be made to the Person shown in the Register at the close of business on theRecord Date as defined in Condition 3.75.6 The Registrar shall give to the Bondholders not less than [one (1)] month’s notice in writing ofthe time and mode for repayment of the Bonds to be redeemed and each such notice shall statethe amount of the Bond for redemption.5.7 At the time and place so fixed for redemption, each Bondholder shall, where applicable, deliverto the Registrar the relevant Certificate(s) for his Bonds, if any (or other evidence of title issuedby the CSCS) in order that the same may be cancelled together with a receipt for the redemptionmoneys payable in respect of the Bonds, and upon such delivery, the Trustees shall actingthrough the Registrars pay to the Bondholder the amount payable to him in respect of suchredemption together with all interest accrued thereon.5.8 If, on the Maturity Date, any Bondholder whose Bonds are liable to be redeemed shall fail orrefuse to deliver up the Bond Certificate(s) (where applicable) held by him at the time and placefixed for their redemption or shall fail or refuse to accept payment of the redemption moniespayable in respect thereof, the moneys payable to such Bondholder shall be paid to the Trusteesand the Trustees shall hold such monies in trust for such Bondholder and interest on such Bondsshall cease to accrue as from the date fixed for redemption thereof and the Issuer shall therebybe discharged from all obligations in connection with such Bonds. If the Trustees shall place themoneys so paid to them on deposit at a commercial bank or invest them in the purchase ofsecurities for the time being authorised by law for the investment of trust funds the Trusteesshall not be responsible for the safe custody of such moneys or for interest thereon except suchinterest (if any) as the said money may earn whilst on deposit or invested as aforesaid less anyexpenses incurred by the Trustees.25

TERMS AND CONDITIONS OF THE PROGRAMME6. TaxationIn accordance with the provisions of the relevant tax legislation, the approval of the Minister ofFinance has been obtained for all payments in respect of the Bonds to be made without withholdingfor or deduction of any taxes, duties, assessments or governmental charges of whatever natureimposed or levied by or in the Federal Republic of Nigeria.7. EnforcementOnly the Trustees may enforce the provisions of this Trust Deed. No Bondholder shall be entitled toproceed directly against the Issuer to enforce the performance of any of the provisions of this TrustDeed unless the Trustees having become bound as aforesaid to take proceedings fail to do so within 90days and such failure is continuing8. Meetings of Bondholders, Modification and Waiver of Breach8.1 Convening Meeting of Bondholders:The Trust Deed contains provisions for convening meetings of Bondholders of a Series toconsider matters affecting their interests, including the modification by Extraordinary Resolutionof the Conditions or the provisions of the Trust Deed. Such a meeting may be convened by theIssuer or the Trustees and shall be convened by the Issuer or the Trustees at anytime uponrequest in writing of holders of at least 10 percent of the aggregate principal amount of theoutstanding Bonds.8.2 Quorum:The quorum at any meeting of the Bondholders convened for passing an ExtraordinaryResolution will be two or more Persons holding or representing by proxy not less than threefourthsof the nominal amount of the Bonds for the time being outstanding; or, at any adjournedsuch meeting, two or more Persons being or representing Bondholders of the relevant Series,whatever the amount of the Bonds held by them shall be a quorum for all purposes including thepassing of Extraordinary Resolutions and to decide upon all matters which could properly havebeen disposed of at the meeting from which the adjournment took place. An ExtraordinaryResolution passed at any meeting of the Bondholders will be binding on all Bondholders of therelevant Series, whether or not they were present at such meeting.8.3 Resolution in WritingA resolution in writing duly signed by the holders of all the Bonds for the time beingoutstanding, shall be as effective for all purposes as an Extraordinary Resolution duly passed at26

TERMS AND CONDITIONS OF THE PROGRAMMEcredit rating of such Bonds will not be adversely affected: and (c) upon notification to the Securities &Exchange Commission and the Stock Exchange, to the substitution of the Issuer as principal debtorunder the Trust Deed, with any other company;12. Further IssuesThe Issuer may from time to time create and issue further Bonds either having the same terms andconditions as the Bonds in all respects (or in all respects except for the first payment of interest onthem) and so that such further issue shall be consolidated and form a single Series with the outstandingBonds of any series (including the Bonds) or upon such terms as the Issuer may determine at the timeof their issue. References in these Conditions to the Bonds include (unless the context requiresotherwise) any other Bonds issued pursuant to this Condition and forming a single series with theBonds.13. PrescriptionClaims in respect of Bonds will become prescribed unless presented for payment as required byCondition 8 within ten years (in the case of principal) and five years (in the case of interest), from thedue date for payment thereof.14. Notices14.1 Any notice may be given by the Issuer or by the Trustees to any Bondholder by sending thesame through the post in a prepaid letter addressed to such Bondholder at its address appearingon the Register of Bondholders.14.2 Any notice, or other communication may be given to the Trustees hereunder by sending thesame through the post in a prepaid letter addressed to the Trustees at their registered offices inNigeria.14.3 Any notice, or other communication may be given to the Issuer by sending the same throughthe post in a prepaid letter addressed to:The Ministry for FinanceDelta State14.4 Provided that in each case, any notice given to any Bondholder, the Trustees or the Issuer byway of publication in two Nigerian National Dailies will suffice as sufficient notice.15. Governing Law and Jurisdiction15.1 Governing LawThe Bonds and all matters arising from or connected with the Bonds are governed by, and shallbe construed in accordance with, Nigerian law15.2 JurisdictionNigerian Courts shall have exclusive jurisdiction to settle any dispute arising out of or inconnection with the Bonds28

INFORMATION ON NIGERIANational AssemblyThe National Assembly is the legislative arm of the Federal Government. It comprises the Senate (UpperHouse) and the House of Representatives (Lower House). The Senate is headed by a Senate President, who iselected from the body of Senators. The Senate is made up of 3 members each from the 36 States of theFederation and 1member representing the Federal Capital Territory, Abuja. Apart from making laws, theSenate is empowered to approve certain political appointments proposed by the President. The House ofRepresentatives comprises members elected from the Federal Constituencies in each State of the Federation.The House is headed by a Speaker, elected from the membership.Legal SystemThe Nigerian legal system is modelled after the English Common Law, modified by statutes to meet localdemands and conditions. Nigerian law in areas such as patents, trademarks, copyrights and businessassociations, considerably reflects corresponding British statutes in these areas as at the dates of their firstenactment. At the apex of the Nigerian judicial system is the Supreme Court consisting of 15 Justices,including the Chief Justice. The Supreme Court of Nigeria has original and appellate jurisdiction in certainconstitutional, civil and criminal matters prescribed in the Constitution. There is also a Court of Appeal whichhears appeals from the Federal High Court, High Court of a State, Sharia Court of Appeal of a State andCustomary Court of Appeal of a State. Under the Constitution, the Federal High Court has jurisdiction inmatters connected with the revenue of the Government of the Federation, admiralty, banking, foreignexchange and other currency and monetary or fiscal matters. At the State level, there is the High Court thathas jurisdiction to hear and determine both civil and criminal cases. A Customary Court of Appeal of a Stateexercises jurisdiction in civil proceedings involving questions of customary law. A Sharia Court of Appeal hasjurisdiction in cases involving questions of Islamic law. There are Magistrate Courts in the States, which haveoriginal, as opposed to appellate, jurisdiction in civil and criminal matters specified in the appropriatelegislation.International AffiliationsNigeria is affiliated to the following international organisations:African Union:Nigeria is a founding member of the African Union (AU), previously known as Organisation ofAfrican Unity (OAU) which was established in May 1963. Nigeria supports the AU, and takes itsmembership seriously in this primary African political group. The creation of the AU brings thedream of a common African currency, foreign policy, defence structure and economic programmecloser to reality. When the AU is fully operational, it is expected to have a pan-African parliament, aneconomic community, a central bank and a court of justice.Economic Community of West African States (ECOWAS):Nigeria is a founding member of ECOWAS, an economic grouping of 16West African Statesestablished in May 1975 to facilitate trade between the States in the region and to promote regionaljoint development efforts. In January 1990 ECOWAS commenced a Trade Liberalisation Schemeaimed at the total elimination of customs duties and taxes of equivalent effect, removal of non-tariffbarriers and the establishment of a common Customs External Tariff to protect goods produced inmember states.30

INFORMATION ON NIGERIANew Partnership for Africa's Development (NEPAD)Nigeria is an active member of NEPAD (established by the African Union) with the main objective ofgiving impetus to Africa's development by bridging existing gaps between Africa and the developedworld. The main organs of NEPAD are the Heads of State and Government ImplementationCommittee (HSIC) and the Steering Committee. The HSIC comprises 3 states per AU while theSteering Committee comprises the Personal Representatives of NEPAD Heads of State andGovernment. NEPAD is structured into various task teams with responsibility for investigatingpriority areas, including conflict prevention, management and resolution, political and economicgovernance (including capacity building, peer review mechanism and code of conduct), market access(promotion of intra-African Trade and increased access to markets of industrialized countries),development of agriculture, development of human resources, provision of key infrastructure tofacilitate sub regional and continental integration (information communication technology, energy,transport, water and sanitation) etc.The Commonwealth of NationsNigeria is a member of The Commonwealth together with majority of other nations that onceconstituted the British Empire.Organisation of Petroleum Exporting Countries (OPEC)The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, inter-governmentalOrganization, created at the Baghdad Conference of September 10-14,1960 by Iran, Iraq, Kuwait,Saudi Arabia and Venezuela. The five founding members were later joined by nine other Members:Qatar (1961); Indonesia (1962); Socialist Peoples Libyan Arab Jamahiriya (1962); United ArabEmirates (1967); Algeria (1969);Nigeria (1971); Ecuador (1973-92) and re-admitted in 2007; Gabon(1973-1995) and Angola (2007). OPEC's mission is to coordinate and unify the petroleum policies ofmember countries, ensure the stabilization of oil prices in order to secure an efficient, economic andregular supply of petroleum to consumers, a steady income to producers and a fair return on capital tothose investing in the petroleum industry. Nigeria joined the oil cartel in 1971and has remained a veryactive member of the organisation since then. Petroleum plays a major role in the Nigerian economy.Nigeria is the 8th largest exporter and has the 10th largest proven reserves.Other International AssociationsNigeria is a member of the World Trade Organisation (WTO), which deals with global rules of tradeamong nations. Its main function is to promote free trade. The country is also a signatory to theLome Convention, which provides duty-free entry into the European Union (EU) for most goods, inaddition to aid agreements with the EU. Nigeria also belongs to the United Nations and its variousagencies and affiliates.31

INFORMATION ON NIGERIAEconomyNigeria is the second largest economy in sub-saharan Africa (after the Republic of South Africa) and thelargest in West Africa. Nigeria is the eighth largest oil producing country and holds the eighth largest naturalgas reserves in the world. Nigeria’s exports are largely petroleum products which account for 95% of thecountry’s foreign exchange earnings and approximately 80% of budgetary revenues. The impressive outputgrowth in 2010 was sustained in QI 2011. Provisional data from the National Bureau of Statistics (NBS)indicated that real gross domestic product (GDP) was projected to grow by 7.43 per cent in the first quarter of2011, compared with the 7.36 per cent recorded in the corresponding period of 2010. The non-oil sector grewby 8.46 per cent while the oil sector output growth was estimated at 2.90 per cent. Thus, the overall outputgrowth was driven mainly by the non-oil sector with significant contributions from services, wholesale andretail trade as well as agriculture.Capital MarketsThe start of 2011 has seen overall investor confidence shifting towards the debt market, as evidenced by theexcitement surrounding the Federal Government’s debut of its Eurobond. The issuance of the US$500 millionEurobond came through the Debt Management Office (DMO), on January 21, 2011 with 250%oversubscription rate by investors from about 18 countries, including countries in Europe, America, Asia andAfrica. The bond was admitted on the London Stock Exchange on the 31 st of January, 2011.Equities closedthe week ending July 8, 2011 on a negative note sustaining the downward trend that characterized the latterendof June. The Nigerian Stock Exchange All Share Index (NSE-ASI) and market capitalization declined by1.57% each to close at a year-low of 24,310.03 points and N7.77trillion, respectively. The decline was due toprice losses of most traded equities which outweighed gains recorded by some stocks as investors’ appetite forrisky assets declined significantly. It is expected that stock market indices may remain at current levelsfollowing investors’ increasing preference for government securitiesExternal DebtNigeria became the first African nation to fully repay its Paris Club debt in 2006, after years of economicmismanagement and profligate spending led to gross external debt escalating to over US$32 billion by the late1990s. The deal saw Nigeria pay the Paris Club US$12.5 billion in exchange for the elimination of US$30.9billion, the remainder of its official debt. The country has also committed to restructuring its debt of US$2.5billion owed to the London Club of Creditors. Nigeria's Brady debt has effectively been paid down, afterfuture payment obligation on Promissory Notes was transferred to Merrill Lynch in March 2007. As at the endof June 2011, the nation’s external debt stood at $5.398 billion.Domestic DebtDomestic debt in Nigeria is mainly short term, as instruments with maturity structures of two years and belowaccounted for 41.0% of the total Federal Government domestic debt in 2008. The former administration ofChief Olusegun Obasanjo took steps to address the post 19808 legacy of exposure to local contractors and tounfunded pension liabilities of the Federal Government and several of its agencies. Reforms in this regardinclude the introduction of the Debt Management Office, and the Pensions Reform Act 2004, which seeks toensure that all employers of labour with at least five staff members have a fully funded pension scheme. Themanagement of domestic public debt has also been improved by lengthening maturities to reduce rolloverrisks. Given the vast restructuring of Nigeria's external debt, the country's consolidated debt to GDP ratiodropped significantly from 53% in 2004 to an estimated 18.6% as at November 2010. The country’s domesticdebt at the end of June 2011 was N5.213 trillion.32

INFORMATION ON NIGERIAForeign ReservesAt the beginning of 2009, Nigeria's external reserves stood at US$52.8 billion and the excess crude account atUS$15.0 billion, creating a significant buffer against adverse economic and foreign exchange movements. Bythe end of the year, foreign reserves had declined by 26.7% to US$42.5 billion while the excess crude oilaccount balance declined by 56.7% to US$6.5 billion due to reduced foreign exchange earnings from oil andthe subsequent dependence on the excess crude account to fund budget deficits. Foreign reserves picked up inthe fourth quarter of 2009 due to increased oil production coupled with higher oil prices, with over US$3.0billion added in October 2009 alone. However, as at March 2010, foreign reserves further reduced to US$41billion after hovering between US$42 billion and US$43 billion in the first quarter of 2010. Foreign reservesdeclined even further in the second quarter opening the period at US$41.5 billion and closing atUS$38.2 billion; As at December 31, 2010, the foreign reserves were at US$32.3 billion and are currently at$31.89 billion as at end of June 2011.Foreign ExchangeExchange rates remained largely stable prior to the recession with the Naira strengthening against the UnitedStates Dollar to a high of N115.80 in May, 2008. However, as a result of speculative currency trading triggeredby the reduction of external reserves following the global economic meltdown, coupled with the reduction inoil prices and global demand, there 'was significant demand for foreign currency ("FOREX") which led to asubsequent devaluation of the Naira. In a bid to liberalise the FOREX market, The Central Bank of Nigeriadiscontinued the Retail Dutch Auction System (RDAS) and re-introduced the Whole Dutch Auction (WDAS),which restored some stability in the FOREX market. The current official exchange rate is USD/NGN149.9 asat June 30, 2011.InflationOver the last 5 years, inflation rate has dropped steadily from a high of 23.7% (YoY) in 2003 to a record lowof 5.4% as at December 2007. Although up from its record low, recent reforms have strengthened monetarymanagement and helped contain inflationary pressure. Inflation remained in double-digit in the first fourmonths of 2010. CPI rose from 12% year-on-year (y /y) in December 2009 to 12.5% in April 2010. Theprimary driver of inflation in Nigeria remains food prices given that it accounts for 64% of the CPI basket. InMarch 2010, the inflation rate fell to 11.8% from 12.3% the month before. In November 2010 inflation fell to12.8% from 13.4% in October and further down to 11.8% in December 2010 and marginally rose to 12.4%asat May 31, 2011, as at June 30, 2011, inflation was 10.2%Interest RatesAggregate credit has continued to decline largely as a result of reduction in credit to the core private sector,and to state and local governments. Net foreign assets, which posted positive growth in February and March,declined in April 2011. The huge growth in credit to government against the backdrop of continuing decline inprivate sector credit clearly indicates that government borrowing is crowding-out private sector credit. Besides,in the post-crisis period banks in their bid to rebuild their balance sheets have become increasingly risk averse,and have preferred to channel their funds into the relatively risk-free government sector. The Monetary PolicyCommittee, therefore, urged that efforts be sustained to de-risk the real economy through appropriate reformmeasures. The interbank market rates fluctuated at the various segments since the beginning of the year. Keyinterbank rates moved in tandem with the upward revision of the monetary policy rate (MPR) to 7.5 per centfrom 22nd March, 2011. At the last Monetary Policy Committee (MPC) meeting held on July 25 and 26, 2011,MPR was further reviewed upward to 8.75%.33

