Shelf Prospectus Within the Meaning of Rule 40 (C) of the Sec Rules and Regulations

THIS DOCUMENT IS IMPORTANT AND SHOULD BE READ CAREFULLY. IF YOU ARE IN ANY DOUBT ABOUT ITS CONTENTS OR THE ACTION TO BE TAKEN, PLEASECONSULT YOUR BANKER, STOCKBROKER, ACCOUNTANT, SOLICITOR OR ANY OTHER PROFESSIONAL ADVISER FOR GUIDANCE IMMEDIATELY. FOR INFORMATIONCONCERNING CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE “RISK FACTORS” COMMENCING ON PAGE 56 HEREOF.

THIS DEBT ISSUANCE PROGRAMME PROSPECTUS CONSTITUTES A SHELF PROSPECTUS WITHIN THE MEANING OF RULE 40 (C) OF THE SEC RULES AND REGULATIONS

DELTA STATE GOVERNMENT OF NIGERIA

BOND ISSUANCE PROGRAMME OF N100,000,000,000

This Shelf Prospectus is dated September 29, 2011 and shall be valid for 24 months after this date. Under this Bond Issuance Programme (“the Programme”), the Delta State Government (the “DTSG” or “Issuer”) may from time to time issue bonds (“Bonds”), in separate series or tranches, in amounts, at prices and on terms and conditions contained in this Shelf Prospectus and to be set out in the applicable Pricing Supplements for each series or tranche.

This Shelf Prospectus is to be read and construed in conjunction with any supplement hereto and all documents which are incorporated herein by reference and, in relation to any Series or Tranches (as defined herein) of Bonds, together with the applicable Pricing Supplement. This Shelf Prospectus shall be read and construed on the basis that such documents are incorporated and form part of this Shelf Prospectus.

This Shelf Prospectus has been seen and approved by the representatives of the State Executive Council (the “Executive Council”). The Delta State Executive Council (“EXCO”) on behalf of the Delta State Government have taken reasonable care to ensure that the material facts contained herein are true and accurate in all material respects and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no material facts, the omission of which would make any statement herein misleading or untrue.

The contents of this Shelf Prospectus are not to be construed as legal, financial or tax advice. Each prospective investor should consult his, her or its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice. Neither the Delta State Executive Council (“EXCO”) on behalf of the Delta State Government listed on page 8 & 9 nor any of the Parties to the Programme listed on page 9-12 of this document is making any representation to any subscriber regarding the legality of an investment by such subscriber.

This Shelf Prospectus has been registered by the Securities & Exchange Commission. It is a civil wrong and a criminal offenceunder the Investments and Securities Act No. 29, 2007 to issue a prospectus which contains false or misleading information. Clearance and registration of this prospectus and the securities which it offers does not relieve the parties of any liability arising under the act for false or misleading statements or for any omission of a material fact.

The registration of this Shelf Prospectus and any subsequent Pricing Supplements shall not be taken to indicate thatthe Securities & Exchange Commission endorses or recommends the debt securities to be issued under the Programme or assumes responsibility for the correctness of any statements made or opinions or reports expressed herein.

LEAD ISSUING HOUSE

RC 125384

CO-ISSUING HOUSES

RC 223042 RC 446561 RC 189502 ICMG SECURITIES LIMITED RC 174789

RC 444999 RC 485600 RC 639491 This Prospectus is dated September 29, 2011

CONTENTS

DEFINITIONS...... 3 INFORMATION RELATED TO THIS SHELF PROSPECTUS ...... 6 ISSUE OF PRICING SUPPLEMENTS...... 7 PARTIES TO THE PROGRAMME...... 8 THE PROGRAMME...... 13 DECLARATION BY THE ISSUER...... 14 SUMMARY OF THE PROGRAMME ...... 15 TERMS & CONDITIONS OF THE PROGRAMME……………………………………………………………….. 19 INFORMATION ON NIGERIA ...... 29 INFORMATION ON DELTASTATE ...... 40 RISK AND MITIGATING FACTORS FOR THE PROGRAMME...... 56 FINANCIAL INFORMATION-HISTORICAL...... 59 Letter from the Reporting Accountants...... 59 Statement Of Accounting Policies ...... 60 Statement of Assets & Liabilities...... 61 Statement of Revenue and Expenditure...... 62 Notes to the Accounts………...... 63 FINANCIAL INFORMATION FORECAST...... 74 Report on the Revenue and Expenditure Forecast...... 74 Memorandum on the Revenue and Expenditure Forecast...... 75 Bases & Assumptions for Revenue & Expenditure Forecast...... 78 BOND RATING (EXTRACTED FROM THE RATING REPORT) ...... 80 STATUTORY AND GENERAL INFORMATION ...... 82 Indebtedness...... 82 Claims and Litigation...... 82 Material Contracts...... 82 Bond Rating...... 82 Relationship between the Issuer and its Advisers ...... 83 Consents...... 83 Documents Available for Inspection ...... 85 FORM OF PRICING SUPPLEMENT……………………………………………………………... 86

DEFINITIONS

Unless the context otherwise requires the following expressions shall have the meaning respectively assigned to them:

“Allotment Date” The date of clearance of the basis of allotment of a Series Issue by SEC

“Auditor” The Auditor General of Delta State;

“Authorised Representatives” The members of the Delta State Executive Council;

“Bond” The Series 1 Bond and any other bond of any Series issued by the State pursuant to the Programme and constituted by the Programme Trust Deed and an applicable Supplementary Trust Deed

“Bondholder” Any person for the time being entered in the Register or the Central Securities Clearing System (CSCS) as a holder of a unit or units of the Bonds and includes persons so registered as joint holders;

“Business Day” means a day (other than Saturday or Sunday or a public holiday) on which banking institutions are open for business in Nigeria;

“CAC” The Corporate Affairs Commission;

“CBN” The Central Bank of Nigeria

“CSCS” The Central Securities Clearing System;

“Certificates” In relation to the Bonds, a certificate in or substantially in the form specified in the First Schedule to the Programme Trust Deed and with respect to any Additional Bonds, a Certificate in or substantially in the form specified in a Supplementary Trust Deed to the particular Securities being issued or in such other form as may be agreed from time to time by the Trustee;

“Deed” The Programme Trust Deed and any amendment, notation or supplemental trust deed issued or made pursuant to this programme trust deed;

“DTSG” 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” The executive council of the Delta State Government of Nigeria

“FAAC” Federation Account Allocation Committee

“Grossing Up” All amounts payable under the Bond will be paid in full without set-off or counterclaim or other restrictions and fee and clear of and without deductions or withholding for or on account of any taxes or any charges or otherwise

“IGR” Internally Generated Revenue

“Interest” Interest per annum payable will depend on each series and will be paid semi-annually in arrears.

DEFINITIONS

“Investors” Means the registered holder(s) for the time being of any Securities issued hereunder. “Investment and Securities 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 to the Accountant General of the Federation for the periodic deduction of monies as a first line charge from the State’s statutory allocation from the Federation Account and payment thereof 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”) and Zenith Capital Limited (“Zenith Capital”)

“Maturity Date” Means the final anniversary of allotment date of each Series Issue as specified in the applicable Pricing Supplement.

“NSE” means the Nigerian Stock Exchange.

“Offer Documents” Means this Shelf Prospectus, the applicable Pricing Supplement to the Bond Issue and any other document issued or to be issued by the State inviting the public to subscribe to the Securities on the terms and conditions specified in the offer documents.