INFORMATION ON NIGERIAECONOMIC REFORM INITIATIVESThe present Administration is firmly committed to creating a liberal market-oriented economy driven mainlyby the private sector, while focusing on the need to alleviate poverty and advance local production. Nigeria'sreform initiatives have been primarily centred on the following:Economic StabilityFiscal stimulus through draw downs from the excess crude account to augment monthly revenue to the 3tiers of government. In addition to the measures taken by the SEC and the NSE to tighten regulationand reduce transaction costs, the CBN has introduced a number of measures towards stabilising theBanking sector. Oil and Gas/Extractive Minerals Sector ReformDeregulation of the downstream sub-sector; increased local content in the upstream sub-sector through thesigning of the Local Content Bill; de-regulation and development of the solid minerals sector.Institutional ReformCivil service reforms (monetisation of public sector benefits) and right sizing public services;privatisation of key state-owned institutions; and deregulation of strategic economic sectors. Employment Generation and Poverty AlleviationThe National Economic Empowerment and Development Strategy (NEEDS) is an initiative that encouragesthe people to take an active role in the prosperity of Nigeria. The National Poverty AlleviationProgramme (NAPEP) is a programme with an objective to provide micro-credit and other productiveassets to rural and urban poor communities. Accelerated Infrastructural DevelopmentThe government has committed to an ambitious investment programme to address needs in critical areas suchas power, transportation and telecommunications through private public partnerships (PPP) initiatives. Financial Sector ReformThe Pension Reform Act; the Banking and Insurance sector reforms; and capital market reforms.AgricultureNigeria ranks twenty fifth worldwide and first in Africa in farm output. Agriculture has suffered from years ofmismanagement, inconsistent and poorly conceived government policies, and the lack of basic infrastructure.Still, the sector accounts for over 26.8% of GDP [National Bureau of Staticstics,2009] and two-thirds ofemployment. Nigeria is no longer a major exporter of cocoa, groundnuts (peanuts),rubber, and palm oil.Cocoa production, mostly from obsolete varieties and overaged trees, is stagnant at around 180,000 tonsannually; 25 years ago it was 300,000 tons annually. An even more dramatic decline in groundnut and palm oilproduction also has taken place. Once the biggest poultry producer in Africa, corporate poultry output hasdeclined from 40 million birds annually to about 18 million. Import constraints limit the availability of manyagricultural and food processing inputs for poultry and other sectors. The fishery sub-sector is poorlymanaged. Agricultural products include cassava (tapioca), corn, cocoa, millet, palm oil, peanuts, rice, rubber,sorghum, and yams. Livestock production, in order of metric tonnage, includes eggs, milk, beef and veal,poultry, and pork, respectively, while annual average fish catch is estimated at about 500 metric tons.Roundwood removals totaled slightly less than 70 million cubic meters, and sawn wood production wasestimated at 2 million cubic meters. The agricultural sector suffers from extremely low productivity, reflectingreliance on antiquated methods. Although overall agricultural production rose by 28percent during the 1990s,per capita output rose by only 8.5 percent during the same decade. Agriculture has failed to keep pace withNigeria’s rapid population growth, so that the country, which once exported food, now relies on imports tosustain itself.34

INFORMATION ON NIGERIAIndustryNigeria ranks 44th worldwide and third in Africa in factory output. The main products manufactured inNigeria are beverages, cement, textiles, detergents and cigarettes. The manufacturing sector benefited from theeconomic reforms undertaken by the FGN aimed at diversifying the economy from the oil sector. Severallarge investments in the real sector have been made by Nigerian and foreign corporations. However, thecountry's high propensity to import means roughly 80% of government expenditures is recycled into foreignexchange. Cheap consumer imports, coupled with excessively high domestic production costs due in part toerratic electricity and fuel supply, have pushed down industrial capacity utilization to less than 30%. Manymore Nigerian factories would have closed except for relatively low labor costs (10%-15%). Domesticmanufacturers, especially pharmaceuticals and textiles, have lost their ability to compete in traditional regionalmarkets; however, there are signs that some manufacturers have begun to address their competitivenessThe oil boom of the 1970s led Nigeria to neglect its strong agricultural and light manufacturing bases infavour of an unhealthy dependence on crude oil. Oil and gas exports accounted for more than 80% of exportearnings and about 83% of federal government revenue.Nigeria's proven oil reserves are estimated to be 35 billion barrels (5.6×109 m3);natural gas reserves are wellover 100 trillion ft³ (2,800 km³). The types of crude oil exported by Nigeria are Bonny Light oil, Forcadoscrude oil, Qua Ibo crude oil and Brass River crude oil. Poor corporate relations with indigenous communities,vandalism of oil infrastructure, severe ecological damage, and personal security problems throughout theNiger Delta oil-producing region continue to plague Nigeria's oil sector. Efforts are on-going to resolve theseissues. In the absence of government programs, the major multinational oil companies have launched theirown community development programs. The U.S. remains Nigeria's largest customer for crude oil, accountingfor 40% of the country's total oil exports; Nigeria provides about10% of overall U.S. oil imports and rank asthe fifth-largest source for U.S. imported oil.The United Kingdom is Nigeria's largest trading partner followed by the United States. The trade balanceoverwhelmingly favors Nigeria, thanks to oil exports, The government also has been encouraging theexpansion of foreign investment, although the country's investment climate remains daunting to all but themost determined. The stock of U.S. investment is nearly $7 billion, mostly in the energy sector. Significantexports of liquefied natural gas started in late 1999 and are slated to expand as Nigeria seeks to eliminate gasflaring.35

INFORMATION ON NIGERIAFinancial ServicesSeeking to develop a globally competitive financial sector, Governor Chukwuma Soludo, the CBN Governorfrom 2004-2009, set in place a mandatory directive for the 89 Nigerian banks (in existence in 2004) to growtheir shareholders funds from the previous minimum capital requirement of N2 billion to N25 billion byDecember 31, 2005. At the end of the process, 25 of the banks achieved the minimum capital requirementsthrough mergers, acquisitions, takeovers, equity capital raising and capital injections from parent companies.The 64 banks which did not meet N25 billion were liquidated. The result was a leaner and highly capitalisedbanking sector consisting of 25 deposit money banks with enhanced capacity for rapid asset growth andbranch expansion. A successful merger of two of the 25 banks further reduced the number of deposit moneybanks to 24.The consolidation exercise led to an unprecedented growth in the years between 2005 and 2008. Bankingsector assets and liabilities grew by 35.8% between December 2007 and November 2008 alone, to N14,913.7billion. On average, banks reported quarter-on-quarter gross earnings growth of 75.3% in the same period.Banks aggressively grew their loan books across the board, particularly to private sector borrowers. Banklending to private borrowers increased 17.9% in Q1 2008, and a further 13.6% in Q2, according to data fromthe CBN.However, March 2008 marked a turning point for the economy, when the first signs of the effect of the globaleconomic downturn on Nigeria were visible. Oil prices fell from their high of US$144 per barrel and equityprices of quoted stocks began a steady decline, as foreign investors reduced their exposures. The effect on theNigerian banking sector was especially significant due to its considerable exposure to the capital market as wellas the oil & gas industry. Exposure to the capital market in the form of margin loans to operators andindividuals stood at approximately N900 billion as at December 2008, representing approximately 12% ofaggregate credit (39% of shareholders funds). As at the same date, the industry's total exposure to the oil &gas industry was in excess of N754 billion, representing over 10% of aggregate credit (27% of shareholdersfunds). The economic downturn, combined with underdeveloped credit and risk management procedures aswell as lax regulatory controls, led to significant impairment in asset quality, severe capital erosion, tighteningliquidity, and a decline in earnings due to the slowdown in credit disbursements.The asset quality and liquidity problems created concerns about solvency. The CBN, under Soludo, embarkedon a number of initiatives to reduce counterparty risk concerns and improve liquidity in the sector. Theseinitiatives included: Reducing the Monetary Policy Rate (MPR) to 8% Reducing the liquidity ratio requirement from 40% to 25% Reducing the cash reserve requirement from 4% to 1 % Expansion of CBN's discount window in October 2008 to provide banks access to funds forlonger tenures and to accommodate money market instruments such as Bankers Acceptancesand Commercial Papers (at its peak, the banks total outstanding commitments under theExtended Discount Window was N482 billion).Towards the end of Soludo's term, a cloud of uncertainty dominated the banking sector. The general lack oftransparency contributed to troubling symptoms in the banking sector which began to spread to other areas ofthe Nigerian economy, thus weakening macroeconomic conditions through rising interest and exchange rates,4-year low bank valuations, reduced lending to the real sector and loss of investor confidence.36

INFORMATION ON NIGERIABanking Reforms: 2009 - PresentThe current Governor of the CBN, Sanusi Lamido Sanusi, was appointed in June 2009. The CBN's first actionunder the leadership of Sanusi was to close the Extended Discount Window ("EDW") in July 2009 and in itsplace guarantee all inter-bank placements. Notably, 90% of the total disbursements under the EDW betweenits opening and close were to 5 banks Afribank Nigeria Plc, Finbank Plc, Intercontinental Bank Plc, OceanicBank International Plc and Union Bank of Nigeria Plc, who were also the main net takers under Soludo'sEDW arrangement. This prompted the CBN/NDIC to carry out a special examination of the 24 depositmoney banks on liquidity, capital adequacy and corporate governance. The examination was carried out in twophases, the first of which found the above-mentioned 5 banks to be in a 'grave situation' as defined in BOFIA- undercapitalised, insufficient liquidity and poor corporate governance. The initial key findings on the 5 bankswere: NPLs representing 40% of their total loan portfolio. Failure to meet the minimum liquidity requirement and capital adequacy ratios of 25% and10% respectively. Weak corporate governance and risk management Huge concentration in capital market and oil &gas portfolio exposure.In order to prevent further deterioration in the 5 banks, the CBN replaced the executive management in eachbank and injected a total of N420 billion (US$2.6 billion) into the 5 banks. At the conclusion of the secondphase of the examination in September 2009,another group of 5 banks was found to have varying degrees ofdistress. Of the 5 banks, 4 were found to be in a grave situation, namely Equitorial Trust Bank ("ETB"), BankPHB Plc ("Bank PHB"), Spring Bank Plc ("Spring") and Wema Bank Plc. As with the initial 5 banks, theexecutive management of ETB, Bank PHB and Spring Bank were removed. Wema Bank PIc came under newmanagement in June, 2009 and therefore the management was held responsible for the situation in the bankand were given until June 2010 to recapitalise the bank. Unity Bank was adjudged to have sufficient liquiditybut fell short of the statutory required capital adequacy. Accordingly, the CBN ordered Unity Bank to recapitalisebefore June 2010. To ensure stability in the banking sector, the CBN announced that it would offeradditional liquidity support through term loans, totalling N200 billion (US$l.3 billion).The CBN's rationale for intervening was to resolve the immediate liquidity challenges in the country's bankingsystem and to restore stability and confidence to the banking sector. In total, the CBN injected N620 billion(US$4.2 billion) of Tier II capital into banks where it intervened, whilst stimulating liquidity across the sectorby reducing statutory limits and guaranteeing inter-bank placements. To increase transparency, the CBNordered all banks to report their results to September 2009 under a prescribed pro-forma which would ensureadequate and consistent levels of disclosures. To date, there has been no run on the Banks where CBNintervened and inter-bank rates have dropped significantly.To manage the effects of its intervention, the CBN facilitated the recovery of non-performing loans of thebanks where it intervened and has reaffirmed its guarantee of the domestic inter-bank market, guaranteedforeign creditors/ correspondent banks' credit lines to Nigerian banks and maintained effectivecommunication with all stakeholders. Since August 2009, when the first 5 banks (Union Bank,Intercontinental Bank, Oceanic Bank, Afribank and Finbank) were pronounced as 'grave', the nine banks itintervened in are reported to have recovered about N198 billion of non-performing loans. However, there wasan enormous amount of write-off when banks reported their year-end - December 2009 results.On August 5, 2011, the Central Bank of Nigeria (CBN) and National Deposit Insurance Corporation (NDIC)announced the nationalization of three of the banks it had intervened; Afribank Plc, Bank PHB and SpringBank Plc. Afribank Plc was renamed Mainstreet Bank Limited, Bank PHB renamed Keystone Bank Limitedand Spring bank Plc renamed Enterprise Bank Limited, with new management teams installed in the threebanks. The CBN also announced plans to inject 679 billion naira ($4.5 billion) through the AssetManagement Company of Nigeria into the three nationalized banks in a further step to restore stability in thebanking system.37

INFORMATION ON NIGERIAThe Asset Management Corporation of Nigeria (AMCON)The Asset Management Corporation of Nigeria (AMCON) was established to acquire the toxic assets of banksin exchange for liquid assets (i.e. Federal Government guaranteed bonds). AMCON's objective is to assistDeposit Money Banks in improving their capital and liquidity positions and is expected to fuel the recovery ofthe capital market. Under proposed terms, the AMCON could have a capital base of up to US$67 millionwhich will be jointly funded by the FMOF and CBN.AMCON's management team is led by, Mr. Mustafa Chike-Obi (Managing Director) and three ExecutiveDirectors; Mrs. Mofoluke Dosumu, Mr. Hewett Benson and Mr. Abbas Jega responsible for Finance andOperations, Investment and Credit respectively. In its drive to restore stability in the Nigerian banking sector,the Corporation, on December 31, 2010 issued Consideration Bonds with a face value of N1.15 trillion totwenty-one (21) eligible financial institutions (EFIs) in consideration for non-performing loans worth N2.48tn.In March 2011, it commenced a N3 trillion debt program, constituting of two series of N1.7trillion and N1.3trillion each. The 1 st series of N1.7 trillion issued in March consisted of three tranches of N1.15trillion,N30billion and 520 billion. The first tranche issue was used to swap the N1.15trillion initial considerationbond, the second tranche to be used for working capital, while the third tranche was issued as additionalConsideration Bonds to deposit money banks in exchange for Non-Performing Loans.Furthermore, the CBN, after concluding its review of the Universal Banking code, in line with its efforts toreform the Nigerian financial system and ensure a more stable sector, repealed the universal Bankingguidelines which had been in operation since 2000 and issued new rules and guidelines for the banking licensesregime. Titled Regulation on the Scope of Banking Activities & Ancillary Matters, No.3, 2010, the new ruleand guidelines, according to the CBN are aimed at streamlining banking operations in Nigeria as well asreduce the exposure of the banks to higher operational risks. Henceforth only commercial banks; merchantbanks, and specialised banks, which include non- interest banks, microfinance banks, development banks andmortgage banks are permitted to carry out banking businesses in Nigeria.The new rules and guidelines which were signed by the CBN governor Sanusi Lamido Sanusi under Section 57of the Banks and Other Financial Institutions Act Cap. B3 Laws of the Federation of Nigeria 2004, also statedthat no bank shall establish, maintain or permit to exist, any related enterprise except pursuant to Sections21(1) and 22(1) (c) of BOFIA and that such related enterprise must be a banking institution incorporatedoutside Nigeria with the permission of the CBN or a company jointly established by two or more banks withthe approval of the CBN for the purpose of promoting the development of the money market or improvingthe delivery of banking services in Nigeria.One of the rules required all banks holding universal banking license to divest from all non-bankingbusinesses. Banks that wish to engage in non-core banking activities will need to transition into a nonoperatingHolding Company (HoldCo) structure. The banks, having consulted with their stakeholders andobtained all the relevant approvals submitted their plans on compliance with the new banking regime to theCBN in November 2010. Having received approval on their compliance plans, the banks commencedimplementation of their plans in 2011 and many have applied to CBN for new banking licences.Going forward, the regulatory stance is expected to force greater transparency and disclosures. Regulators areexpected to be more proactive and risk focused which will enhance the governance and control environmentin the banking sector. More than likely, we could see the introduction of risk adjusted capital requirements andthe separation of balance sheets with forced autonomy for banks' commercial and merchant bankingbusinesses.38