“Offer Period” Means the issuance and offering period hereunder of DTSG Bonds in the aggregate principal amount of N100,000,000,000 on the terms and conditions set out in this Prospectus.

“Pricing Supplement” The document(s) to be issued pursuant to the Shelf Prospectus which shall provide final terms and conditions of a Series Issue under the Programme;

“The Programme” The Delta State Bond Issuance Programme of One Hundred Billion (N100,000,000,000.00)

“Programme Trust Deed” Means the master trust deed between the Issuer and the Trustees dated on 29th September, 2011

“Projects” Means the projects that would be described in the applicable Pricing Supplement of each Series or Tranche Issue, to which the proceeds of thereof will be applied.

“Project Documents” 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 in applicable Pricing Supplements.

“Receiving Bank” Means Access Bank Plc

“Register” Means the register kept by the Registrar containing the names, particulars and Securities held for the time being by each Investor;

“Registrar” Means First Registrars Limited

DEFINITIONS “Revenue” Means monies to the credit of the Consolidated Revenue Fund/Account of the State plus the total income of the State from whatever source derived including the State’s Internally Generated Revenue;

“SEC” or “The Commission” Means the Securities and Exchange Commission established under the Investments and Securities Act 2007;

“Series” means the tranches in which the Issuer may issue Bonds from time to time;

“Shelf Prospectus” This document, which is issued in accordance with the Rules and Regulations of the Commission and which details the aggregate offer size and the broad terms of the Programme.

“Sinking Fund” Means the fund held by the Trustee as security for the repayment of the obligations of the Issuer for the Bonds in accordance with the provisions of the Programme Trust Deed and the applicable Supplemental Trust Deed. A separate sinking fund will be created for each series;

“Stock Exchange”or “the Exchange” Means The Nigerian Stock Exchange, or such other securities exchange on which the State may from time to time list the Securities;

“State” Means the Delta State Government of Nigeria and the Issuer of the Bonds;

“Series Trust Deed” Means the deed between the Issuer and the Trustees issued as a supplement to the Programme Trust Deed and setting out amongst other things, specificmatters in respect of the Bonds being issued under a particular series or tranche;

“The Bonds” Means the principal monies represented by the N100,000,000,000 Bonds raised through two or more series issued by the State within the validity period of this Shelf Prospectus;

“Trustees” 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 for the time being appointed under the Trust Deeds or in replacement of any existing trustee;

“Underwriting Agreement” Means the agreement made between the Issuer and the Underwriters, to fully underwrite the Bonds;

“Underwriters” Means Access Bank Plc, First City Monument Bank (“FCMB”), United Bank for Africa (“UBA”), Vetiva and Zenith Bank Plc (“Zenith Bank”); “Vending Agreement” 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.

INFORMATION RELATED TO THIS SHELF PROSPECTUS

The information set forth herein have been obtained from official sources that are believed to be reliable; and the representatives of the State have taken reasonable care to ensure that the material facts contained herein are true and accurate in all material respects. The information and expressions of opinion herein are subject to change without notice and neither delivery of this Shelf Prospectus nor any issue made hereunder or any future use of this Shelf Prospectus shall, under any circumstances, create any implication that there has been no 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 been provided by the State from its records, except for information expressly attributed to other sources. The presentation of certain information, including tables of receipts and other revenues, is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial position or other affairs of the State. No representation is made that past experience, as it might be shown by such financial and other information, will necessarily continue or be repeated in the future. However, certain statements included or incorporated by reference in this Shelf Prospectus do constitute “forward-looking statements.” 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 other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Any statements made in this Shelf Prospectus involving matters of opinion, whether expressly stated 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 future performance and that the State’s financial condition and liquidity may differ materially from those made in or suggested 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 the State website – www.deltastate.gov.ng – and other authorised State publications. Any such information that is inconsistent with the information set forth in this Shelf Prospectus should be disregarded. No such information is a part of or incorporated into this Shelf Prospectus.

ISSUE OF PRICING SUPPLEMENTS (SUPPLEMENTARY PROSPECTUS)

Following the publication of this Shelf Prospectus, a Pricing Supplement shall be prepared for the clearance and approval of the Securities and Exchange Commission with respect to each Series or Tranche of Bonds issued under the Programme.

Statements contained in the relevant Pricing Supplement shall, to the extent applicable (whether expressly, by implication 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 of this Shelf Prospectus.

The Issuer, in the event of any significant change, material mistake or inaccuracy relating to information included in this Shelf Prospectus which is capable of affecting the assessment of the Bonds, shall prepare an Addendum or publish a new Shelf Prospectus for use in connection with any subsequent issue of Bonds under the Programme after the prior approval by the Securities and Exchange Commission.

PARTIES TO THE PROGRAMME

ISSUER Delta State Government of Nigeria Government House Asaba Delta State

REPRESENTATIVE OF DELTA STATE EXECUTIVE COUNCIL: His Excellency, Dr Emmanuel Eweta Uduaghan Executive Governor and Chairman of the Council

His Excellency, Prof. Amos A. Utuamah (SAN) Deputy Governor

Mr.Charles Amajuoritse Ajuyah (SAN) Commissioner for Justice and Attorney General

Mr. Bernard Oboatarhieyeren Okumagba Honorable Commissioner for Finance

Hon. Funkekeme Solomon Honorable Commissioner for Works

Dr. Joseph S. Otumara Honourable Commissioner for Health

Mrs. Betty Oghometite Efekhoda Honourable Commissioner for Women Affairs

Dr. Chris Oghenechovwen Honourable Commissioner for Water Resources

Mr. Patrick Ferife Honourable Commissioner for Lands, Survey& Urban Development

Mr. Frank Omare Honourable Commissioner for Environment

Barrister Misan Kubeyinje Honourable Commissioner for Agricultural and Natural Resources

Prof. Patrick Muoboghare Honourable Commissioner for Basic/Secondary Education

Barrister Christopher Chike Ogeah Honourable Commissioner for Information

Dr. Tony Nwaka Honourable Commissioner (Bureau for Special Duties)

Mr. Ebifa Olisaelika Ijoma Honourable Commissioner for Special Duties (Youth Affairs)

Chief Paulinus Akpeki Honourable Commissioner for Housing

Prof. Hope Eghagha Honourable Commissioner for Higher Education

Hon. Ben Igbakpa Honourable Commissioner for Transport

PARTIES TO THE PROGRAMME

Barrister (Mrs) Orezi Esievo Honourable Commissioner for Special Infrastructure

Dr. Anthonia Ashiedu Honourable Commissioner for Poverty Alleviation

Comrade Gloria Okulogbo Honourable Commissioner for Multilateral Relations/Abuja

Mr. Kinglsey Eze Emu Honourable Commissioner for Commerce and Industry

Barrister Neworld Safugha Honourable Commissioner for Local Govt. & Chieftaincy Affairs

Barrister Richard Mofe-Damijo Honourable Commissioner for Arts & Culture

Mr. Ifeanyi Micheal Osuoza Honourable Commissioner, Directorate of Project Monitoring

Mr. Pirah Joseph Omamofe Honourable Commissioner for Special Duties (Oil & Gas)

Mr. Emetulu Charles Chukwuemeke Honourable Commissioner for Energy

Mr. Onogba Oghenekewe Christian Honourable Commissioner for Special Duties (NDDC/ Braced Commission Liason)

Mrs. Queen Nkem Ikenchukwu Honourable Commissioner for Millennium Development Goals

Mr. Kenneth Oghenerhoro Okpara Honourable Commissioner for Economic Planning

Hon. Princess Pat. Ajudua Honourable Commissioner for Special Duties (Public Works)

Mr. Ayibatonye Alari Timi Honourable Commissioner for Special Duties (DESOPADEC)

Comrade Ovuozourie Macaulay Secretary to the State Government

SOLICITOR TO DTSG Attorney General & Commissioner for Justice of Delta State Ministry of Justice SSS Road, Off Anwai Road, Asaba Delta

AUDITOR TO DTSG Auditor General of Delta State Office of the Auditor General Ezenei Avenue Off Dennis Osadebe Road Asaba Delta

LEAD ISSUING HOUSE Access Bank Plc Plot 1665, Oyin Jolayemi Street Victoria Island Lagos

PARTIES TO THE PROGRAMME

CO- ISSUING HOUSES BGL Plc 12a, Catholic Mission Street Lagos Island Lagos

FCMB Capital Markets Limited 6th Floor First City Plaza 44 Marina Lagos

Greenwich Trust Limited Plot 1698A, Oyin Jolayemi Street Victoria Island, Lagos

ICMG Securities Limited 8A, Ademola Street, South West Ikoyi, Lagos

UBA Capital Limited UBA House, 57 Marina Lagos

Vetiva Capital Management Limited Plot 266B, Kofo Abayomi Street Victoria Island Lagos

Zenith Capital Limited Zenith Heights 87 Ajose Adeogun Street Victoria Island Lagos

FINANCIAL ADVISER BGL Plc 12a, Catholic Mission Street Lagos Island Lagos

LEAD STOCKBROKER BGL Securities Limited 12a, Catholic Mission Street Lagos Island Lagos

JOINT STOCKBROKER City Code Trust & Investment Company Limited 6, Davies Street, Wema Bank Building (3rd Floor) Marina, Lagos

Cowry Asset Management Limited Plot 1319 Karimu Kotun Street, Victoria Island, Lagos

CSL Stockbrokers Limited 4th Floor, First City Plaza 44 Marina Lagos Island Lagos

Forthright Securities Limited 19 Martins Street, Marina, Lagos Island, Lagos 10

PARTIES TO THE PROGRAMME

ICMG Securities Limited 8A, Ademola Street, South West Ikoyi, Lagos

ICON Stockbrokers Limited Medife House (3rd Floor) 58/60, Broad Street Lagos

MACT Securities Limited 72 Norman Williams Crescent Ikoyi Lagos

Nova Finance & Securities Limited Speedway House (1st Floor) 21 Araromi Street, Onikan Lagos

Resort Securities & Trust Limited 14th Floor, Nicholas House, 6, Catholic Mission Street, Lagos Island, Lagos

Skye Stockbrokers Limited 5th Floor, Skye Bank Building, 30 Marina Lagos

PAC Stockbrokers Limited 8A Elsie Femi Pearse Street, Victoria Island, Lagos

UIDC Securities Limited 6th Floor, Great Nigeria House, 47/57 Martins Street, Victoria Island, Lagos

Vetiva Securities Limited 266 B Kofo Abayomi Street, Victoria Island, Lagos

TRUSTEES Afribank Trustees & Asset Mgt Co. Ltd Afribank Plaza, 14th Floor 51/55 Broad Street, Lagos

ALM Consulting Limited Cluster B, Block B, Flat 102 1004 Estates, Victoria Island Lagos

First Trustees Nig. Limited 2nd Floor, A. G. Leventis Building 42/43 Marina, Lagos.

PARTIES TO THE PROGRAMME

Skye Trustees Limited Skye Bank House (1st floor) Plot 5, Ikeja Commerical Scheme Alausa Lagos

UBA Trustees Limited UBA House, 57 Marina Lagos

Union Trustees Limited 36 Marina, UBN Stalion Plaza, Lagos

SOLICITORS TO THE TRUSTEE Templars Barristers & Solicitors The Octagon (4th Floor,) 13A, A. J. Marinho Drive, Victoria Island Annexe Lagos

Osammor, Otiono & Co 101, Allen Avenue Ikeja Lagos

SOLICITORS TO THE ISSUE Ajumogobia & Okeke 2nd Floor, Sterling Towers 20 Marina, Lagos

Detail Commercial Solicitors 14th floor 38-39 Marina Conoil Building Lagos

REPORTING ACCOUNTANTS KPMG Professional Services 22A Gerard Road Ikoyi Lagos

RATING AGENCIES Agusto & Co. Limited 5th floor, UBA House 57 Marina Lagos

Global Credit Rating Co. Ltd. 17th Floor, New Africa House 31 Marina Lagos

REGISTRAR First Registrars Nig. Limited Plot 2, Abebe Village Road Iganmu, Lagos

RECEIVING BANK Access Bank Plc Plot 1665, Oyin Jolayemi Street Victoria Island Lagos

THE PROGRAMME

A copy of this Shelf Prospectus together with the documents specified herein, having been approved by the Trustees, and have been delivered to the SEC for clearance and registration.

This Shelf Prospectus is being issued in compliance with the provisions of the ISA 2007, the SEC Rules &Regulations made pursuant thereto and the listing requirements of The Nigerian Stock Exchange and contains particulars in compliance with the requirements of the Commission and The Exchange for the purpose of giving information to the public with regards to the N100,000,000,000Delta State Bond Issuance Programme (“The Programme”).

An Application will be made to the Council of The NSE on each Series being issued under the Programme for the admission of the Bonds to the Daily Official List of The NSE. The Bonds will upon admission to the Daily Official List qualify as a security in which Trustees may invest under the Trustee Investment Act Cap T22 Laws of the Federation of Nigeria, 2004 and will also qualify as a Government Security under Section 20(1)(g) of the Personal Income Tax Act, Cap. P8, LFN, 2004 and Section 19 of the Companies Income Tax Act, Cap. C 21, LFN, 2004. The Bonds will be granted Tax Exempt Status due to their qualification as Government Securities within the meaning of the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA).

The Delta State Executive Council (“EXCO”) on behalf of the Delta State Government collectively and individually accepts full responsibility for the accuracy of the information contained in this Prospectus and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no material facts, the omission of which would make any statement contained herein misleading or untrue.

RC 125384 RC 223042 RC 446561 RC 189502

ICMG SECURITIES LIMITED RC 444999 RC 485600 RC 639491 RC 174789

on behalf of

are authorised to receive applications for

N100,000,000,000 Development Bonds

This Shelf Prospectus contains:

1. On Page 14, the declaration by the Issuer to the effect that it did not breach any terms and conditions in respect of borrowed monies which resulted in the occurrence of an event of default and an immediate recall of such borrowed monies during the twelve calendar months immediately preceding the date of filing an application with the SEC for the registration of this Shelf Prospectus.

2. Beginning on page 59, the Reporting Accountants’ Report prepared by Messrs. KPMG Professional Services for incorporation in this Shelf Prospectus;

3. On page 80, extracts of the Rating Reports prepared by the Rating Agencies, Agusto & Co and Global Credit Rating

4. On page 81, the details of the claims and litigation, the State is involved in as at July 31, 2011;

Validity Period of the Shelf Prospectus and Delivery of Documents:

This Shelf Prospectus is valid until September 28, 2013. No Bonds shall be issued on the basis of this Shelf Prospectus read together with any Pricing Supplement later than two years after the issue date indicated on the cover of this Shelf Prospectus.