INFORMATION ON NIGERIAThe current banking reforms have forced Nigerian banks to effectively reveal the true state of their balancesheets and to implement strict governance and control processes. This has helped to contain widespread fearsregarding the health of the banking sector and set the stage for the final phase of the CBN's reform agenda - areconsolidation of the banking sector. Advisers have been appointed by the CBN to assist the Banks where itintervened in implementing a resolution plan which is expected to further stabilise the banking sector.Although the magnitude of losses incurred by the banks had a negative effect on the 2009 earnings of mostbanks, the 2010 results showed that most banks are well on their way to recovery or have fully recovered.Nevertheless, the actions taken by the banks and regulators will help to ensure that the lessons learned in thelast 18 months are integrated into banks' operations going forward, thus creating a safer and well-regulatedbanking sector.39

INFORMATION ON DELTA STATEDelta State is one of the 36 constituent states of Nigeria set out in the Constitution of the Federal Republic ofNigeria 1999. The state was first carved out of the former Bendel State in 1991 with "Asaba" named as thecapital. Delta state was once part of the Mid Western state (from 1963 to 1976) and later Bendel state, from1976 to 1991.The State comprises of 25 Local Government Councils as depicted in the map below and is ethnically diversewith numerous languages spoken in the state. The Delta North is the Igbo region, the Delta Central and DeltaSouth is made up of Urhobo, Ijaw, Isoko, and Itsekiri.. Most inhabitants of the state practiceChristianity.Others practice African Traditional Religion and very few are muslims..LOCATIONThe State is located in the western part of the Niger Delta. It is situated between longitudes 5 ◦ 00’E and 6 ◦ 45’Eand latitudes 5 ◦ 00’N and 6 ◦ 30’N. The state occupies a total land area of 18,050km with a coastline ofapproximately 163km on the Atlantic Ocean. It is bounded in the East by Anambra and Rivers states, in theNorth by Edo State, North-West by Ondo State and South by Bayelsa State and the Atlantic Ocean.The capital city (Asaba) is located at the northern end of the state with an estimated area of 762 Sq km, whileWarri is the economic nerve centre of the state and also the most populated and is located in the southern endof the State.POPULATIONBy the 1963 census, the population of the area constituting the state at that time was 1,456,541 which rose toabout 2,570,181 persons in 1991, with gender distribution of 1,273,200 males and 1,296,973 females.According to Onokerhoraye (1980), there is a considerable movement of population within the state. Between1952 and 1963 for example, the growth rate of the former administrative divisions of Asaba, Aboh, Urhobo,Warri and Western ljaw were 3.24, 3.23, 4.48. 6.71 and 6.38 per cent respectively.The variation in the rate of growth is largely explained by the pattern of migration in the state. For example,out of the 271,215 people who migrated from the southeastern part of the country, the former administrativedivisions of Urhobo, Warri and western ljaw received more immigrants accounting for 38.60, 15.64 and 36.16per cent respectively, while Aboh and Asaba divisions accounted for 5.75 and 3.82 per cent respectively.The variations in immigration pattern suggest greater opportunities for employment in Urhobo, Warri andwestern ljaw divisions. On the other hand, of the 13,870 persons that migrated from the State in the sameperiod, the Urhobo division accounted for 76.77%, while other divisions recorded lower percentage. The highpercentage of emigration from Urhobo division was due to the fact that most of the Urhobos and Isokos weremigrant farmers.40

INFORMATION ON DELTA STATEDelta State 2006 Census by Local Government AreasDelta State had a population of 4,112,445 in 2006. The population distribution for the 25 local governmentareas in the State is contained in the table below with Ughelli North as the most populated and Patani the leastpopulatedAREAMALE FEMALE TOTALSN LOCAL GOVT. AREA LOCAL GOVT. H/Q(Sq.KM)1 Aniocha North Issele-Uku 410 52,448 51,614 104,0622 Aniocha South Ogwashi-Uku 936 69,224 72,821 142,0453 Bomadi Bomadi 170 43,435 42,581 86,0164 Burutu Burutu 1,928 106,169 101,808 207,9775 Ethiope East Isiokolo 462 101,596 99,346 200,9426 Ethiope West Ogharefe 575 102,750 99,962 202,7127 Ika North East Owa-Oyibu 501 91,431 91,388 182,8198 Ika South Agbor 460 82,214 84,846 167,0609 Isoko North Ozoro 447 71,948 71,611 143,55910 Isoko South Oleh 643 119,167 115,980 235,14711 Ndokwa East Aboh 1,796 52,306 50,918 103,22412 Ndokwa West Kwale 941 73,842 76,182 150,02413 Okpe Orerokpe 470 65,270 63,128 128,39814 Oshimili North Akwukwu-Igbo 516 58,101 60,439 118,54015 Oshimili South Asaba 324 76,078 73,954 150,03216 Patani Patani 266 34,307 33,084 67,39117 Sapele Sapele 469 86,167 88,106 174,27318 Udu Otor-Udu 163 71,813 70,667 142,48019 Ughelli North Ughelli 835 160,550 160,137 320,68720 Ughelli South Otu-Jeremi 760 107,730 104,908 212,63821 Ukwuani Obiaruku 352 58,890 60,144 119,03422 Uvwie Effurun 95 93,999 94,729 188,72823 Warri North Koko 2,270 70,446 65,703 136,14924 Warri South Warri 552 158,402 153,568 311,97025 Warri SouthWest Ogbe-Ijoh 1,709 61,026 55,512 116,538Grand Total 18,050 2,069,309 2,043,136 4,112,445S o u r c e : 2 0 0 6 C e n s u s F i n a l R e s u l t s P u b l i s h e d i n t h e F e d e r a l R e p u b l i c o f N i g e r i a O f f i c i a l G a z e t t e ; N o . 2 , V o l . 9 6 (Fe b., 200 9).41

INFORMATION ON DELTA STATETOPOGRAPHYThe south and central areas of the State are essentially flat lands with poor drainage, swamps and vastestuaries. In the northern areas, the topography ranges from low-lying plains to undulating terrains with lowhills and valleys.SOIL CONDITIONSGenerally, the soil of the northern areas of the State have a very deep profile, heavy leaching and gooddrainage with sandy textured surfaces, excellent physical properties and good water holding capacity that allowfor the cultivation of a wide range of crops. The southern and coastal parts of the State have estuarine alluvialsoil deposits which are generally waterlogged, structure-less, grey in colour with a silt clay texture but it isamong the most fertile soils in the State.CLIMATEThe State has a tropical climate marked by two seasons: dry and wet. Average rainfall ranges from 1910mm inthe northern part to 2670mm in the coastal areas of the State.Political HistoryDelta State was once part of Mid-West State from 1963 to 1976 and Bendel State from 1976 to 1991. Indeed,the State was carved out of the defunct Bendel State on 27th August, 1991. At inception, Delta State had 12local government councils which were increased to 25 in 1996. The State capital is Asaba. Other major townsare Warri, Effurun, Sapele, Ughelli, Agbor, Bomadi, Oleh, Ozoro, Kwale, Ogwashi-Uku, Abraka, Oghara andBurutu. The State is rich in culture. The major languages spoken are Urhobo, Igbo, Izon, Isoko and Itsekiri.Most inhabitants of the State profess Christianity. Others practice African Traditional Religion and Islam.Since creation, the State has been administered by both military administrators and civilian governors asindicated in the Table below:.Table 1.2 Military Administrators and Governors of Delta State: 1991 to 2010Name Designation PeriodGroup Capt. Luke Chijiuba Ochulor Administrator 28 August 1991 – 2January 1992Olorogun Ovuodoroye Felix Ibru Governor 2 January 1992 – 17 November 1993Police Comm. Abdulkadir Shehu Acting Administrator 17 November 1993 - 10 December 1993Col. Bassey Asuquo Administrator 10 December 1993 - 26 September 1994Group Capt. Ibrahim Kefas Administrator 26 September 1994 - 22 August 1996Col. John Dungs Administrator 22 August 1996 - 12 August 1998Navy Capt. Walter Feghabo Administrator 12 August 1998 - 29 May 1999Chief James Onanefe Ibori Governor 29 May 1999 - 29 May 2007Dr. Emmanuel Eweta Uduaghan Governor 29 May 2007 - present42

INFORMATION ON DELTA STATEDelta State: Comparative AdvantagesDelta State has a variety of resources and facilities which confers on it significant comparative advantages overother states in the federation. These resources if well-harnessed and utilised can be of tremendous value indeveloping its economic potentials and improving the quality of life of its people and communities.These resources include:Abundant crude oil and natural gas.Solid minerals such as silica, clay, lignite and kaolin.Abundant land for cropping and plantation agriculture.Forest resources.Water bodies for recreation and tourism.Aquatic resources with vast potential for aquaculture.Several ports - Warri, Sapele, Koko and Burutu (collectively known as “Delta Ports”).Functioning steel mill, a petroleum refinery and a petrochemical complex.Availability of qualified manpower in most fields of human endeavour.Inspite of these rich endowments, the State is yet to realise its full potential because of the myriad ofdevelopment challenges confronting it.EconomyDelta State’s economy is diverse but largely driven by crude oil earnings. There are huge potentials in theinformal and other sectors such as agriculture. These are largely underdeveloped because of overemphasis oncrude oil and gas.Delta State Budget and Expenditure ProfileDelta State annual budget grew from N8.58 billion at inception of the civilian administration in 1999 toN187.22 billion in 2007, N232.81 billion in 2008, N256.6 billion in 2009, N331.8 in 2010 and N361.9 in 2011(Delta State Approved Budgets). Total actual expenditure grew from N7.81 billion in 1999 to N139.15 billionin September 2010. The growth in expenditure between 1999 and September 2010 was due largely toincreased allocation from Federation Account Allocation Committee (FAAC) following the implementation ofthe 13% oil derivation revenue principle by the Federal Government as well as higher global oil prices andincreased Internally Generated Revenue (IGR).Recurrent expenditure grew from N5.45 billion in 1999 to N63.04 billion in September 2010. This can beattributed to expansion in the establishment, staffing and running of democratic institutions, strengthening ofthe judiciary, increased recruitment in the civil service, salary increases and capacity building in general.The government took advantage of increased revenue to embark on numerous capital projects especially inthe transport, environment and energy sectors that have improved the quality of life of the indigenes andincreased socio-economic activities. Precisely, capital expenditure increased from N2.36 billion in 1999 toN56.84billion in September 2010.43

INFORMATION ON DELTA STATEDelta State Sectoral Share of GDPIt is widely believed that Delta State (contributing an estimated average of 10% of national output per annum)is the 3rd largest contributor to Nigeria’s GDP after Lagos and Rivers State. Based on statistics from NationalBureau of Statistics and from the Report of study commissioned by the Delta State Ministry of EconomicPlanning, Delta State’s largest sectoral contribution to the National GDP is Oil & Gas. Other importantsectors in terms of output are agriculture (10.46% in 2005 and 10.43% in 2008) and manufacturing (7.59% in2005 and 6.98% in 2008). Wholesale and retail trade share of GDP rose from 3.15% in 2005 to 3.58% in 2006before declining to 2.23% in 2008. Similarly, the transport sector’s contribution to GDP fell from 2.79% in2006 to 2.44% in 2008.Although the contribution of these sectors may not be as significant as crude oil and gas, they provide the bulkof the employment in the State. Other sectors comprising solid minerals, building and construction, real estate,electricity, financial institutions, insurance and public administration contributed poorly to output with figuresbelow 2%.The dominance of the State’s output by crude oil and gas has challenged the State to develop long-termpolicies and programmes to strengthen other critical sectors to enable her realise its full economic potentialsand put it on the path of sustainable growth and development. Consequently, the State has developed a 10year plan known as Delta Vision 2020.Notably, oil and gas sector remains strategic to the growth and development of the State. Efforts are beingmade to attract more oil companies to the State. The State government has constituted two committees totake advantage of the Local Content Act and the National Gas Master Plan to attract investors to participatein the oil and gas industry through appropriate incentives under Public Private Partnership (PPP). The mainfocus is to use the high revenue accruing from the sector to diversify the economic base of the State andpursue economic growth and development based on the non-oil sector. Thus, emphasis is being shifted tosuch sectors as agriculture, tourism, commerce and industry. This is the idea behind the concept “Deltawithout oil”Delta State Development Strategy: The Three-Point AgendaDelta State has witnessed considerable progress under the stewardship of His Excellency, Dr. EmmanuelUduaghan, who introduced the Three-Point Agenda:Peace and Security;Human Capital Development; andInfrastructure Development.Peace and SecurityThe State recognises that the absence of peace and security is a major constraint to the attainment of hereconomic potentials as it discourages new private sector investments and Foreign Direct Investment (FDI). Itcould also have adverse effect in terms of the realisation of existing investment potentials. In this regard, thestrategic priority of the government is to significantly reduce the incidence of youth restiveness and communalconflicts in order to create a conducive environment for business, wealth creation and employmentgeneration.Towards this end, the Delta State Security and Waterways Committee was established with a core mandate tomonitor and report on all issues that may breach peace and security in the riverine areas of the State.44

INFORMATION ON DELTA STATEGovernment is also proactively engaging traditional rulers, chiefs, youth leaders, market women, and securityagencies to resolve conflicts, promote peace as well as sustainable development. In terms of developing oilproducing communities to reduce social tension and meet community expectations, Delta State Oil ProducingAreas Development Commission (DESOPADEC) was created with the mandate to promote physical andsocial infrastructural development in oil bearing communities with 50% of the monthly 13% derivation fundaccruing to the State.Human Capital DevelopmentA major development priority in Delta State is human capital development. The State has numerous policiesand programmes in place covering education, healthcare, potable water, sanitation, public utilities andempowerment to achieve rapid and sustainable economic development.A primary objective of the State is to provide accessible and affordable healthcare services with a view toincreasing life expectancy. To achieve this, government has introduced across the State free rural, maternal,and under-5 healthcare programmes as well as the establishment of new Primary Healthcare Centres (PHCs)and hospitals including the Delta State University Teaching Hospital, Oghara.In the education subsector, policies, programmes and structures have been developed to ensure equity andaccess to educational opportunities by all Deltans. Government is pursuing programmes that will enhanceadequacy of schools. Some of the programmes in the education sub-sector include: re-opening of schools shutduring past ethnic crises; rehabilitation of dilapidated classrooms and construction of new ones; payment ofexamination fees for secondary school students; bursary schemes and subsidised fees for students of tertiaryinstitutions; expansion of instructional and infrastructural facilities in tertiary institutions; employment ofteaching and non-teaching staff; as well as training and retraining of staff.In the area of empowerment, the government has built several skills acquisition centres and initiatedprogrammes such as Delta Micro-credit Programme (DMCP), the Youth Empowerment through Agriculture(YETA) and other collaborative interventions with various local and international agencies/institutions. TheDelta Micro-credit Programme is a model in the country and has won the State several awards. It has so farpositively empowered many Deltans.Infrastructure DevelopmentInfrastructure is a major driver of economic growth and development. The State applies a higher percentageof her budgets to the implementation of strategic infrastructural projects. To this end, the State isimplementing a number of projects such as the Asaba International Airport; expansion of the Osubi Airport;the dualisation of the 150km Ughelli-Asaba highway and the 32km Koko-Ugbenu road; the establishment ofKoko Export Free Zone; and the Warri Industrial Business Park.Challenges of the FutureIn spite of the high potentials for growth and development, Delta State has numerous challenges which if nottackled could hamper prospects for future development. The major challenges are: Governance – Problems of security, maintenance of law and order and poor service delivery to meetexpectations. Corruption - Corrupt practices, poor accountability and transparency in the public and privatesectors. Overdependence on oil and gas – Leading to neglect of agriculture, commerce, industry and othernon-oil sectors.45