This Shelf Prospectus and the documents referred to herein can be obtained at the offices of the Commission, the Delta State Ministry of Information and the offices of the Issuing Houses listed on page 9 and 10.

DECLARATION BY THE ISSUER

SUMMARY OF THE PROGRAMME

1. Issuer: Delta State Government of Nigeria (“Delta State”, “DTSG” or “the State”)

2. Programme Description: Debt Issuance Programme

3. Programme Size: N100,000,000,000

4. Lead Issuing House: Access Bank Plc

5. Co- Issuing Houses: BGL Plc, FCMB Capital Markets Limited, Greenwich Trust Limited, ICMG Securities Limited,UBA Capital Limited, Vetiva Capital Management Limited and Zenith Capital Limited (The Lead Issuing House and Co-Issuing Houses shall together be referred to as “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 Limited and Union Trustees Limited.

7. Instrument(s) to be Issued: Instrument to be issued under the programme shall be registrable Bonds.

8. Issuance in Series: Bonds under this Programme will be issued in Series or Tranches on different dates within the 24 months validity of this Shelf Prospectus. Details relating to each Series will be contained in the applicable Pricing Supplement and Supplemental Trust Deed.

9. Type of Bonds: The type of Bonds that may be issued under the Programme, which for any Series or Tranche will be specified in the applicable Pricing Supplement of the Issue shall include:

Fixed Rate Bonds Where a Series or tranche is issued as a Fixed-Rate Bond, coupon shall be paid on the Bonds at a fixed rate in arrears and will be paid on such dates and such rate as is specified in the relevant Pricing Supplement.

Floating Rate Bonds

Where a Series or tranche is issued as a Floating-Rate Bond, coupon rate to be paid shall be determined in line with market condition and the basis of determining the coupon payments onevery payment date shall be clearly specified in the relevant Pricing Supplement.

SUMMARY OF THE PROGRAMME

10. Use of Programme Proceeds: Proceeds of Bonds issued under the Programme shall be used to fund developmental projects in Delta State. The use of proceeds for each Bond Issue under the Programme shall be detailed in the applicable Pricing Supplement.

11. Method of Issue: Bonds issued under this Programme shall be via an offer for subscription or private placements through a book-building process and/or any such methods approved by SEC. The method of issue for each Series Issue shall be contained in the applicable Pricing Supplement.

12. Issue Price: The pricing of each Bond shall be contained in the applicable Pricing Supplement of the Issue. Bonds may be issued at par, at a discount 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 theapplicable Pricing Supplement.

15. Coupon Rate: The coupon rate to be paid on the Bonds to be issued under the Programme shall be determined by the Issuer and Joint Issuing Houses and would be specified in the Pricing Supplement applicable to the Series of Bond

16. Early Redemption: Bonds under the Programme may be issued with an embedded early redemption option. Where a Bond is issued with this option, the applicable Pricing Supplement shall specify the first redemption period, redemption amount and other terms applicable to such early redemption.

17. Redemption: The Bonds shall be redeemed at par on maturity or at any redemption amount as may be specified in the applicable Pricing Supplement

18. Day Count Convention: Actual/Actual

19. Business Day Convention: Where a payment date falls on a non business day, such payment shall be postponed to the next business day. If it falls into the next calendar month, such coupon payment date shall be brought forward to the immediate preceding business day.

20. Sinking Fund: A Sinking Fund shall be created for each series in accordance with the provisions of the Enabling Law and the ISA. The Sinking Fund shall be principally funded from the Pledged Revenues by way of the ISPO for the purpose of repayment of the interests and principal of the Bonds in accordance with the provisions of the Trust Deed. The management of the Sinking Fund is the sole responsibility of the Trustees.

SUMMARY OF THE PROGRAMME

21. Security: Security for the repayment and other obligations of the Issuer in relation to the Bonds shall be held by the Trustee and shall comprise the ISPO issued for each Series by Delta State to the Accountant General of the Federation for the periodic deduction of monies as a first line charge from the State’s statutory allocation from the Federation Account.

Deductions from the State’s statutory allocations shall be made into a Series Sinking Fund held by the Trustee as set out in the Programme Trust Deed and the applicable Supplemental Trust Deed, from which all interests, principal and all other monies if any, due and payable by the Issuer in respect of the Bonds shall be paid.

22. Taxation: All payments made to Bondholders shall be free and clear of withholding, State and Federal income and Capital Gains Taxes with no deduction made whatsoever at source.

23. Grossing Up: All amounts payable under the Bonds will be paid in full without set-off or counterclaim or other restrictions and free and clear of and without any deductions or withholding for or on account of any taxes or any charges or otherwise

24. Quotation: An application will be filed for each series issued with the Council of the Exchange for the admission of the Bonds to the Daily Official List of the Exchange, or such other securities exchange on which 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) and be freely transferable in accordance with the provisions of the Programme 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 every Series or Tranche of Bond issued shall rank parri-passu among themselves in all respects without any discrimination or preference whatsoever. 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 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.

The Solicitors to the Issue are of the opinion that the State’s liability in the event of an unfavorable resolution of the disputes against the State would not have any material adverse effect on the Issue”

SUMMARY OF THE PROGRAMME

28. Governing Law: Nigerian Law: - The Constitution of the Federal Republic of Nigeria, 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 Finance authorizing the Accountant General of the Federation to deduct at 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 Assembly

TERMS AND CONDITIONS OF THE PROGRAMME

The following is the text of the terms and conditions which, as supplemented, amended and/or replaced by the Final Terms which are 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 Series will be given in the applicable Final Terms which will provide for those aspects of these terms and conditions which are applicable to those Bonds. Certain provisions of these terms and conditions are summaries of, and are subject to, the detailed provisions of the Trust Deed.

Bonds

Bonds issued under the Programme are issued in series (each a “Series”). Each Series is the subject of the Final Terms which supplements these terms and conditions (the “Conditions”). The terms and conditions applicable to any particular Series of Bonds are these Conditions as constituted by a separate trust deed applicable to each Series of Bonds. In the event of any inconsistency between these Conditions and the applicable 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 Issuer and the Trustees, which expression shall include any person or persons for the time being appointed as the Trustees 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 the provisions of the Trust Deed. Copies of the Trust Deed are available for inspection at the Specified Office of the 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 or supplemented from time to time with the consent of the parties thereto) are expressly and specifically incorporated to and shall apply to these Conditions.

The Bonds are constituted by the Programme Trust Deed. The statements set out in these Terms and Conditions (the “Conditions”), include summaries of, and are subject to the detailed provisions of the Programme Trust Deed and the Series 2 Trust Deed. The Bondholders are entitled to the benefit of, are bound 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 Nigeria declared public holiday) on which commercial banks are open for general business in Abuja and Lagos;

“Business Day Convention”, in relation to any particular date, has the meaning given in the applicable Final Terms and, if so specified in the applicable Final Terms, may have different meanings in relation to different dates and, in this context, the following expressions shall have the following meanings:

TERMS AND CONDITIONS OF THE PROGRAMME

(i) “Following Business Day Convention” means that the relevant date shall be postponed to the first following day that is a Business Day; (ii) “Modified Following Business Day Convention” or "Modified Business Day Convention" means that the relevant date shall be postponed to the first following day that is a Business Day unless that day falls in the next calendar month in which case that date will be the first preceding day that is a Business Day; (iii) “Preceding Business Day Convention” means that the relevant date shall be brought forward to the first preceding day that is a Business Day; (iv) “Floating Rate Convention” means that each relevant date shall be the date which numerically corresponds to the preceding such date in the calendar month which is the number of months specified in the applicable Final Terms as the Specified Period after the calendar month in which the preceding such date occurred, provided, however, that:

(A) if there is no such numerically corresponding day in the calendar month in which any such date should occur, then such date will be the last day which is a Business Day in that calendar month; (B) if any such date would otherwise fall on a day which is not a Business Day, then such date will be the first following day which is a Business Day unless that day falls in the next calendar month, in which case it will be the first preceding day which is a Business Day; and (C) if the preceding such date occurred on the last day in a calendar month which was a Business Day, then all subsequent such dates will be the last day which is a Business Day in the calendar month which is the specified number of months after the calendar month 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 the applicable Final Terms and:

(i) if "Actual/365" or "Actual/Actual" is so specified, means the actual number of days in the Calculation Period divided by 365 (or, if any portion of the Calculation Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365); (ii) if "Actual/365 (Fixed)" is so specified, means the actual number of days in the Calculation Period divided by 365; (iii) if "Actual/360" is so specified, means the actual number of days in the Calculation Period divided by 360; and (iv) if "30/360" is so specified, means the number of days in the Calculation Period divided by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months (unless (i) the last day of the Calculation Period is the 31st day of a month but the first day of the Calculation Period is a day other than the 30th or 31st day of a month, in

TERMS AND CONDITIONS OF THE PROGRAMME

which case the month that includes that last day shall not be considered to be shortened to a 30-day month, or (ii) the last day of the Calculation Period is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month)

“Final Redemption Amount” means, in respect of any Bond, its principal amount or such other amount 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 of debtors seeking to have an order of relief entered with respect to it, or seeking to adjudicate it 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 part of its Property; iii. an involuntary case, proceeding or other action of a nature referred to in clause (i) above shall be commenced against it that: (A) shall result in the entry of an order for relief or of an order granting or approving such adjudication or appointment; or (B) shall remain unstayed, undismissed, undischarged or unbonded for a period of at least 60 days after the party’s actual knowledge of such action; iv. an involuntary case, proceeding or other action shall be commenced against it that seeks the issuance of a warrant of attachment, execution, distraint or other similar process against any substantial part of its Property that shall result in the entry of an order for relief and shall remain unstayed, undismissed, undischarged or unbonded for a period of at least pending appeal within 60 from the entry thereof; v. there shall be commenced against it any extra-judicial liquidation proceedings under any Applicable 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; or viii. 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 interest payable 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 be specified as the Interest Commencement Date in the applicable Final Terms;

“Interest Payment Date” means the date or dates specified as such in, or determined in accordance with the provisions of, the applicable Final Terms “Interest Period” means each period beginning on (and including) the Interest Commencement Date or any Interest Payment Date and ending on (but excluding) the next Interest Payment Date;

TERMS AND CONDITIONS OF THE PROGRAMME

“Interest Rate” means the rate or rates (expressed as a percentage per annum) of interest payable in respect of the Bonds specified in applicable Final Terms or calculated or determined in accordance with 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 debt security and which is or is capable of being admitted to or listed or traded on a stock exchange or other securities market (including any over-the-counter market), any loan advanced by a bank, an insurance 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 of Guarantee

“Payment Date” means in respect of each Series, the dates specified as such in the applicable Final Terms upon which interest and/or principal are due and payable in respect of the Bonds of that Series;

“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 legal personality;

“Principal Amount Outstanding” means, on any day in relation to a Bond, the principal amount of that Bond on issue less the aggregate of all principal payments that have become due and payable in 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, the Final Redemption Amount, the Optional Redemption Amount (Call), the Optional Redemption Amount (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 in respect of principal which may be payable under condition 10 (Taxation), any premium payable in respect of a Bond and any other amount in the nature of principal payable pursuant to these conditions; (ii) any reference to interest shall be deemed to include any additional amounts in respect of interest which may be payable under condition 10 (Taxation) and any other amount in the nature of interest payable pursuant to these conditions

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 the applicable Final Terms, but the applicable Final Terms give no such meaning or specify that such 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 as amended and/or supplemented up to and including the Issue Date of the Bonds.

2. Form, Denomination, Title and Series

2.1 Form and Denomination: The Bonds may be issued in certificated form whereupon a Bond Certificate (“Certificate”) will be issued to Bondholders in respect of their registered holding of Bonds. Each Certificate will be numbered serially with an identifying number which will be recorded on the applicable Certificate and in the Register of Bondholders (“Register”) of Bonds of the applicable Series which the Issuer will procure to be kept by the Registrar. The Bonds may also be issued in without certificates (dematerialised or book entry), which shall be registered with 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 the Register maintained by the Registrar for this purpose. The Issuer, the Trustees and the Registrar may deem and treat the holder of any Bond Certificate as the absolute owner of such Bond Certificate, free from any equity, set-off or cross-claim on the part of the Issuer against the original or any intermediate holder of such Bond Certificate. All payments made to the holder shall be valid and, to the extent of sums so paid, effective to satisfy and discharge the liability for the monies payable on the Bonds.

2.3 Series: The Series as part of which a Bond is issued shall be stated on the applicable Bond Certificate and recorded in the Register. The Register and/or the applicable Final Terms shall be conclusive as to the series of a Bond.

3. Registration and Transfer of Bonds

3.1 A Register of the Bonds shall be kept by the Registrar at its office, and there shall be entered in such Register:-

(i) The names and addresses of the holders for the time being of the Bonds; (ii) The amount of the units of Bonds held by every registered holder; (iii) The account number of the Bondholder; (vi) The date at which the names of every registered holder is entered in respect of the Bond standing in his name; and (v) The 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 the Registrar and thereupon the Register shall be altered accordingly. The Trustees and the Bondholders and any Person authorised by any of them shall be entitled at all reasonable times during office hours to inspect the Register and to make copies of or take extracts from the same.

TERMS AND CONDITIONS OF THE PROGRAMME 3.3 The Bonds are transferable in whole or in part in denominations of N1,000 (or such denominations set out in the applicable Final Terms) by instrument in writing in the usual common form of transfer or in any form approved by the Issuer and the Trustees and in accordance with the provisions of the Trust Deed.

3.4 Every instrument of transfer of the Bonds must be signed by both the transferor and the transferee and title to the Bond will pass upon registration of the instrument of transfer in accordance 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 the Registrars for the time being of the Bond accompanied by the Certificate for the Bond to be transferred and such other evidence as the Issuer may require to prove the title of the transferor or his right to transfer the Bond, and if the instrument of transfer is executed by some 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 he has or is entitled to the capacity in respect of which he proposes to act under this Condition or 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 shall be at liberty to retain the interest payable upon any Bonds which any Person is entitled to transfer under the preceding Condition until such Person shall be registered or duly transfer the 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 will be closed (“Record Date”)

4. Redemption, Purchase and Cancellation

4.1 Redemption at Maturity: Unless previously redeemed, purchased and cancelled, a Series of Bonds 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 specified in the applicable Final Terms.