INFORMATION ON DELTA STATE Inadequate power supply – Imposing major constraints on social and economic activities. Environmental pollution and degradation – Resulting in adverse effects on health, environmentand biodiversity. Transport infrastructure – There are inadequate motorable roads and limited inter-modal transportlinkages. Narrow industrial base – Limited infrastructural facilities and enabling environment to facilitaterapid industrialisation process. Unemployment – Which fuels restiveness, conflict and threat to security, law and order especiallyamong the youths. Funding - Poor funding to execute critical projects. Social values, attitudes and conflict – Decline in moral values, greed and self- aggrandisement. Constraining federal laws and regulations – These deprive the State of the opportunities ofoptimally using its resources (including crude oil and gas) to create wealth and serve as disincentiveto investors, limiting investment opportunities and contributing to high cost of doing business. Inadequate housing - Short supply of housing units and basic amenities.All of these challenges are being tackled by the State Government in order to maximize the developmentpotentials of the State.Environmental DegradationThe physical environment of the State exhibits a number of trends: biodiversity loss, declining air and waterquality, poor waste management and unsustainable agricultural practices. Activities of oil and gas companieshave caused considerable pollution and environmental degradation in oil producing communities.Delta State Revenue ProfileThe State has historically been mainly dependent on oil and gas revenues, deriving over 85% of her totalannual revenue from FAAC. The table and figure below shows that revenue from FAAC to the Stateincreased by 84% from N95 billion in 2005 to N175 billion in 2008 but fell by 11.5% to N155 billion in 2010due to the lower world crude oil prices, global economic meltdown and crisis in the Niger Delta area whichreduced the State’s oil production figures.The State’s Internally Generated Revenue (IGR) accounts for less than 15% of total revenue. However, itincreased by 135% from N11 billion in 2005 to N26 billion in 2010. It is important to note that the IGRderives mainly from taxes on salary incomes from the oil and gas sector.46

INFORMATION ON DELTA STATETable1.3 Delta State Revenue from FAAC and IGR (N’ million)Period Revenue from FAAC IGR2005 91.26 12.462006 114.92 12.602007 93.94 11.992008 158.26 17.422009*2010147.35119.7420.3619.29*2010 FAAC and IGR figures are as at September 30Source: Reporting Accountant’s ReportFigure: FAAC Revenue and IGR of Delta State (N’ billion)47

INFORMATION ON DELTA STATEBrief Profile of the Executive Council MembersThe Delta State Executive Council is headed by His Excellency, Dr. Emmanual Eweta Uduaghan. The profileof each member of the Delta State Executive Council are stated below:Dr. Emmanuel Eweta Uduaghan – Executive Governor, Delta StateDr Uduaghan was born on 22 nd of October 1954. He attended United First Baptist Primary School, Ogharefe,from 1961-1966, Federal Government College, Warri, from 1968 to1974 and the University of Benin from1975-1980 where he graduated as a medical doctor. Dr. Uduaghan practised as a medical doctor with varioushospitals both within the public and private healthcare system between 1983 and 1999, before joining theDelta State Government as Commissioner for Health in 1999.He was the Secretary to Delta State Government from 2003 to 2007, when he succeeded former GovernorJames Ibori as the Governor of Delta State. He was re-elected in April 2011 and sworn-in on May 29, 2011 fora second term. He has received numerous awards including Central Bank of Nigeria Award on Micro-Creditfor 3 consecutive years (2008, 2009 & 2010), most outstanding Commissioner in South-South as Delta StateCommissioner for Health, Kwame Nkruma Leadership Award, Thisday Newspaper Award on Infant andMaternal Mortality Programme.Professor Amos Agbe Utuama, SAN – Deputy Governor of Delta StateProfessor Utuama was born on 5 th June, 1947. He graduated with LL.B (Hons.) from the University of Lagosin 1977; he obtained a PhD. in 1990. He has won several awards and had taught at the University of Lagos,rising through the ranks up to becoming a professor. He was appointed Attorney General and HonourableCommissioner for Justice in 1999, a position he held till 2007 when he resigned to contest the generalelections as running mate to Dr. Emmanuel Eweta Uduaghan. While serving as Attorney General andHonourable Commissioner for Justice, he served on numerous State Councils and committees among whichare the Delta State Executive Council, 1999 to 2003, Delta State Security Council, 1999 to 2003 and DeltaState Boundary Committee. In 2007, he became the third Deputy Governor of Delta State.Professor Utuama has to his credit over 74 publications that have contributed to the body of knowledge in thelegal profession. His contribution to national service in both professional and official capacities spans a hostof offices, bodies and committees.Charles Amajuoritse Ajuyah SAN-Honourable Commissioner for Justice and Attorney GeneralCharles Amajuoritse Ajuyah was born on the 24 th of May 1960. He graduated with a Bachelor of ScienceDegree in Business Administration from the University of Lagos in 1983. He furthered his academic pursuitby proceeding to University of Benin, from where he graduated with a Bachelor of Law degree in 1987 andwas called to the Nigerian Bar in 1988.He commenced his working career with the Law firm of T.J. Onomigbo Okpoko & Co, where handled casesinvolving Constitutional law, Revenue and Tax Laws, Environmental & Industrial Laws and Administrativelaw. He has been a partner in firm since 1989. He was appointed and sworn in as Notary Public for Nigeria in2000 and was elevated to the rank of Senior Advocate of Nigeria in 2008. In 2009, he was appointedCommissioner, Tax appeal Tribunal for the South South zone of Nigeria He was appointed the AttorneyGeneral and Commissioner for Justice in July 2011.48

INFORMATION ON DELTA STATEMr. Bernard Oboatarhieyeren Okumagba – Honourable Commissioner for FinanceMr. Okumagba was born on the 7 th of April, 1967. He graduated from University of Nigeria Nsukka in 1987with a B.Sc. in Accountancy (2 nd Class Upper Division). He qualified as a Chartered Accountant in May 1991.Mr. Okumagba started his banking career with Oceanic bank in 1991, where he worked in the FinancialPlanning & Budget and Credit & Marketing Divisions. He left Oceanic Bank in 1994 to join Crystal Bank ofAfrica Plc as a Deputy Manager in the Risk Management Division. From 1996 to 2002, he worked withFidelity bank Plc in the Risk Management Division and rose to the position of Senior Manager, CorporateBanking Division. He joined UBA in 2004 and left in August 2007 following his appointment asCommissioner in the Delta State Executive Council. He was appointed the Commissioner for EconomicPlanning in August 2007, a position which he held up till November 2010, when he was redeployed asCommissioner for Finance. He was re-appointed Commissioner of Finance in July 2011.RT. Hon. (Chief) Funkekeme Solomon-Honourable Commissioner for WorksRT. Hon. (Chief) Funkekeme Solomon was born on April 21, 1962. He obtained a Bachelor of Arts degree inEnglish and Education from Bendel State University, Ekpoma in 1989 and a Master of Science in CorporateGovernance from Leeds Metropolitan University, UK in 2010.He commenced his career as a lecturer in the Department of English, College of Education, Warri. In 1992,he served as Chief Press Secretary to the pioneer Speaker Delta State House of Assembly and later worked asa media consultant. In 1999, he was elected member Delta State House of Assembly (Burutu II), where heserved 3 consecutive terms uptill 2011. While in the house, he held various appointments, including MinorityLeader (1999-2003), Chairman-Arts and Culture Committee (2005 to 2007), elected deputy speaker of theHouse of Assembly ( 2007-08) and was also the Chairman Public Accounts Committee (2008-11). He wasappointed the Commissioner for Works in July 2011.Dr. Joseph Sisanmi Otumara –Honourable Commissioner for HealthDr. Otumara was born on the 16 th of December, 1960. He graduated as medical doctor from the University ofLagos in 1988.He commenced his career as Medical Officer, General Hospital Jahun, Jigawa State in 1989 before becominga Medical Officer in charge of Birch Hospital, Warri. He founded Alpha Clinic in 1993 and was the MedicalDirector up until 2008. While in medical practice, he also took up political positions; he was the Chairman,Warri –South Local Government between 1996 and 2002 and also occupied various political positions underthe regime of Chief James Ibori. He became commissioner for housing in 2006 and later the Commissionerfor Health from 2007 to May 2011. Dr. Otumara has won many awards which include Merit Award andCertificate of Excellence as Local Government Chairman of the year in year 2000, Merit Award by theGrassroots Hall of Fame as the most outstanding Local Government Chairman of the year in 2001. He wasre-appointed the Commissioner for Health in July 2011.Chief (Mrs) Betty Oghometite Efekodha – Honourable Commissioner for Women affairsChief (Mrs) Efekodha was born on 5 th May 1955. She graduated with a National Certificate in Education fromCollege of Education, Warri in 1983 and later obtained a Bachelor’s degree in EducationAdministration/English from the University of Port-Harcourt in 1990. She is a Fellow of the CharteredInstitute of Administration of Nigeria and Institute of Corporate Administration of Nigeria.She commenced her over 25 years of teaching at Torufa Primary School in 1977 and ended it at College ofCommerce, Warri in 2002, and then commenced her political career. She served in various capacities withinthe Peoples Democratic Party in Delta State including-State Co-ordinator, Women for Change Initiative;49

INFORMATION ON DELTA STATEDirector, Women Mobilization Uduaghan Campaign; member, PDP Gubernatorial Campaign Organisation –Delta South Senatorial District. She was appointed Special Adviser to the Governor of Delta State on WomenDevelopment in 2007 and held the position till 2011. She was appointed the Commissioner for WomenAffairs in July 2011.Hon.Dr. Chris Oghenechovwen-Honourable Commissioner for Water ResourcesHon.Dr. Chris Oghenechovwen was born on the 22 nd of July 1957. He graduated as a medical doctor fromUniversity of Ibadan in 1982.He commenced his working career with Jos University Teaching Hospital (JUTH) in August 1982 and did abrief stint at Police Command, River State (as a corper) and in private practice before returning to JUTH in1985, where he was till 1992. He was with Delta State Hospital Management Board from 1992 to 1997 andEffurun clinic, Effurun from 1997 to 1999, from where he joined politics. He was appointed SpecialAssistant to Hon. Commissioner for Health and held this position from 1999 till 2002. He was Director ofYouth Mobilisation, Ibori Campaign Organisation (2002-3), Member, House of Representatives (2003-07) andState Director of Protocal (2007-09) In 2009, He was appointed Commissioner for Water ResourcesDevelopmentand was re-appointed to the same post in July 2011.Sir Patrick Othuke Ferife- Honourable Commissioner for Lands, Survey & Urban DevelopmentSir Patrick Othuke Ferife was born on the 18 th of March 1964. He graduated with a Bachelor of Pharmacydegree in 1988 and a Master of Business Administration degree in 1998 from the University of Benin.He commenced his working career with Roche Nigeria Limited as medical/sales representative in 1992. Andserved in various capacities till 1999. He was Managing director of D-Glopa Nigeria Limited between 1999and 2003. He commenced his political career with an appointment to the Board of Directors HospitalManagement Board, Delta State as a member in 2003 and held this position till 2006. He was later appointedChairman Board of Directors, Delta State Printing and Publishing Company (2006-7) and Special ProjectDirector, Ughelli Asaba Dualisation project (2008-11). He was appointed the Commissioner for Lands, Survey& Urban Development in July 2011.Mr. Omare Frank –Honourable Commissioner for EnvironmentMr. Omare Frank was born on November 15 th , 1967. He graduated with a B.Sc. in Banking & Finance fromRivers State University of Science and Technology in 1998 and a post graduate diploma in PublicAdministration from University of Benin in 2004.In 1999, he was the Personal Assistant to the Governor on Youth Development, Delta Sate, a post he helduntil 2003, when he was promoted to Senior Special Assistant to the Governor on Youth Development. In2006, he was appointed Honourable Commissioner Bureau for Special Duties. In 2007, he was chairman ofcampaign mobilization for the Peoples Democratic Party (PDP), Delta State. In 2008, he was chairman, AsabaCapital Beautification and Sanitation Task Force. That same year, he became Chairman, Delta State WasteManagement Board. In 2009, he became the Commissioner for Housing, a position he held till May, 2011. Hewas appointed the Commissioner for Environment in July 2011.Hon. (Barr) Misan Raphael Ukubeyinje-Honourable Commissioner for Agriculture & NaturalResourcesHon. (Barr) Misan Raphael Ukubeyinje was born on the 30th of May 1967. He graduated with a Bachelor ofLaw (LL.B) from Bendel State University, Ekpoma in 1991 and was enrolled as Barrister & Solicitor of theSupreme Court of Nigeria in 1992.He commenced his legal practice with Addi Beji & Co (1993-94) after doing his mandatory 1 year NationalService with P.A.O Olorunnisola & Co (SAN) between 1992 and 1993. He later worked for Eyewu Oritsejafor& Co between 1994 and 1995 before joining Arenyeka & Ukubeyinje in 1997.He quitted legal practice in 2001 to contest election into the Delta State House of Assembly and was reelectedfor another four years in 2003. He served in different capacities between 2007 and 2011 within theState People Democratic Party hierarchy. He was appointed the Commissioner for Agriculture and NaturalResources in July 2011.50

INFORMATION ON DELTA STATEProfessor Patrick Muoboghare-Honourable Commissioner for Basic/Secondary EducationProfessor Patrick Muoboghare was born on the 29th of May 1952. He graduated from University of Ibadanwith a Bachelor of Education (1981), a Master of Education in 1983 and Ph.D in 1986. He is a member of theNigeria Association for Physical, Health Education, Recreation, Sports and Dance (NAPHER-SD) andNational Association of Sports Science and medicine (NASSM).He commenced Teaching and Administration since 1981. He has held several key appointments in the courseof his academic career and they include: member of the Delta State University Governing Council from 1993-97 and 2001 to date, and the Chairman, Academic Staff Union (DELSU-Abraka Chapter) from 1991-95 and2005-09. He has been a member of the Delta State University Senate from 1999 to date and the Chairman,Governing Council, College of Education, Agbor since 2010. He was appointed the Commissioner for Basicand Secondary Education in July 2011.Barrister Christopher Chike Ogeah-Honourable Commissioner for InformationBarrister Christopher Chike Ogeah was born on the 23rd of October 1961. He graduated from University ofLagos with a Bachelor of Psychology degree in 1983 and a Bachelor of Law degree in 1988. He was enrolledas Barrister & Solicitor of the Supreme Court of Nigeria in 1990.In 1999, he was appointed Special Assistant to the Chief Economic Adviser to the President (NationalPlanning Commission). He practiced law with the firm of Chike Ogeah and Co between 2001 and 2003 andwent back to work as a Special Assistant to Chief Economic Adviser to the President in 2004. He was also theNational Coordinator of State Economic Empowerment Development Strategy between January 2004andAugust 2005. He was the Managing Director/CEO of Skyway Aviation Handling Company from JuneDecember 2010 till May 2010 and a Director from June 2010 uptill April 2011. He was appointed theCommissioner for Information in July 2011.Dr Tony Felix Emeka Nwaka –Honourable Commissioner (Bureau for Special Duties)Dr. Tony Felix Emeka Nwaka was born on 6th May 1965. He graduated with a Bachelor of Arts degree inHistory from the University of Lagos in 1987 and a Masters degree in Political History (2005) as well as a PhDin Social History (2009) from the Nnamdi Azikiwe University.He commenced his career as Principal Personnel Assistant, Civil Service Commission (Bendel State) betweenfrom 1989 to 1991. In 1992 he transferred to the newly created Delta State as a protocol officer, andsubsequently held various political offices until 2007, when he was appointed Hon. Commissioner for LocalGovernment Affairs. In 2010, he was re-deployed to Ministry of Agriculture and Natural Resources asCommissioner and again redeployed to Ministry of Education as Commissioner in the same year, a position heheld till May 2011. He was appointed the Commissioner (Bureau for Special Duties) in July 2011.Mr. Ebifa Olisaelika Ijoma-Honourable Commissioner for Special Duties (Youth Affairs)Mr Ebifa Olisaelika Ijoma was born on the 17th of September 1977. He graduated with a Bachelors degree inEconomics from the University of Abuja in 2001.He commenced his working career with Vine Impex (W/A) Ltd in November 2002. He worked forECOBANK Nig Plc from 2006 to 2009, performing different functions within the operations unit and themarketing unit. He joined Oceanic Bank as an officer in January 2009 and functioned as the Assistant BranchManager, (Mazfallah Branch) Karu-Abuja, from where he resigned in August 2009. He joined the Delta StateGovernment in January 2010 as Special Assistant (Special Duties) to the Executive Governor of Delta Stateand was later promoted to Senior Special Assistant in February 2011. He was appointed the Commissioner forSpecial Duties (Youth Affairs) in July 2011.51

INFORMATION ON DELTA STATEPaulinus Akpeki –Honourable Commissioner for HousingMr. Akpeki was born on the 19 th of January, 1953. He graduated from Dublin College of Technology with aHigher National Diploma in 1975 and a B.Sc. in Business Administration from University of Lagos in 1986.He commenced his career as Planning Officer with the Federal Ministry of Education in 1979. His politicaland public office career started in 1981 when he became Youth Leader of Unity Party of Nigeria (UPN),Bendel State and later elected an Hon. Member of the Federal House of Representatives in 1983. He wasSpecial Adviser on Information between January 1992 and November 1993. Between 1994 and 2010, he hasheld several political and public office which includes delegate to National Constitutional Review Committee(1994-95), Political Assistant to the Head of State (1997-98), Deputy Chairman, Nigeria Railway CorporationBoard (1999-04). In November 2010, he was appointed the Hon. Commissioner for Orientation andCommunication a position he held uptil May 2011. He was appointed the Commissioner for Housing in July2011.Prof. Eghagha Oghenererukevbe Hope– Honourable Commissioner for Higher EducationDr Eghagha was born on 4 th September 1959. He graduated from the University of Jos with a Bachelorsdegree in Theatre Arts in 1982, a Masters degree in English (1985) and a Doctor of Philosophy degree (1994)both from the University of Lagos.He commenced his teaching career with the University of Lagos as a Graduate Assistant in 1985 and had astint with Ondo State University (1988-92) before returning to University of Lagos, where he was promoted tothe rank of a professor in 2010. During the course of his academic career, he held various administrative, andcommunity service positions; and also served as a consultant and resource person.. He has severalpublications and award to his name.He has been a member of the Delta State Vision 2020 steering committee since 2009. Dr Eghagha wasappointed Commissioner for Higher Education, Delta State from January 2009 to May 2011 and was reappointedto the same post in July 2011.Hon. Benson Igbakpa-Honourable Commissioner for TransportHon. Benson Igbakpa was born on the 28 th of August 1966. He graduated with a Bachelor of BusinessAdministration Degree in 2004 and a Master of Public Administration Degree in 2009, both from Delta StateUniversity, Abraka.Before he joined politics in 2001, he has had 14 years of work experience, with organisations that includesChemiron International Limited and Vego Products Limited. He was an executive officer in the governor’soffice before his election as an Honourable member into the Delta State House of Assembly, where served asdeputy chief (2007-08) and deputy majority leader from 2008 till 2011. He was appointed the Commissionerfor Transport in July 2011.Mrs. Orezi Esievo – Honourable Commissioner for Special InfrastructureMrs. Esievo was born on April 10, 1969. She graduated from the University of Benin with a Bachelor of Lawdegree in 1989 and was called to the Nigerian Bar in 1990.She commenced her working career in 1992 with Public Finance Group in 1992 and moved to Commercial &General chambers, as a solicitor and advocate. She was with Orezi Amagada between 1996 and 2000, whenshe became media relations supervisor and community relations officer with The Shell Petroleum CompanyNigeria Limited, western division, Warri. In 2006, she was appointed Hon. Commissioner for Culture andTourism, Delta State. In 2008, she was appointed Hon. Commissioner for Special Duties, a position she heldtill 2011. She was appointed the Commissioner for Special Infrastructure in July 2011.Dr. Anthonia Ifeanyi Ashiedu- Commissioner for Special Duties, Poverty AlleviationDr. Anthonia Ifeanyi Ashiedu was born in Talata Mafara, Zamfara State.She graduated from the University ofIbadan in 1978 with a Bachelor of Education degree, she obtained a Master of International Law and52

INFORMATION ON DELTA STATEDiplomacy from the University of Lagos in 1988 and obtained a PHD in Political Science from the Universityof Abuja in 2003.Dr Ashiedu has served in several capacities both at the State and Federal levels of Government, some ofwhich includes serving as a member of the committee that formulated the Nigerian National Povertyalleviation Policy in 1997. Her service to the nation spans about 33 years and She was first appointed asCommissioner for Special duties in charge of Micro Credit in 2010. She was appointed the Commissioner forSpecial Duties, Poverty Alleviation in July 2011.Comrade Gloria Okulugbo-Honourable Commissioner for Multilateral Relations, AbujaComrade Gloria Okulugbo was born on the 15 th of March 1969. She graduated from the University of Jos in1992 with a degree in Theatre and Communication Arts, She also obtained Msc. in International Relationsfrom the same university in 2003. She is currently pursuing a Doctorate degree in International Relations fromthe University of AbujaShe served as Personal Assistant (Admin) to the Presidential adviser/Liaison Officer, National Assembly(House of Reps) Presidency Abuja from 1999 to 2002.She was appointed the Commissioner for MultilateralRelations/Abuja in July 2011.Mr Kingsley Eze Emu-Honourable Commissioner for Commerce & IndustryMr Kingsley Eze Emu was born on the 27 th of December 1959. He holds a Bachelor of Science Degree inSociology and a Masters degree in Industrial Sociology from the University of Ibadan in 1986 and 1988respectively. He also obtained a Masters in Business Administration from ESUT Business School in 1997.Mr. Kingsley has over 20 years banking experience, part of which he served as aSenior Executive with FinbankPlc. He was a Partner at Kame Benefits Ltd until 2010.He was appointed the Commissioner for Commerce &Industry in July 2011.Barrister Neworld Safugha-Honourable Commissioner for Special Duties, Local Government &Chieftaincy AffairsBarrister Neworld Safugha was born on the 17 th of January 1967. He graduated with a Bachelor of Law LL.B(Hons) from the University of Jos in 1999 and was enrolled as Barrister & Solicitor of the Supreme Court ofNigeria in 2002.In 2002, he became the Legal Adviser, Peoples Democratic Party, Bomadi L.G.A chapter and was made thecoordinator of Delta South Senatorial District Electoral Campaigns. He served as Confidential Secretary toFormer Speaker, RT. Hon (Engr.) Franc P. Enekorogha from 2006 to 2007. He was appointed theCommissioner for Special Duties, Local Government and Chieftaincy Affairs in July 2011.Richard Mofe-Damijo –Honourable Commissioner for Arts & CultureBarrister Mofe-Damijo was born on July 6 th 1961. He graduated from the University of Benin with B.A inTheatre Arts in 1983. He later obtained a Bachelor of Law degree from the University of Lagos in 2004 andwas called to the bar in 2005.Prior to his appointment into political office, Barrister More-Damijo has had over 20 years experience inJournalism and Acting. He was an Executive Director at Classique Magazine from 1989 to 1992 and thePublisher/Editor-in-Chief of Mister Magazine from 1992 to 1995. He was President/CEO of White WatersLimited from 1995 to 2008. Barrister Mofe-Damijo is a member of the Actors Guild of Nigeria, NigerianInstitute of Public Relations, Nigerian Institute of Management and was the pioneer president of the NigerianTheatre Arts Practitioners.He was appointed Special Adviser to the Executive Governor of Delta State in 2007 and later appointed Hon.Commissioner Culture &Tourism in 2009 a position he held till May 2011. He was re-appointed to the sameposition in July 2011.53

INFORMATION ON DELTA STATEMr. Ifeanyi Micheal Osuoza–Honourable Commissioner, Directorate of Project MonitoringMr. Osuoza was born on the 19 th of January 1967. He graduated with a National Diploma from AuchiPolytechnic in 1989, a Bachelor of Art in International Relations (2004) and a Master of Science in StrategicStudies (2010), both from Ambrose Alli University-Ekpoma.He commenced his career as an Operations Officer with Allied Bank of Nigeria Plc in 1990 and from therejoined Texas Armoring Global Limited in 1995 for 4 years. He was Chief Executive Officer of Tac ArmoringGlobal Limited from 1999 till date. He also served on the Delta State Land Use and Allocation Committeefrom 1998 till 2011. He was appointed the Commissioner , Directorate of Project Monitoring in August 2011.Mr. Pirah Joseph Omamofe-Honourable Commissioner for Special Duties (Oil & Gas)Mr. Pirah was born on the 24 th of February 1967. He graduated with a Bachelor of Science in Sociology andAnthropology in 1998 from University of Benin and later obtained a Masters of Arts in Peace and ConflictStudies in 2007 from University of Ibadan.He founded Pi-Moff Resources Nigeria Limited, a marine consultancy and engineering firm in 2001 andserved as the Managing Director from birth till 2011. He commenced his political career as Secretary to WarriSouth West Local Government Council in 2002. Between 2003 and 2006, he was member of the GoverningBoard, NYSC Delta State and became special Assistant to the Governor of Delta State on Community Affairsbetween 2006 and 2007. He served as Member of Governing Board, Delta State Institute of ContinuingEducation from 2008 to May 2011. He has been the Chairman of Itsekiri Regional Development Committeesince 2006. He was appointed the Commissioner for Special Duties (Oil & Gas) in August 2011.Mr. Emetulu Charles Chukwuemeke- Honourable Commissioner for EnergyMr. Emetulu was born on the 26 th of October 1966. He graduated with a National Certificate in Education in1987 from Bendel State University and with a Bachelor of Art in Education in 1992 from Bendel StateUniversity.He commenced his working career as a tutor with Joemax commercial College, Port-Harcourt (1988-89). Hewas Operations Manager, IFEM Nigeria Limited, Port-Harcourt from 1995 to 1998. He has been theManaging Director, Fields of Gold Enterprises since 1998. He served as a Political Aide to the Hon.Commissioner, Commerce and Industry from 2003-2005 and was appointed a Member, Delta State PostPrimary Education Board (2008-10). He was appointed the Commissioner for Energy in August 2011.Mr. Onogba Oghenekewe Christian-Honourable Commissioner for Special Duties (NDDC/BracedCommission Liason)Mr. Onogha was born on the 27 th of March 1973. He graduated with a Bachelor of Public Administration/Political Science from University of Benin in 2006.He commenced his political career as Secretary, Ethiope West Local Government Council between 2001- 02.He was made State Assistant Secretary of People’s Democratic Party in 2007 and he later served SpecialAssistant to the Honourable Commissioner, Ministry of Housing, Delta State. He was appointed theCommissioner for Special Duties (NDDC/Braced Commission Liaison) in August 2011.Mrs. Queen Nkem Ikenchukwu-Honourable Commissioner for Millennium Development GoalsMrs. Ikenechukwu was born on the 17 th of January 1960. She graduated with a Bachelor of Arts Humanities(Majoring in Psychology) from Thames Valley University in 1986. She has attended several trainings inpsychology related areas and is licensed practitioner in neuro-linguistic programming.She has extensive social work experience garnered both in Nigeria and the United between 1990 and 2007.Some of the appointments she held during the period includes: Welfare Officer with the Nigerian Embassy(1991-95), Addiction Counsellor with RAPT HM Prison, Surrey UK and various clinical positions with StLuke Drug/Alchohol Rehabilitation Centre, UK between 1998 and 2007.She founded the Agbor Youth and Women Development, Learning and Empowerment Centre in 2007 andwas appointed a member Delta state Transition Committee, set up by His Excellency, Dr. Uduaghan in April54

INFORMATION ON DELTA STATE2007. She served as the Honourable Commissioner for Women Affairs, Community and Social Developmentbetween August 2007 and May 2011. She was appointed the Commissioner for Millennium DevelopmentGoals in August 2011.Mr. Kenneth Oghenerhoro Okpara-Honourable Commissioner for Economic PlanningMr. Okpara was born on the 8 th of February 1962. He graduated with a Bachelor of Science degree inAccountancy from University of Maiduguri in 1987 and a Master in Business Administration degree fromCambridge University in May 2011. He is a Fellow of Institute of Chartered of Nigeria, Fellow of theChartered Institute of Taxation of Nigeria and a Microsoft Certified System Engineer (MSCE).He commenced his working career with Eyewunmi Rone & Co in 1989 as an Audit Assistant and rose to theposition of a Partner in 1995. He quitted Eyewunmi Rone & Co in 1998 to become Managing Consultant atInter Consult and left in June 2005 to take up the role of Financial Management Consultant with the WorldBank. He was promoted to Senior Financial Management Specialist in June 2006 and he held the post heuptill July 2011. He was appointed the Commissioner for Economic Planning in August 2011.Hon. Princess Pat. Ajudua-Honourable Commissioner for Special Duties (Public Works)Hon. Pat Ajudua was born on the 7 th of April 1962. She graduated with a Bachelors of Art degree inPhilosophy from University of Lagos in 1984 and a Bachelors of Law degree from Lagos State University in1992. She attended the Nigerian Law School and was called to the Bar in 1995. She further obtained aMasters of Law degree from the University of Lagos in 1997 and an MBA (Banking and Finance) in 2004. Sheis a member of the Chartered Institute of Arbitrators, International Bar Association and InternationalFederation of Female Lawyers. Hon. Pat Ajudua has many chieftaincy titles and awards to her name.She has been actively involved in business with interest in fashion, banking and manufacturing, in addition toher legal practice. She was the chairman of both Umejei Microfinance bank, Ibusa and Ngegwe MicrofinanceBank, Eleme from 1995 to 2007. She was elected as a Honourable Member into the Delta State House ofAssembly for the term 2007-2011 and was also the Minority Leader during this period. She was appointedthe Commissioner for Special Duties (Public Works) in August 2011.Mr. Ayibatonye Alari Timi- Honourable Commissioner for Specal Duties (DESOPADEC)Mr. Ayibatonye was born on the 9 th of August 1962. He graduated with a Bachelor degree in Sociology fromUniversity of Ibadan in 1987 and a Master in Public Administration degree from Lagos State University in1998.He commenced his post-degree career as a Manager with Crescent Hospital, Ibadan from 1988 to 1990. Hewas with Nigerian Drug Law Enforcement Agency (NDLEA) from September 1990 to October 1997 andmoved to1st Marine Shipping Company, Apapa as an Administrative Officer, where he was till December2002. He served has a Lecturer with Niger Delta University, Wilberforce Island from January 2003 uptil April2004 when he was appointed Chairman, Delta State House of Assembly Service Commission, a position heheld for 7 years. He was appointed the Commissioner for Special Duties (DESOPADEC) in August 2011.Comrade Ovuozourie Macaulay- Secretary to the Delta State GovernmentComrade Ovuozourie Macaulay was born on the 25th of October, 1960. He attended the National Institutefor Public Information, Kaduna, the Institute of Management & Technology, Enugu, and the Enugu StateUniversity of Science & Technology. Before his appointment as a commissioner in Delta State, he worked asPublic Enlightenment Assistant with the Federal Department of Information and was Controller, News andCurrent Affairs, Delta Broadcasting Service, Asaba. He was also a labour activist and held many offices in theLabour Union amongst which are Secretary, Nigerian Union of Journalist, Bendel State, Pioneer Chairman,Nigerian Union of Journalist, Delta State, Chairman, Nigeria Labour Congress Delta State Council (1993 –2003) and Caucus Member, National Executive Council, Nigeria Labour Congress. He has also had specializedsecurity training in countries like Israel and the United Kingdom, amongst others. He was the immediate pastCommissioner for Power and Energy, Delta state, before his appointment as Secretary to the StateGovernment in June 2011.55