4.2 Redemption by Instalments: Bonds may be partially redeemed by instalment on each Payment Date at the Redemption Amount specified in the applicable Final Terms whereupon the Principal Amount Outstanding of such Bond shall be reduced by the Redemption Amount on each Payment Date until fully redeemed at the Maturity Date.

TERMS AND CONDITIONS OF THE PROGRAMME

5. Payments

5.1 Subject to Condition 10 (Taxation), any principal, interest or other monies payable on or in respect of any Bonds may be paid by the Trustees through the Registrar by cheque or warrant sent through recorded delivery post to the registered address of the holder or Person entitled thereto, or in the case of joint holders to the registered address of the joint holder who is first named on the Register in respect of such Bonds, or to such Person and to such address as the holder or holders may in writing direct. Provided that any payment of value above N10,000,000.00 (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 is sent or to such other Person or Persons as the holder, or in the case of joint holders, all such joint holders may in writing direct and payment of the cheque or warrant shall be a satisfaction of the moneys represented thereby. Every such cheque or warrant shall be sent at the risk of the Person 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 Bond shall be repaid to the Bondholders.

5.5 Payments will be made to the Person shown in the Register at the close of business on the Record Date as defined in Condition 3.7

5.6 The Registrar shall give to the Bondholders not less than [one (1)] month’s notice in writing of the time and mode for repayment of the Bonds to be redeemed and each such notice shall state the amount of the Bond for redemption.

5.7 At the time and place so fixed for redemption, each Bondholder shall, where applicable, deliver to the Registrar the relevant Certificate(s) for his Bonds, if any (or other evidence of title issued by the CSCS) in order that the same may be cancelled together with a receipt for the redemption moneys payable in respect of the Bonds, and upon such delivery, the Trustees shall acting through the Registrars pay to the Bondholder the amount payable to him in respect of such redemption together with all interest accrued thereon.

5.8 If, on the Maturity Date, any Bondholder whose Bonds are liable to be redeemed shall fail or refuse to deliver up the Bond Certificate(s) (where applicable) held by him at the time and place fixed for their redemption or shall fail or refuse to accept payment of the redemption monies payable in respect thereof, the moneys payable to such Bondholder shall be paid to the Trustees and the Trustees shall hold such monies in trust for such Bondholder and interest on such Bonds shall cease to accrue as from the date fixed for redemption thereof and the Issuer shall thereby be discharged from all obligations in connection with such Bonds. If the Trustees shall place the moneys so paid to them on deposit at a commercial bank or invest them in the purchase of securities for the time being authorised by law for the investment of trust funds the Trustees shall not be responsible for the safe custody of such moneys or for interest thereon except such interest (if any) as the said money may earn whilst on deposit or invested as aforesaid less any expenses incurred by the Trustees.

TERMS AND CONDITIONS OF THE PROGRAMME

6. Taxation

In accordance with the provisions of the relevant tax legislation, the approval of the Minister of Finance has been obtained for all payments in respect of the Bonds to be made without withholding for or deduction of any taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or in the Federal Republic of Nigeria.

7. Enforcement

Only the Trustees may enforce the provisions of this Trust Deed. No Bondholder shall be entitled to proceed directly against the Issuer to enforce the performance of any of the provisions of this Trust Deed unless the Trustees having become bound as aforesaid to take proceedings fail to do so within 90 days and such failure is continuing

8. Meetings of Bondholders, Modification and Waiver of Breach

8.1 Convening Meeting of Bondholders: The Trust Deed contains provisions for convening meetings of Bondholders of a Series to consider matters affecting their interests, including the modification by Extraordinary Resolution of the Conditions or the provisions of the Trust Deed. Such a meeting may be convened by the Issuer or the Trustees and shall be convened by the Issuer or the Trustees at anytime upon request in writing of holders of at least 10 percent of the aggregate principal amount of the outstanding Bonds.

8.2 Quorum: The quorum at any meeting of the Bondholders convened for passing an Extraordinary Resolution will be two or more Persons holding or representing by proxy not less than three- fourths of the nominal amount of the Bonds for the time being outstanding; or, at any adjourned such 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 the passing of Extraordinary Resolutions and to decide upon all matters which could properly have been disposed of at the meeting from which the adjournment took place. An Extraordinary Resolution passed at any meeting of the Bondholders will be binding on all Bondholders of the relevant Series, whether or not they were present at such meeting.

8.3 Resolution in Writing A resolution in writing duly signed by the holders of all the Bonds for the time being outstanding, shall be as effective for all purposes as an Extraordinary Resolution duly passed at

TERMS AND CONDITIONS OF THE PROGRAMME

a meeting of the Bondholders. Such Resolution in writing may be contained in one document or in several documents in like form each signed by or on behalf of one or more of the Bondholders.

8.4 Modifications and Waiver The Trustees may agree: (i) upon the giving of prior written notification by the Issuer to the Rating Agency which has assigned a credit rating to the relevant Series or any Bonds comprised therein; and (ii) without the consent of the Bondholders of any Series, to:

8.4.1 any modification of any of the provisions of the Trust Deed or the Conditions that is of a formal, minor or technical nature or is made to correct a manifest error; and

8.4.2 any other modification (except as mentioned in the Trust Deed) and any waiver or authorisation of any breach or proposed breach of any of the Conditions or any of the provisions of the Trust Deed which, in the opinion of the Trustees, is not materially prejudicial to the interests of the Bondholders of that Series.

Any such modification shall be binding on the Bondholders and shall be notified by the Issuer to the Bondholders as soon as practicable, but subject to the Securities & Exchange Commission being notified, and the Stock Exchange as soon as practicable thereafter.

9. Replacement of Certificates

If any Certificate issued pursuant to these Conditions be defaced, lost or destroyed, it may be replaced on payment of all stamp duty (if any) payable on a new Certificate, and upon such terms as to evidence and indemnity as the Registrar may deem adequate and, in the case of defacement, on delivery of the old Certificate to the Registrar. An entry as to the issue of the new Certificate and indemnity (if any) shall be made in the Register.

10. Rights Against Predecessors-in-Title

Except as required by law the Issuer will recognise the registered holder of any Bonds as the absolute owner thereof and shall not be bound to take notice or see to the execution of any trust whether express, implied or constructive to which any Bonds maybe subject, and the receipt by such registered holder, or in the case of joint registered holders the receipt by any of them, of the interest from time to time accruing due for any other monies available in respect thereof shall be a good discharge to the Issuer notwithstanding any notice it may have whether express or otherwise of the right, title, interest or claim of any other Person to or in such Bonds interest or moneys. Notice of any trust express or constructive shall not be entered on the Register in respect of any Bonds.

11. Substitution

The Trust Deed contains provisions permitting the Trustees to agree: (a) with the consent of the Majority Bondholders; (b) written confirmation and/or affirmation from the Rating Agency that the

TERMS AND CONDITIONS OF THE PROGRAMME

credit 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 debtor under the Trust Deed, with any other company;

12. Further Issues

The Issuer may from time to time create and issue further Bonds either having the same terms and conditions as the Bonds in all respects (or in all respects except for the first payment of interest on them) and so that such further issue shall be consolidated and form a single Series with the outstanding Bonds of any series (including the Bonds) or upon such terms as the Issuer may determine at the time of their issue. References in these Conditions to the Bonds include (unless the context requires otherwise) any other Bonds issued pursuant to this Condition and forming a single series with the Bonds.