RISK AND MITIGATING FACTORS FOR THE PROGRAMMEThere is a degree of risk involved when investing in securities. Prospective investors should therefore carefully consider the risks described belowas well as the detailed information set out elsewhere in this Prospectus before making a decision regarding a purchase of the Bonds. Any of thefollowing risks could result in a material adverse effect on the State’s financial condition, results of operations and ability to the Bonds. Therisks may also have a material adverse effect on the revenue, costs and other estimates and assumptions underlying the financial projectionsshown in this Prospectus, causing actual operating results to be materially lower than those indicated in the financial projections. The risksdescribed below are not the only risks facing either the securities or the Issuer. Additional risks and uncertainties not presently known to theIssuer or that the Issuer currently considers immaterial may also materially and adversely affect the securities. Investors should reach their ownviews or obtain such professional advice as they deem appropriate, before making a decision in respect of the Bonds.Macroeconomic risks1. Inflation risk: There is a risk that the rate of price increases in the economy deteriorates the returnsassociated with the Bond. Fixed rate bonds are most susceptible to this due to coupon being fixed atinception based upon expectations of the inflation rate. Inflation erodes the purchasing power of thecurrency thereby diminishing the real income of the bondholder.Mitigating Factors: A central role of the Central Bank of Nigeria, like its counterparts in othercountries, is containment of inflation. The CBN has adopted an inflation targeting framework. It isexpected that this method will keep inflation at a level that is in line with the assumptions built intothe coupon rate attached to this bond.2. Interest rate risk: There is an inverse relationship between bond prices and interest rates, thus, thereis a risk that bond prices will fall as interest rates rise. By buying a bond, the bondholder hascommitted to receiving a fixed rate of return for a fixed period. Should the market interest rate risefrom the date of the bond's purchase, the bond's price will fall accordingly. The bond will then betrading at a discount to reflect the lower return that an investor will make on the Bond.Mitigating Factors: Investors who hold their bonds to maturity will not be exposed to this risk asthe state government will redeem the bonds at par. Investors who dispose their bonds may beexposed to a variation in the principal amount received due to these fluctuations. However, marketinterest rates are a function of several factors such as the demand for, and supply of, money in theeconomy, the inflation rate, the stage of the business cycle as well as the government's monetary andfiscal policies. The CBN has successfully maintained a stable interest rate regime over the past decade.It is expected that this policy will be maintained thereby mitigating this risk.3. A decline in the price of crude oil: The sale of crude oil provides a significant proportion of theFGN’s earnings. Crude oil prices are volatile due to business cycle and the concentration of suppliesin regions that are politically explosive. The booms & busts experienced in the oil industry haveusually hit Nigeria hard because of the country’s mono-product economy. A decline in the price ofcrude oil will reduce the funds available for distribution via the FAAC account. The State, like most ofthe other Nigerian States is heavily reliant on the FAAC account, as its main source of revenue, andwill experience a drop in revenue with a decline in the price of crude oil.56

RISK AND MITIGATING FACTORS FOR THE PROGRAMMEMitigating factor: The price of crude oil is beyond the control of Delta State Government.However, the Issuer is intensifying its drive to stimulate economic activity within the State; thesuccess of this will increase its IGR thereby somewhat mitigating any shortfall from the federalaccount.Political risks1. Sovereign risk: Delta State is a constituent part of Nigeria. The principal repayment source for theBonds is the allocation from the FAAC account while the Bonds are secured principally by the ISPO.Should Nigeria cease to exist or the State cease to be part of Nigeria, the repayment source of theBonds will be severely compromisedMitigating factor: The likelihood of Nigeria ceasing to exist is extremely limited and that of the Stateceasing to be part of the country even more so. This risk is therefore of little threat to the bonds.2. Change of administration in the State: The Bond issue is an initiative of the current Stategovernment. There is a risk that if there is a change in the political leadership of the State, theincoming administration might not carry on with the plan of the current administration. Thus, theproceeds of the offer might be utilised for a purpose different from that stated in the prospectus.Mitigating factor: The State’s House of Assembly has passed a law enabling the offer to proceed.The law contains provisions specifying the utilization of the proceeds. Furthermore, regardless of theadministration in the State, or the use to which the proceeds of the Bond are put, the repaymentsource is from the FAAC account and the state’s IGR. Investors can therefore reasonably expectrepayment of principal and receipt of the coupons due to them.3. Change in the legal and regulatory environment for financial instruments: The issuance of theBonds is based on Nigerian law in effect as at the date of this Prospectus. There is a risk that thestatutory and regulatory environment will change and the policies that have created an enablingenvironment for the issuance of the Bonds will be amended.Mitigating Factor: The Delta State Government and the respective regulatory authorities arecommitted to creating and sustaining an investment-friendly environment governed by stable policies.No assurance can be given as to the impact of any possible judicial decision or change to Nigerian lawor administrative practice after the date of issue of the Bonds.4. Political and regional instability in the Niger Delta region: Oil exportation is the major source ofgovernment revenue to Nigeria and Nigeria’s major oil producing area is the Niger Delta region.There have been disturbances in the region which have affected oil production and thus reduced therevenue accruing to the government in the past.57

RISK AND MITIGATING FACTORS FOR THE PROGRAMMEMitigating Factors: The FGN has deployed political, military and social solutions to the problems in theNiger Delta. These solutions have ameliorated the problems somewhat as reported incidences of sabotagehave dropped and the decline in oil production has reversed. It is expected that the government’s measureswill create a lasting solution that will prevent further disruptions of the revenue stream.Structural risks1. Liquidity risk: There is a risk that when the Bonds are listed, the demand for them will be lowthereby preventing investors from disposing of them easily or at prices that will provide them with ayield comparable to that obtained from other investments.Mitigating factors: The Bonds will be listed on the NSE and dealers will be appointed to providefurther liquidity. Furthermore, an Over-The-Counter market exists for state government bonds, andthe continuous development and deepening of the bond market will help ensure that the Bond hasliquidity. Notwithstanding, the Issuer cannot predict whether an active trading market will develop forthe Bonds. Even if a trading market develops, the Bonds could trade at prices that may be higher orlower than the Issue Price, depending on many factors. However, there currently exists a market forstate bonds especially given the continued growth in the number and financial clout of institutionalinvestors.2. Credit risk: Credit risk is the risk that the principal will not be repaid by the Issuer, thereby triggeringan Event of Default with respect to the Bonds.Mitigating factors: The Bonds are senior-ranking obligations of the State, payable from and securedby a first charge on the state’s revenues. The monthly appropriation from the state’s revenues towardthe debt service obligations in respect of the Bonds to be raised under the Programme is authorizedby a resolution duly adopted by the State House of Assembly, dated May 15, 2011. Projected cashflowsprovide for total debt service coverage. Coupon payments and principal redemptions on BondIssues would be adequately provided for by Sinking Fund balances. The management of the SinkingFund shall be under the independent management of the Trustee.Environmental RiskNatural disasters may have an impact on the expected revenue streams or destroy some of theprojects being constructed by proceeds of the Issue. This may have a negative impact on theprojected cash flows expected to be generated by the State. There may also be negative environmentalimpact of respective projects proposed by the State. There is also the risk associated with thepossibility that the working environment of Delta State civil servants could result to ill health, loss orinjury capable of causing permanent disability which could interfere with the efficient running of theState or which could create liabilities for the State government with material impact on the state’sfinances.Mitigating factor:Environmental impact analyses for prospective projects will be undertaken, negative impact assessedand measures for managing such impact will be proposed and applied. Furthermore, the State is incompliance with all environmental rules and regulations. These standards are constantly updated andenforced by the State to ensure a safe environment for its staff and citizens of the State. The Stateensures that relevant safety rules are adhered to in the execution of all its projects.58

FINANCIAL INFORMATION-HISTORICALLETTER FROM THE REPORTING ACCOUNTANTS59

FINANCIAL INFORMATION-HISTORICALSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIESThe following are the significant accounting policies adopted by the State Government in its preparation ofthe financial statements:1 Basis of Accounting 1The accounts have been prepared under the cash basis of accounting except as modified to accommodatethe disclosure of outstanding long term obligations and investments. This means that transactions arerecorded only when monies are received and paid within the given period, whether or not the receipts andpayments are in respect of goods supplied or services rendered during that period and whether they relateto recurrent or capital expenditure or revenue.2 Investments 3Investments held under Ministry of Finance Incorporated (“MOFI”) are stated at cost. Investments whichform part of Capital Development Fund which are expensed under the cash basis of accounting are restatedand disclosed in the statement of assets and liabilities.3 Long Term Loans 3Long term internal and external loans written off under the cash basis of accounting are re-stated in thestatement of assets and liabilities to accommodate their full disclosure in line with the standardisedreporting format for Federal, States and Local governments4 Capital CostIn line with the cash basis of accounting, capital expenditures are recognised in the year of occurrenceonly. No cumulative value of fixed assets and depreciation are disclosed in the financial statements.1 The State’s historical accounts have been adjusted where stated accounting policies do not align with generally accepted accounting practice for thepublic sector.60

FINANCIAL INFORMATION-HISTORICALSTATEMENT OF ASSETS AND LIABILITIES AS AT:Sept. 2010Dec.2009Dec.2008Dec.2007Dec.2006Dec. 2005Notes N'm N'm N'm N'm N'm N'mASSETSCash & other liquidassets1 17,595(4,623)7,773 11,938 6,800 802Contributory pension yetto be remitted (cash)1,922 10,230 6,456 - - -Other balances 2 - - 649 751 1,312 1,330Investments 3 6,552 5,774 5,774 5,441 24,844 36,316Loans and advances 4 4,208 3,428 2,928 1,637 1,446 2,38730,277 14,809 23,580 19,767 34,402 40,835LIABILITIESCapital developmentfund5 20,335 4,841 13,431 6,827 24,486 30,707Deposit for shares 6 - - - 3,075 - -Special deposit accounts 7 4 4 4 4 4 4Other government funds 9,599 9,599 9,599 9,599 9,599 9,599Treasury clearanceaccounts8 339 365 546 262 313 52530,277 14,809 23,580 19,767 34,402 40,83561

FINANCIAL INFORMATION-HISTORICALSTATEMENT OF REVENUE AND EXPENDITURE FOR THE PERIOD ENDED:Sept2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005Notes N'm N'm N'm N'm N'm N'mREVENUEOpening Balance - - - - - -StatutoryAllocationInternallyGeneratedRevenue119,739 147,351 158,257 93,940 114,915 91,2609 19,286 20,358 17,420 11,997 12,607 12,464Miscellaneous 18 1,331 160 266 130 55Total Revenue 139,043 169,040 175,837 106,203 127,652 103,779EXPENDITUREConsolidatedRevenue ChargesOther RecurrentExpenditure1,998 1,968 1,494 4,969 2,895 1,34610, 14 73,044 75,431 66,297 72,356 64,315 53,02375,042 77,399 67,791 77,325 67,210 54,369Surplus/(Deficit) ofRevenue overExpenditureLoan Repayments(Public Debt Charges)64,001 91,641 108,046 28,878 60,442 49,410(7,267) (7,861) (9,933) (9,794) (48,682) (14,521)Balance 56,734 83,780 98,113 19,084 11,760 34,889Transfer to CapitalDevelopment Fund(56,734) (83,780) (98,113) (19,084) (11,760) (34,889)Closing Balance - - - - - -62

FINANCIAL INFORMATION-HISTORICALNOTES TO THE ACCOUNTS1. Cash and other liquid assetsSept.2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mCurrent and otherAccounts17,255 (1,620) 7,227 11,676 19,393 (1,832)Deposit Account - - - - (12,593) 2,634Treasury ClearanceAccountsAdjustments forrepetitions340 364 546 262 - -- (29) - - - -Unpresented cheques - (3,338) - - - -17,595 (4,623) 7,773 11,938 6,800 8022. Other balancesThis represents the unamortised portion of the revenue bond issued by the State Government in 2001.3. InvestmentsSept.2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mQuoted Investments 918 918 918 893 14,559 14,491Unquoted Investments 5,634 4,856 4,856 4,548 10,285 21,8256,552 5,774 5,774 5,441 24,844 36,31663

FINANCIAL INFORMATION-HISTORICALNOTES TO THE ACCOUNTSInvestments were stated at cost in the aforementioned years. Investment management is under the purview ofthe Ministry of Finance Incorporated (MOFI), an agency established by the State Executive Council.4. Loans and advancesSept.2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mOpening balance 3,428 2,928 1,636 1,256 940 1,821Add: Movement for theyear780 500 1,292 381 506 566Closing balance 4,208 3,428 2,928 1,637 1,446 2,3875. Capital expenditure & development fundSept.2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mOpening balance 4,841 13,431 6,827 24,486 30,707 23,235Transfer from CRF 56,734 83,780 98,112 19,084 11,760 34,888Profit on sale of investments - - 3,075 - - -Capital Receipts (5.1) 15,598 5,856 15,867 36,559 47,999 18,75577,173 103,067 123,881 80,129 90,466 76,878Less:Capital Expenditure (5.2, 12) (56,838) (98,226) (110,450) (73,302) (65,980) (46,171)Closing balance 20,335 4,841 13,431 6,827 24,486 30,70764

FINANCIAL INFORMATION-HISTORICALNOTES TO THE ACCOUNTS5.1 Capital receiptsSept.2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mValue Added Tax 5,598 5,856 5,078 4,046 3,276 2,659Internal Loans 10,000 - - 22,000 29,700 16,096External Loans - - 1,856 - - -Other capital receipts - - 8,933 10,513 15,023 -15,598 5,856 15,867 36,559 47,999 18,7555.2 Capital expenditureSept.2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mEconomic Sector 18,552 24,935 25,700 22,692 22,946 12,573Social Sector 4,624 9,070 10,570 9,694 15,445 12,915Environmental Sector 15,301 26,558 32,894 20,786 19,832 15,892General Admin. Sector 5,041 9,755 8,798 5,240 7,757 4,791Contingency 9 49 - - - -DESOPADEC 13,311 27,859 32,488 14,890 - -TOTAL 56,838 98,226 110,450 73,302 65,980 46,1716 Deposit for sharesThis represents payments made at the end of the year for shares which were subsequently transferred inthe first working week of the following year.65

FINANCIAL INFORMATION-HISTORICALNOTES TO THE ACCOUNTS7 Special deposit accountThis represents amounts held in trust by the State for pending court cases.Sept2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mOpeningbalance4 4 4 4 4 4Additions - - - - - -Closingbalance4 4 4 4 4 48 Treasury clearance accountsSept.2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mOpening balance 364 546 262 313 525 265Add Out station treasury bank balances. (25) (181) - - - 260Movement in TCOS outstation balances - 284 (51) (212) -339 365 546 262 313 5259 Internally generated revenueSept.2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mInternally generated revenue:Taxes 17,734 18,255 13,082 9,850 10,410 8,625Fines and fees 738 1,171 2,113 1,199 827 98Licenses 126 106 174 145 169 92Earnings and sales 166 197 364 131 667 519Rent on Govt. properties 164 117 194 160 147 101Interest and dividend 358 512 1,489 467 387 1,033Re-imbursement - - 4 45 - 572Sale of Investment - - - - - 1,42419,286 20,358 17,420 11,997 12,607 12,46466

FINANCIAL INFORMATION-HISTORICALNOTES TO THE ACCOUNTS10 Other recurrent expenditureSept2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mPersonnel cost 39,819 33,950 31,258 31,742 21,479 17,583Overhead cost 27,656 34,551 28,497 37,227 40,009 32,971Pensions and Gratuities 5,569 6,930 6,542 3,387 2,827 2,46973,044 75,431 66,297 72,356 64,315 53,02311 Statutory allocationThis represents the State Government’s share of the revenue collected and distributed by the FederalGovernment. The basis of allocation varied over the years and the most current, which is in accordancewith the Finance (Control and Management) Act Cap F26 LFN 2004 is as follows:Revenue sharing basis %Federal Government 41.28State Government 28.11Local Government Areas 21.0713% Derivative Fund 7.61Deductions: Cost of collections 1.93Total 100.00Source: www.fmf.gov.ng (March 2010 Statutory allocation)* TCOS – Treasury cash offices67

FINANCIAL INFORMATION-HISTORICALNOTES TO THE ACCOUNTS12 Claims and litigationsDTSG in its ordinary course of business is presently involved in 25 cases. According to the StateGovernment, all the civil suits against it have an estimated potential liability for N7.8 billion.The State Government claims to have good defence to its pending legal actions and none of the claimsare likely to have any material or adverse effect on the State. Details of the pending litigations arepresented in the table below and overleaf:S/NSuit No. Parties Claim (N)1 FHC/A/SB/135/10 United Sadia Fishing Industries Vs Chief M.C. Oboh and 6 ors 140,000,000.002 HCO/11/2002 Edward Ugeh Vs A.G. & Commissioner for Justice, DTS & 2 ors 1,000,000,000.003 A/223/2006 Benedict Onyedi Vs 1. State Pri. Edu. Board 2. Attorney-Gen. DTS. 10,000,000.004 A/57/2010 Engr. Amaechi Ogbolu Vs Executive Gove. DTS. 300,000.005 Aku/46/2010Emmanuel Sonkwu & Ors. Vs Principal Akwukwu-Igbo Gram. Sch II& Ors 1,000,000.006 A/248/2009 Paul Alimile Morgan Esq. Vs Hon. Comm. For Lands 12,329,545.007 A/252/2008 Innocent Amiaka Vs The Gov. Of DTS. 7 Ors 5,000,000.008 A/101/2008 Chike Egbuna & Ors Vs Comm. For Lands & Ors 100,000,000.009 A/95/2010 Bank PHB Plc. Vs Hon. F.E. Owete & Ors 100,000,000.0010 A/198/2009 O & E (Nig) Ltd. Vs Attorney-Gen. DTS & Ors 500,000,000.0011 O/4/2010 Dr. M. I. Ogbangwo Vs H.M.B., DTS & Ors 500,000,000.0012 A/155/08 Benson Majemite Vs Hon. Comm. For Lands 100,000,000.0013 A/6/04 Barr. Ejomauwe Junior Efe Vs. Gov. DTS 14,000,000.0014 A/148/2005 Chief U. Adimkpayah & Anor Vs HAG/CJ & Anor. 416,000,000.0015, A/272/2009 Mr. Paul Chidi E. Vs Mr. Emmanuel Uduaghan & Ors 10,000,000.0016 A/62/2010 Mr. Charles J. Akaya Vs Hon. Talib Ebite & Ors 8,500,000.0017 A/29/2010 Mr. O. Chiadikabia Vs The Gov. DTS & Anor 8,500,000.0018 A/210/2010 Ground Conditions Ltd. Vs DTS Government & Ors 123,247,277.3719 A/211/2010 Ground Conditions Ltd. Vs DTS Government & Ors 34,986,976.8720 A/212/2010 Ground Conditions Ltd. Vs DTS Government & Anor 19,040,000.0021 ID/NRJ/1/2009 KAY Que Investment Ltd. Vs Executive Gov. DTS & Ors 179,491,265.7222 LD/295/2010 Contemporary Design Associates & Ors Vs DTS Government & Ors 4,477,515,994.4823 LD/657/2010 Fenek Ventures Ltd. Vs DTS Government & Ors 9,000,000.0024 A/231/2010 Chief Sam Anokam Vs Hon. Comm. For Lands & Ors 9,229,302.2225 A/14/2008 Chief Sam Anokam Vs Hon. Comm. For Lands & Survey & Ors 18,526,448.50Total 7,796,666,810.1668

FINANCIAL INFORMATION-HISTORICALNOTES TO THE ACCOUNTSCommercial loans as at 31 December 2010S/N Lender Principal as Dec. 2010 (N) PurposeInternal Loans1 First City monument Bank 8,750,000,000.00 To bridge the funding gap in the budget2 Oceanic Bank 9,040,277,777.68 To bridge the funding gap in the budget3 Zenith Bank Int’l 4,521,920.675.99 To bridge the funding gap in the budget4 Access Bank 4,518,357,037.94 To bridge the funding gap in the budgetExternal Loans1. Multilateral debt 1,030,415,143.71 Loans transferred from Bendel stateTotal 27,860,970,635.3314 Unsubstantiated expenditureSept2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mUnvouched expenditure - - 44,129 - 90,597 46,411Queried vouchers 5,989 1,225 12,542 205 2,277Total - 5,989 45,354 12,542 90,802 48,688Unvouched expenditure refers to expenditure incurred without the requisite documentation i.e.receipts or payment vouchers.Queried expenditure refers to expenditure incurred in an irregular manner e.g. incurred withoutproper authorisation or in excess of approved budget amount.No adjustment was made in respect of both categories of amounts since cash was spent and toadjust for such expenditure would overstate cash balances in the relevant years.69

FINANCIAL INFORMATION-HISTORICALNOTES TO THE ACCOUNTS15 Statement of adjustments to assets and liabilitiesI. Cash and bank balancesSept2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mBalance as per audited financialstatements17,862 (4,356) 14,496 12,205 7,067 1,069Adjustments :Trapped deposits written off:Societe General Bank (251) (251) (251) (251) (251) (251)All States Trust Bank (16) (16) (16) (16) (16) (16)Reclassification :Unremitted pension deductions - - (6,456) - - -17,595 (4,623) 7,773 11,938 6,800 802II. Investments (MOFI)Sept 2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mBalance as per auditedfinancial statements10,236 9,458 9,458 9,125 24,858 36,330Adjustments :Investmentsoff:writtenLiquidated companies (9) (9) (9) (9) (9) (9)Unsubstantiated shares (5) (5) (5) (5) (5) (5)Shares used asguarantee(3,670) (3,670) (3,670) (3,670) - -6,552 5,774 5,774 5,441 24,844 36,31670

FINANCIAL INFORMATION-HISTORICALNOTES TO THE ACCOUNTSIII.Loans and advancesSept2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mOpening balance asper audited financialstatements5,207 4,707 3,415 3,035 2,529 1,963Adjustments(cumulative):Specialwritten offimprest(139) (139) (139) (139) (139) (139)Other loans writtenoff(1,640) (1,640) (1,640) (1,640) (1,450) (3)Adjustedbalanceopening3,428 2,928 1,636 1,256 940 1,821IV.Special project accountSept2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mBalance as peraudited financialstatements7,929 5,662 13,522 21,357 7,879 27,247Adjustments :External loans (1,262) (1,939) (2,608) (1,451) (2,609) (14,609)Internal loans (6,667) (3,723) (10,914) (19,206) (3,870) (10,538)Redeemable DevBond- - - (700) (1,400) (2,100)- - - - - -71

FINANCIAL INFORMATION-HISTORICALNOTES TO THE ACCOUNTSV. Consolidated revenue fundSept2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mBalance transferred to CDF asper audited financial statements69,268 96,597 110,670 49,301 44,338 58,549Adjustments/Reclassification :Opening balance reclassified (4,227) (19,162) (12,558) (26,357) (31,132) (23,235)Reversal of contributorypension accruals1,693 6,345 - - - -CRF charges: Investments - - - (3,670) - (14)CRF charges : Loans andadvances- - - (190) (1,446) (144)CRF charges : Trapped deposit - - - - - (267)CRF charges : Contributorypension expenses(10,000) - - - - -Subtotal 56,734 83,780 98,112 19,084 11,760 34,889Balance transferred to CDF afteradjustments(56,734) (83,780) (98,112) (19,084) (11,760) (34,889)Closing balance - - - - - -72

FINANCIAL INFORMATION-HISTORICALNOTES TO THE ACCOUNTSVI.Capital development fundSept 2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mBalance as per auditedfinancial statements28,028 4,227 19,162 12,558 26,357 31,132Adjustments made to CRF(cumulative):Loans and advances (1,780) (1,780) (1,780) (1,780) (1,590) (144)Investments (3,684) (3,684) (3,684) (3,684) (14) (14)Reversal of contributorypension accruals8,038 6,345 - - - -Trapped deposits in banks (267) (267) (267) (267) (267) (267)Contributory pension remittedduring the year(10,000) - - - - -20,335 4,841 13,431 6,827 24,486 30,707VII.Other government fundsSept2010Dec.2009Dec.2008Dec.2007Dec.2006Dec.2005N’m N’m N’m N’m N’m N’mBalance as per audited financialstatements7,637 15,944 9,599 9,599 9,599 9,599Adjustments (cumulative):Contributory pension accruals (8,038) (6,345) - - - -Contributory pension remittedduring the year10,000 - - - - -9,599 9,599 9,599 9,599 9,599 9,59973

FINANCIAL INFORMATION-FORECASTREPORT ON THE REVENUE AND EXPENDITURE FORECAST74

FINANCIAL INFORMATION-FORECASTMEMORANDUM ON THE REVENUE AND EXPENDITURE FORECASTThe balances for 31 December 2010 represent the adjusted budget for the 2010 fiscal year (except for revenue figureswhich are actual). In the absence of unforeseen circumstances and based on assumptions set out below, the StateGovernment estimates that its forecast revenue and expenditure for years ending 31 December 2011 to 2017 will be asshown below:Revenue and Expenditure ForecastForecast20102011201220132014201520162017N’mN’mN’mN’mN’mN’mN’mN’mRecurrent Revenue (A):Statutory Allocation 155,175 163,837 172,983 182,639 192,835 203,599 214,965 226,965Value Added Tax 7,344 8,347 9,486 10,781 12,253 13,925 15,826 17,986Internally Generated RevenueTaxes 23,909 25,497 27,190 28,995 30,920 32,973 35,163 37,497Fines and Fees 994 1,061 1,131 1,206 1,286 1,371 1,463 1,560Licenses 170 181 194 206 220 235 250 267Earnings and Sales 224 239 255 272 290 310 330 352Rent on Government Property 221 236 252 269 286 305 326 347Miscellaneous 23 24 26 27 29 31 33 35Interest and Dividends 483 515 549 586 624 666 710 757Subtotal 26,025 27,753 29,596 31,561 33,657 35,891 38,275 40,816Total Recurrent Revenue 188,544 199,937 212,065 224,981 238,744 253,416 269,065 285,767Capital Revenue (B):Internal Loans 20,000 50,000 - - - - - -75

The balances for 31 December 2010 represent the adjusted budget for the 2010 fiscal year (except for revenue figureswhich are actual). In the absence of unforeseen circumstances and based on assumptions set out below, the StateGovernment estimates that its forecast revenue and expenditure for years ending 31 December 2011 to 2017 will be asshown below:Revenue and Expenditure ForecastForecast20102011201220132014201520162017N’mN’mN’mN’mN’mN’mN’mN’mTotal Revenue (A+B) 208,544 249,937 212,065 224,981 238,744 253,416 269,065 285,767ExpenditureCapital expenditure 62,563 102,253 63,619 67,494 71,623 76,025 80,720 85,730Recurrent Expenditure:Personnel Cost 53,092 60,690 85,542 85,542 85,542 94,096 94,096 94,096Pensions and Gratuities 7,425 6,065 6,433 6,825 7,242 7,687 8,162 8,669Consolidated Revenue Fund Charges 2,663 2,012 2,134 2,264 2,403 2,551 2,708 2,876Overhead Cost 36,874 49,179 52,162 55,339 58,725 62,333 66,183 70,291Public Debt Charges 13,781 13,415 13,415 - - - -Bond repayment (coupon andPrincipal) - 6,593 13,187 13,187 13,187 13,187 13,187 13,187Total recurrent expenditure 113,835 137,955 172,874 163,158 167,099 179,855 184,336 189,119Total Expenditure 176,398 240,208 236,493 230,652 238,722 255,879 265,056 274,849Net cash flow in year 32,146 9,729 (24,428) (5,671) 22 (2,463) 4,009 10,918Opening Cash and Cash Equivalent 5,874 38,020 47,748 23,320 17,649 17,670 15,207 19,216Closing Cash and Cash Equivalent 38,020 47,749 23,320 17,649 17,671 15,207 19,216 30,13476

FINANCIAL INFORMATION-FORECASTASSESSMENT OF BOND – RELATED CASH FLOWSIn the absence of unforeseen circumstances and based on assumptions set out in page 6 and the lawsgoverning the issuance of the Bond, DTSG estimates its servicing of the coupons and redemption for theyears ending 31 December 2011 to 2017 will be as shown below:Sinking Fund AccountAnalysis of Sinking Fund2011 2012 2013 2014 2015 2016 2017 20186 Mths 12 Mths 12 Mths 12 Mths 12 Mths 12 Mths 12 Mths 6 MthsN'm N'm N'm N'm N'm N'm N'm N'mOpening Balance - 905 2,770 4,712 6,735 8,841 11,034 13,318Transfer to Sinking Fund 6,593 13,187 13,187 13,187 13,187 13,187 13,187 6,593Interest on Sinking Fund 55 167 245 327 411 500 591 331Management Fees (1) (2) (3) (4) (5) (6) (7) (4)Trustee's Fees (26) (53) (53) (53) (53) (53) (53) (26)Bond Interest (3,500) (6,524) (5,812) (4,997) (4,064) (2,997) (1,774) (374)Principal Repayment (2,217) (4,911) (5,623) (6,437) (7,370) (8,438) (9,661) (5,343)Net Cash Flow 905 1,865 1,942 2,023 2,106 2,193 2,284 1,177Closing balance 905 2,770 4,712 6,735 8,841 11,034 13,318 14,49577

FINANCIAL INFORMATION-FORECASTBASES & ASSUMPTIONS FOR REVENUE & EXPENDITURE FORECASTBasesThe forecasts for the years ending 31 December 2011 - 2017 have been prepared on a consistent basis withAccounting Policies for the Nigerian Public Sector.AssumptionsThe following assumptions were adopted in the preparation of the revenue and expenditure forecasts:1. There will be no significant changes in Federal and State Governments’ monetary and fiscal policiesduring the forecast period that will adversely affect the State Government;2. The Federation Account and Value Added Tax sharing formula would not alter significantly fromthose used in 2010;3. Value Added Tax is expected to increase annually at about 14% 2 over the forecast period in linewith forecast average growth rate of private consumption, which represents the main driver of valueadded tax;4. The statutory allocation is expected to increase annually at the historical CAGR of about 6% overthe forecast period;5. Internally generated revenue is expected to increase annually at the forecast average GDP growthrate of about 7% 3 over the forecast period;6. Capital expenditure represents 41% of total revenue in 2011 and 51% of revenue (less loans) in thesame period. However, capital expenditure declines in absolute terms by 38% between 2011 and2012 and subsequently represents only 30% of total revenue from 2012 to 2017. This is due toincreased recurrent expenditure i.e. personnel cost due to the implementation of the minimum wagebill. Proposed additional capital expenditure will be financed by the issue of further series of thebond issuance programme (not considered in these forecasts).7. Personnel cost is expected to increase by 14% from 2010 to 2011 and 41% from 2011 to 2012. Thisreflects the effect of the minimum wage bill recently approved by the federal and state governments.Personnel cost is expected to remain constant from 2012 to 2014 as the State does not anticipate asignificant change in its staff structure. The State has also anticipated a 10% increase in 2015 toreflect a possible federal driven increase in staff salaries.2 Economist Intelligence Unit (EIU) estimates3 Economist Intelligence Unit (EIU) estimates78

FINANCIAL INFORMATION-FORECASTBASES & ASSUMPTIONS FOR REVENUE & EXPENDITURE FORECAST8. Pensions and gratuity represents 3% of total revenue (less internal loans) in line with the historicalaverage ratio of pension and gratuity to total revenue (less internal loans).9. Consolidated revenue fund charges represents 1% of total revenue (less internal loans) in line withthe historical average ratio of consolidated revenue fund charges to total revenue (less internalloans).10. Overhead cost represents about 25% of total revenue (less internal loans) in line with the historicalaverage ratio of overhead cost to total revenue (less internal loans).11. Public debt charges are expected to decline to zero over the forecast period as the State plans toliquidate all existing internal loans.12. ISPO monthly deduction of N1,098,907,642.20 is expected to be deducted from the State’s FederalAllocation into a Sinking Fund account towards interest and principal repayment;13. The interest on the sinking fund is assumed based on the prevailing rate on fixed deposit of 4%;14. Redemption of the Bond would be by amortisation of interest and principal payments over thetenure of the Bond;15. The first coupon and principal payments would be made in January 2012 and semi annuallythereafter;16. The Bond proceeds would be used to finance social and economic projects which are expected tostimulate economic activities in the State. These projects have been identified and their respectivebusiness plans and bills of quantity have been prepared and will be submitted to the Securities andExchange Commission as part of the approval process;17. The economic and political climate of Nigeria will remain relatively stable; and18. In the event of a shortfall in the bullet principal repayment of the bond, the State Government willmake good the shortfall from its recurrent revenue.79