13. Prescription Claims in respect of Bonds will become prescribed unless presented for payment as required by Condition 8 within ten years (in the case of principal) and five years (in the case of interest), from the due date for payment thereof.

14. Notices

14.1 Any notice may be given by the Issuer or by the Trustees to any Bondholder by sending the same through the post in a prepaid letter addressed to such Bondholder at its address appearing on the Register of Bondholders. 14.2 Any notice, or other communication may be given to the Trustees hereunder by sending the same through the post in a prepaid letter addressed to the Trustees at their registered offices in Nigeria. 14.3 Any notice, or other communication may be given to the Issuer by sending the same through the post in a prepaid letter addressed to:

The Ministry for Finance

Delta State

14.4 Provided that in each case, any notice given to any Bondholder, the Trustees or the Issuer by way of publication in two Nigerian National Dailies will suffice as sufficient notice.

15. Governing Law and Jurisdiction

15.1 Governing Law The Bonds and all matters arising from or connected with the Bonds are governed by, and shall be construed in accordance with, Nigerian law

15.2 Jurisdiction Nigerian Courts shall have exclusive jurisdiction to settle any dispute arising out of or in connection with the Bonds

INFORMATION ON NIGERIA

The information in this section has been extracted from documents and publications publicly available and released by various public and private organisations such as the CBN, the Economic Intelligence Unit (EIU), the World Bank, International Monetary Fund, Nigerian Bureau of Statistics, other financial magazines and journals. Neither the Issuer nor its advisers are able to ascertain if facts have been omitted that would render the reproduced information inaccurate or misleading.

Background:

The Federal Republic of Nigeria lies on the coast of West Africa, along the Gulf of Guinea, bordered by Chad, Niger, Benin &Cameroon. The country covers an area of 923,768 square kilometres. Nigeria’s climate includes semi-desert in the north, tropical forest throughout much of the south, mountains in the east and mangrove swamps in the delta where the Niger River meets the ocean. The country’s political capital, Abuja, lies in the center of the country. Lagos, the commercial capital and the largest city lies on the south-western coast. The last census conducted in March 2006 puts the country's population to be140,003,542 (One Hundred and Forty Million, Three Thousand, Five Hundred and Forty Two).

Government At independence in 1960, Nigeria consisted of three regions: the Western, Eastern and Northern Regions. In 1963, the Western Region was split into two regions, namely: the West and Mid-West Regions. In 1967, the four regions were split into 12 States. The events that led to the split commenced with a military coup in 1966 that first brought the military into power, shortly followed by a counter coup and a civil war. The States were further subdivided into 19 States in 1976. The number of States were increased to 21 on September 23, 1987. In September 1991, 9 more States were created to make the country a federation of 30 States. Currently, there are 36 States in Nigeria following the creation of 6additional States on October 1, 1996. Nigeria was under military rule from 1966 to October1979, when the military government handed over power to a civilian administration. The civilian administration governed for four years, based on a US-type Presidential System of government, before it was toppled by a military coup on December 31, 1983. The military ruled the country from then until May 29, 1999 when it handed over power to a democratically elected civilian government. The succeeding democratic regime headed by Olusegun Obasanjo championed significant social, political, economic and institutional reforms in the country. On May 29, 2007 after serving two terms, the Obasanjo-led civilian government handed over the reins of leadership to another democratically elected government headed by President Umaru Musa Yar Adua, who died in office on May 5, 2010. President Goodluck Jonathan, the erstwhile Vice-President completed President Yar Adua’s term and contested the April 2011 general elections and emerged victorious. He was sworn-in on May 29, 2011 for a 4-year term.

The Presidency

The President is the Head of State and Commander-in-Chief of the Armed Forces. He is elected for a four- year term, subject to a maximum of 2 terms. There is a Vice President, who is elected alongside the President. The Vice President may be empowered to act on behalf of the President, if and when he is unable to act.

INFORMATION ON NIGERIA

National Assembly The National Assembly is the legislative arm of the Federal Government. It comprises the Senate (Upper House) and the House of Representatives (Lower House). The Senate is headed by a Senate President, who is elected from the body of Senators. The Senate is made up of 3 members each from the 36 States of the Federation and 1member representing the Federal Capital Territory, Abuja. Apart from making laws, the Senate is empowered to approve certain political appointments proposed by the President. The House of Representatives 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 System The Nigerian legal system is modelled after the English Common Law, modified by statutes to meet local demands and conditions. Nigerian law in areas such as patents, trademarks, copyrights and business associations, considerably reflects corresponding British statutes in these areas as at the dates of their first enactment. 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 certain constitutional, civil and criminal matters prescribed in the Constitution. There is also a Court of Appeal which hears appeals from the Federal High Court, High Court of a State, Sharia Court of Appeal of a State and Customary Court of Appeal of a State. Under the Constitution, the Federal High Court has jurisdiction in matters connected with the revenue of the Government of the Federation, admiralty, banking, foreign exchange and other currency and monetary or fiscal matters. At the State level, there is the High Court that has jurisdiction to hear and determine both civil and criminal cases. A Customary Court of Appeal of a State exercises jurisdiction in civil proceedings involving questions of customary law. A Sharia Court of Appeal has jurisdiction in cases involving questions of Islamic law. There are Magistrate Courts in the States, which have original, as opposed to appellate, jurisdiction in civil and criminal matters specified in the appropriate legislation.

International Affiliations Nigeria is affiliated to the following international organisations:

 African Union: Nigeria is a founding member of the African Union (AU), previously known as Organisation of African Unity (OAU) which was established in May 1963. Nigeria supports the AU, and takes its membership seriously in this primary African political group. The creation of the AU brings the dream of a common African currency, foreign policy, defence structure and economic programme closer to reality. When the AU is fully operational, it is expected to have a pan-African parliament, an economic 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 States established in May 1975 to facilitate trade between the States in the region and to promote regional joint development efforts. In January 1990 ECOWAS commenced a Trade Liberalisation Scheme aimed at the total elimination of customs duties and taxes of equivalent effect, removal of non-tariff barriers and the establishment of a common Customs External Tariff to protect goods produced in member states.

INFORMATION ON NIGERIA

 New Partnership for Africa's Development (NEPAD) Nigeria is an active member of NEPAD (established by the African Union) with the main objective of giving impetus to Africa's development by bridging existing gaps between Africa and the developed world. The main organs of NEPAD are the Heads of State and Government Implementation Committee (HSIC) and the Steering Committee. The HSIC comprises 3 states per AU while the Steering Committee comprises the Personal Representatives of NEPAD Heads of State and Government. NEPAD is structured into various task teams with responsibility for investigating priority areas, including conflict prevention, management and resolution, political and economic governance (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 to facilitate sub regional and continental integration (information communication technology, energy, transport, water and sanitation) etc.

 The Commonwealth of Nations Nigeria is a member of The Commonwealth together with majority of other nations that once constituted the British Empire.

 Organisation of Petroleum Exporting Countries (OPEC) The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, inter-governmental Organization, 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 Arab Emirates (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 of member countries, ensure the stabilization of oil prices in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital to those investing in the petroleum industry. Nigeria joined the oil cartel in 1971and has remained a very active 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 Associations Nigeria is a member of the World Trade Organisation (WTO), which deals with global rules of trade among nations. Its main function is to promote free trade. The country is also a signatory to the Lome Convention, which provides duty-free entry into the European Union (EU) for most goods, in addition to aid agreements with the EU. Nigeria also belongs to the United Nations and its various agencies and affiliates.