BOND RATING (EXTRACTED FROM THE RATING REPORT)80

BOND RATING (EXTRACTED FROM THE RATING REPORT)81

STATUTORY AND GENERAL INFORMATIONINDEBTEDNESSAs at May 31, 2010, Delta State had outstanding local and foreign commercial loans totalling about N28.6billion. Other than as stated above, the State had no outstanding debentures, mortgages, loans, charges orsimilar indebtedness or material contingent liabilities or other similar indebtedness, other than in theordinary course of governance.CLAIMS AND LITIGATIONBelow is an extract from the Report of the Solicitors to the Programme dated August 11, 2011, on theclaims and litigations the State is involved in as at July 31, 2011:“The State is, presently involved in several civil litigation. However, the total amount claimed in nineteen(19) material cases instituted against the State which fall within a materiality threshold of N20,000,000(Twenty Million Naira) for monetary claims comes to N5,821,409,348.31 (five billion, eight hundred andtwenty one million, four hundred and nine thousand, three hundred and forty eight naira, thirty one kobo).The Solicitors to the Issue are, however, of the opinion that majority of the sums claimed in the suitsinstituted against the State are exaggerated and would most likely be unsubstantiated. The State’s actualliability in the foregoing cases will be as eventually established, found and determined by the court uponconclusion of the cases.The Honourable Attorney General & Commissioner for Justice of Delta State on behalf of the Delta StateGovernment has written to confirm that “the State is not involved in any litigation in any Court of Law, withany person or body corporate which is likely to have material adverse effect on the State in relation to thebond issue or its process as at 31st July, 2011”.The Solicitors to the Issue are of the opinion that the State’s liability in the event of an unfavorableresolution of the disputes against the State would not have any material adverse effect on the Issue”MATERIAL CONTRACTSThe following agreements have been entered into and are considered material to this Offer:(i) Vending Agreement dated September 29, 2011 under the terms of which the Issuing Houses haveagreed to offer for subscription the Delta State Bond.(ii) Programme Trust Deed dated September 29, 2011 between Delta State Government, and the Trustees.(iii) Underwriting Agreement dated September 29, 2011 between Delta State Government and theUnderwriters.(iv) Any other Material Contract in respect of any other issuance will be disclosed in the PricingSupplement.Other than as stated above, the State has not entered into any material contracts except in the ordinarycourse of governance, any other material contract in respect of any issuance under the programme will bedisclosed in the Pricing Supplement relating to the Securities to be issued.BOND RATINGThe rating agencies, Agusto &Co. Ltd and Global Credit Rating Co. Ltd have assigned the following rating: Local currency bond rating of A+ by Global Credit Rating Co. Ltd and A+ by Agusto &Co.Ltd; and Issuer rating of A- by Global Credit Rating Co. Ltd and Bbb+ by Agusto &Co. Ltd82

STATUTORY AND GENERAL INFORMATIONRELATIONSHIP BETWEEN THE ISSUER AND ITS ADVISERSAs at the date of this Shelf Prospectus, there is no relationship between the Issuer and any of its advisersexcept in the ordinary course of business.CONSENTSThe following have given and not withdrawn their written consents to the Issue of this Shelf Prospectuswith their names and reports (where applicable) included in the form in which they appear:Representatives of the Executive Council of Delta StateS/N Name Responsibility1. His Excellency, Dr Emmanuel Eweta Uduaghan Executive Governor2. His Excellency, Prof. Amos Agbe Utuamah Deputy Governor3. Mr. Charles Amajuoritse Ajuyah (SAN) Commissioner for Justice and AttorneyGeneral4. Mr. Bernard Okumagba Commissioner for Finance5. Hon. Funkekeme Solomon Commissioner for Works6. Dr. Joseph S. Otumara Commissioner for Health7. Mrs. Betty Oghometite Efekhoda Commissioner for Women Affairs8. Dr. Chris Oghenechovwen Commissioner for Water Resources9. Mr. Patrick Ferife Commissioner for Lands, Survey10. Mr. Frank Omare Commissioner for Environment11. Barr. Misan Kubeyinje Commissioner for Agricultural andNatural Resources12. Prof. Patrick Muoboghare Commissioner for Basic/SecondaryEducation13. Barr. Christopher Chike Ogeah Commissioner for Information14. Dr. Tony Nwaka Bureau for Special Duties15. Mr. Ebifa Olisaelika Ijoma Commissioner for Special Duties(Youth Affairs)16. Chief Paulinus Akpeki Commissioner for Housing17. Prof. Hope Eghagha Commissioner for Higher Education18. Hon. Ben Igbakpa Commissioner for Transport19. Barr. (Mrs) Orezi Esievo Commissioner for Special Infrastructure20. Dr. Anthonia Ashiedu Commissioner for poverty Alleviation21. Comrade Gloria Okulogbo Commissioner for MultilateralRelations/Abuja22. Mr. Kinglsey Eze Emu Commissioner for Commerce andIndustry23. Barr. Neworld Safugha Commissioner for Local Govt.Chieftaincy Affairs24. Barr. Richard Mofe-Damijo Commissioner for Arts & Culture25. Mr. Ifeanyi Micheal Osuoza Honourable Commissioner, Directorateof Project Monitoring26. Mr. Pirah Joseph Omamofe Honourable Commissioner for SpecialDuties (Oil & Gas)27. Mr. Emetulu Charles Chukwuemeke Honourable Commissioner for Energy83

STATUTORY AND GENERAL INFORMATION28. Mr. Onogba Oghenekewe Christian Honourable Commissioner for SpecialDuties (NDDC/Braced CommissionLiason)29. Mrs. Queen Nkem Ikenchukwu Honourable Commissioner forMillennium Development Goals30. Mr. Kenneth Oghenerhoro Okpara Honourable Commissioner for31. Hon. Princess Pat. AjuduaHonourable Commissioner for Special Duties (PublicWorks)32. Mr. Ayibatonye Alari TimiHonourable Commissioner for Specal Duties(DESOPADEC)33. Comrade Ovuozourie Macaulay Secretary to the State GovernmentOther Transaction PartiesIssuing HousesUnderwriters to Series 1 IssueAuditorsReporting AccountantsSolicitor to the Issuer:Solicitors to the Issue:Solicitors to the Trustee:Trustees to the IssueStockbrokers to IssueRating AgenciesRegistrars to the IssueReceiving BankAccess Bank Plc, BGL Plc, FCMB Capital MarketsLimited, Greenwich Trust Limited, ICMG SecuritiesLimited, UBA Capital Limited, Vetiva CapitalManagement Limited and Zenith Capital Limited.Access Bank Plc, Fidelity Bank Plc, FCMB Plc, ICMGSecurities Limited, Mainstreet Bank Limited, UnitedBank for Africa, Vetiva Capital Management Limitedand Zenith Bank Plc.Delta State Auditor GeneralKPMG Professional ServicesDelta State Attorney General & Commissioner forJusticeDetail Commercial Solicitors ; Ajumogobia & OkekeTemplars Barristers & Solicitors; Osanmor Otiono &CoAfribank Trustees & Asset Mgt Co. Ltd, ALMConsulting Limited, First Trustees Nig. Limited, SkyeTrustees, UBA Trustees Limited and Union TrusteesLimitedBGL Securities Limited, City Code Trust & InvestmentCompany Limited, Cowry Asset Management Limited,CSL Stockbrokers Limited, Forthright SecuritiesLimited, ICMG Securities Limited, Nova Finance &Securities Limited, Resort Securities & Trust Limited,Skye Stockbrokers Limited, PAC Stockbrokers Limited,UIDC Securities Limited and Vetiva Securities LimitedAgusto & Co Limited, GCRFirst Registrars LimitedAccess Bank Plc84

STATUTORY AND GENERAL INFORMATIONDOCUMENTS AVAILABLE FOR INSPECTIONCopies of the following documents may be inspected at the offices of the Issuing Houses contained in thePricing Supplement of the series being issued, during normal business hours on any week day (except publicholidays), during applicable the Issue Period:(a) Certified true copy of the Enabling Law;(b) The Resolution of the Delta State Executive Council dated February 10, 2011 authorising theProgramme;(c) The State Government’s gazette dated April 14, 2011 confirming the instrument authorising theProgramme;(d) The House of Assembly Resolution dated May 15, 2011 authorising the Programme;(e) The Irrevocable Standing Payment Order issued (with respect to the series being issued) by Delta Stateto the Accountant-General of the Federation, authorizing periodic deduction of the principal andinterest obligations on the series directly from the State’s statutory allocation;(f) Letter approving the Irrevocable Standing Payment Order from the Federal Ministry of Finance todeduct principal and interest obligations from source, applicable to the series being issued;(g) Letter from the Securities and Exchange dated September 29, 2011 approving the registration of theShelf Prospectus and the Programme;(h) The Programme Trust Deed dated September 29, 2011 between the Delta State Government on theone part and the Trustees on the other part;(i) The Supplemental Trust Deed of the series being issued;(j) The Audited Financial Statements of Delta State for each of the five years ended 31st December 2005,2006, 2007, 2008, 2009 and the 9 month period ended 30 th September 2010;(k) The Report by KPMG Professional Services on the audited Financial Statements of Delta State for thefive years ended 31st December 2005, 2006, 2007, 2008, 2009 and the 9 month period ended 30thSeptember 2010;(l)The Report by KPMG Professional Services on the Revenue and Expenditure Projections of DeltaState for each of the years ending 31 December 2011, 2012, 2013, 2014 and 2015;(m) The material contracts referred to on page 82, and other contracts listed in the Pricing Supplement ofthe series being issued;(n) The written consents of the Representatives of the State and all Professional Parties to the Programme;(o) The Rating Reports of Agusto & Co and GCR, the Rating Agencies;(p) List of Claims and Litigation;85

FORM OF PRICING SUPPLEMENTSet out below is the form of Pricing Supplement which will be completed by the Issuer for each Series ofBonds issued under the Programme:Pricing Supplement (Supplementary Shelf Prospectus)To the Base Shelf Prospectus dated [ ]DELTA STATE GOVERNEMNTIssue of (.) Naira –denominated Fixed Rate BondsUnder the N100, 000,000,000 Debt Issuance Programme.Issue Price: N1000 at ParPayable in full on ApplicationApplication list Opens: [ ]Application list Closes: [ ]This document constitutes the Pricing Supplement relating to the issue of debt instruments described herein.This Pricing Supplement is supplement to, and should be read in conjunction with, the Shelf Prospectusdated 29 09 2011 and another supplements to the Shelf Prospectus to be issued by the Issuer. Terms definedin the Shelf Prospectus have the same meaning when used in this Pricing Supplement.To the extent that there is any conflict or inconsistency between the contents of this Pricing Supplement andthe Shelf Prospectus, the provisions of this Pricing Supplement shall prevail.This Pricing Supplement contains particulars in compliance with the requirements of the Securities &Exchange Commission for the purpose of giving information with regard to the Securities being issuedhereunder (the “Series 1 Bonds” or “Bonds”). Application has been made to the Council of the Exchangefor the admission of the Bonds to the Daily Official List of the Exchange.The Issuer accepts full responsibility for the accuracy of the information contained in this PricingSupplement. The Issuer declares that having taken reasonable care to ensure that such is the case, theinformation contained in this Pricing Supplement is, to the best of its knowledge, in accordance with thefacts and does not omit anything likely to affect the import of such information and that save as disclosedherein, no other significant new factor, material mistake or inaccuracy relating to the information included inthe Shelf Prospectus has arisen or has been noted, as the case may be, since the publication of the ShelfProspectus. Further, the material facts contained herein are true and accurate in all material facts, theomission of which would make any statement contained herein misleading or untrue.86

FORM OF PRICING SUPPLEMENTFINAL TERMS OF SERIES [ ] BONDS1. Issuer Delta State Government (“DTSG”)2. Series Number [ ]3. Tranche Number [ ]4. Aggregate Principal Amount of Series [ ]5. (i) Issue Price [ ](ii) Net Proceeds [ ]6. Denomination(s) [ ]7. Issue Date [ ]8. Maturity Date [ ]9. Interest Rate [ ][ ] % Fixed Rate[ ] % Floating Rate10. Redemption/Payment Basis [ ]11. Status [ ]12. Security [ ]13. Listing(s): [ ]14. Method of Distribution: [ ]15. Offer Period [ ]PROVISIONS RELATING TO INTEREST (IF ANY)PAYABLE16. Fixed Rate Bond Provisions [Applicable/Not applicable] (if not applicableDelete the remaining sub-paragraphs of thisparagraph)(i) Interest Rate(s) [ ](ii) Interest Payment Date(s)/Payment Dates: [ ](iii) Interest Amount(s): [ ](iv) Day Count Fraction: [ ](v) Business Day ConventionDay][Following Business Day Convention/PrecedingBusiness Day convention/Modified Business(vi) Business Day: [ ](vii) Other terms relating to method of calculatingInterest for Fixed Rate Bonds:[Not Applicable/Give Details]87

FORM OF PRICING SUPPLEMENT17. Floating Rate Bond Provisions [Applicable/Not applicable] (if not applicableDelete the remaining sub-paragraphs of thisparagraph(i) Interest Payment Date(s) [ ](ii) Reference Banks [ ](iii) Spread (if applicable) [ ](iv) Party responsible for calculating interest rate [ ]and interest amount(s).(v) Relevant Time (if applicable) [ ](vi) Screen Rate Determination [ ]- Benchmark [ NIBOR/MPR/FGN/Nigerian Treasury BillsRate]- Interest Determination Date(s) [ ]- Relevant Screen Page [ ](vii) Day Count Fraction [ ]18. Zero Coupon Bond Provisions [Applicable/Not applicable] (if not applicableDelete the remaining sub-paragraphs of thisparagraph(i) Amortisation Yield:[ ] per cent per annum(ii) Reference Price [ ](iii) Day Count Fraction: [ ](iv) Any other formula/basis of determining [ ]Amount payablePROVISIONS RELATING TO REDEMPTION19. Optional Early Redemption (Call Option): [Applicable/Not Applicable]20. Optional Early Redemption (Put Option): [Applicable/Not Applicable]21. Scheduled Redemption/Amortisation: [Applicable/Not Applicable]22. Redemption Amount(s): [ ]23. Scheduled Redemption Dates: [ ]24. Final Redemption Amount: [ ]GENERAL PROVISIONS APPLICABLE TO THEBONDS25. Form of Bonds: Dematerialised Bonds(i) Form of Dematerialised Bonds: [Registered/Certificate/Dematerialised](ii) Registrar: [ ]88

FORM OF PRICING SUPPLEMENT26. Trustee(s) [ ]27. Record Date: [ ]28. Other terms or special conditions [ ]DISTRIBUTION, CLEARING AND SETTLEMENTPROVISIONS29. Underwritten/Book-building [ ]30. If Underwritten, names of underwriters [ ]31. Clearing System: Central Securities Clearing System LimitedGENERAL32. Rating [ ]33. Taxation [ ]34. Governing Law NigeriaAPPENDICES35. Appendices [List and Attach Appendices if applicable]USE OF PROCEEDS[Insert details of use of proceeds]MATERIAL ADVERSE CHANGE STATEMENTExcept as disclosed in this document and in the Shelf Prospectus dated [ ] [and the Addendum [dated],there/there] has been no significant change in the financial or trading position of the Issuer since [insert dateof last audited accounts or interim accounts (if later) and no material adverse change in the financial positionor prospectus of the Issuer since [insert date of last published annual accounts]RESPONSIBILTYThe Issuer accepts responsibility for the information contained in this Pricing Supplement which, when readtogether with the Shelf Prospectus referred to above, contains all information that is material in the contextof the issue of the Bonds.Signed on behalf of the Issuer:…………………………..……………………………….89