INFORMATION ON NIGERIA

Economy Nigeria is the second largest economy in sub-saharan Africa (after the Republic of South Africa) and the largest in West Africa. Nigeria is the eighth largest oil producing country and holds the eighth largest natural gas reserves in the world. Nigeria’s exports are largely petroleum products which account for 95% of the country’s foreign exchange earnings and approximately 80% of budgetary revenues. The impressive output growth 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 of 2011, compared with the 7.36 per cent recorded in the corresponding period of 2010. The non-oil sector grew by 8.46 per cent while the oil sector output growth was estimated at 2.90 per cent. Thus, the overall output growth was driven mainly by the non-oil sector with significant contributions from services, wholesale and retail trade as well as agriculture.

Capital Markets The start of 2011 has seen overall investor confidence shifting towards the debt market, as evidenced by the excitement surrounding the Federal Government’s debut of its Eurobond. The issuance of the US$500 million Eurobond 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 and Africa. The bond was admitted on the London Stock Exchange on the 31st of January, 2011.Equities closed the week ending July 8, 2011 on a negative note sustaining the downward trend that characterized the latter- end of June. The Nigerian Stock Exchange All Share Index (NSE-ASI) and market capitalization declined by 1.57% each to close at a year-low of 24,310.03 points and N7.77trillion, respectively. The decline was due to price losses of most traded equities which outweighed gains recorded by some stocks as investors’ appetite for risky assets declined significantly. It is expected that stock market indices may remain at current levels following investors’ increasing preference for government securities

External Debt Nigeria became the first African nation to fully repay its Paris Club debt in 2006, after years of economic mismanagement and profligate spending led to gross external debt escalating to over US$32 billion by the late 1990s. The deal saw Nigeria pay the Paris Club US$12.5 billion in exchange for the elimination of US$30.9 billion, the remainder of its official debt. The country has also committed to restructuring its debt of US$2.5 billion owed to the London Club of Creditors. Nigeria's Brady debt has effectively been paid down, after future payment obligation on Promissory Notes was transferred to Merrill Lynch in March 2007. As at the end of June 2011, the nation’s external debt stood at $5.398 billion.

Domestic Debt Domestic debt in Nigeria is mainly short term, as instruments with maturity structures of two years and below accounted for 41.0% of the total Federal Government domestic debt in 2008. The former administration of Chief Olusegun Obasanjo took steps to address the post 19808 legacy of exposure to local contractors and to unfunded pension liabilities of the Federal Government and several of its agencies. Reforms in this regard include the introduction of the Debt Management Office, and the Pensions Reform Act 2004, which seeks to ensure that all employers of labour with at least five staff members have a fully funded pension scheme. The management of domestic public debt has also been improved by lengthening maturities to reduce rollover risks. Given the vast restructuring of Nigeria's external debt, the country's consolidated debt to GDP ratio dropped significantly from 53% in 2004 to an estimated 18.6% as at November 2010. The country’s domestic debt at the end of June 2011 was N5.213 trillion.

INFORMATION ON NIGERIA

Foreign Reserves At the beginning of 2009, Nigeria's external reserves stood at US$52.8 billion and the excess crude account at US$15.0 billion, creating a significant buffer against adverse economic and foreign exchange movements. By the end of the year, foreign reserves had declined by 26.7% to US$42.5 billion while the excess crude oil account balance declined by 56.7% to US$6.5 billion due to reduced foreign exchange earnings from oil and the subsequent dependence on the excess crude account to fund budget deficits. Foreign reserves picked up in the fourth quarter of 2009 due to increased oil production coupled with higher oil prices, with over US$3.0 billion added in October 2009 alone. However, as at March 2010, foreign reserves further reduced to US$41 billion after hovering between US$42 billion and US$43 billion in the first quarter of 2010. Foreign reserves declined even further in the second quarter opening the period at US$41.5 billion and closing at US$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 Exchange Exchange rates remained largely stable prior to the recession with the Naira strengthening against the United States Dollar to a high of N115.80 in May, 2008. However, as a result of speculative currency trading triggered by the reduction of external reserves following the global economic meltdown, coupled with the reduction in oil prices and global demand, there 'was significant demand for foreign currency ("FOREX") which led to a subsequent devaluation of the Naira. In a bid to liberalise the FOREX market, The Central Bank of Nigeria discontinued 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 as at June 30, 2011.

Inflation Over the last 5 years, inflation rate has dropped steadily from a high of 23.7% (YoY) in 2003 to a record low of 5.4% as at December 2007. Although up from its record low, recent reforms have strengthened monetary management and helped contain inflationary pressure. Inflation remained in double-digit in the first four months of 2010. CPI rose from 12% year-on-year (y /y) in December 2009 to 12.5% in April 2010. The primary driver of inflation in Nigeria remains food prices given that it accounts for 64% of the CPI basket. In March 2010, the inflation rate fell to 11.8% from 12.3% the month before. In November 2010 inflation fell to 12.8% from 13.4% in October and further down to 11.8% in December 2010 and marginally rose to 12.4%as at May 31, 2011, as at June 30, 2011, inflation was 10.2%

Interest Rates Aggregate 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 in private 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 Policy Committee, therefore, urged that efforts be sustained to de-risk the real economy through appropriate reform measures. The interbank market rates fluctuated at the various segments since the beginning of the year. Key interbank rates moved in tandem with the upward revision of the monetary policy rate (MPR) to 7.5 per cent from 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%.

INFORMATION ON NIGERIA

ECONOMIC REFORM INITIATIVES The present Administration is firmly committed to creating a liberal market-oriented economy driven mainly by the private sector, while focusing on the need to alleviate poverty and advance local production. Nigeria's reform initiatives have been primarily centred on the following:

 Economic Stability Fiscal stimulus through draw downs from the excess crude account to augment monthly revenue to the 3 tiers of government. In addition to the measures taken by the SEC and the NSE to tighten regulation and reduce transaction costs, the CBN has introduced a number of measures towards stabilising the Banking sector.

 Oil and Gas/Extractive Minerals Sector Reform Deregulation of the downstream sub-sector; increased local content in the upstream sub-sector through the signing of the Local Content Bill; de-regulation and development of the solid minerals sector.

 Institutional Reform Civil 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 Alleviation The National Economic Empowerment and Development Strategy (NEEDS) is an initiative that encourages the people to take an active role in the prosperity of Nigeria. The National Poverty Alleviation Programme (NAPEP) is a programme with an objective to provide micro-credit and other productive assets to rural and urban poor communities.

 Accelerated Infrastructural Development The government has committed to an ambitious investment programme to address needs in critical areas such as power, transportation and telecommunications through private public partnerships (PPP) initiatives.

 Financial Sector Reform The Pension Reform Act; the Banking and Insurance sector reforms; and capital market reforms.

Agriculture Nigeria ranks twenty fifth worldwide and first in Africa in farm output. Agriculture has suffered from years of mismanagement, 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 of employment. 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 tons annually; 25 years ago it was 300,000 tons annually. An even more dramatic decline in groundnut and palm oil production also has taken place. Once the biggest poultry producer in Africa, corporate poultry output has declined from 40 million birds annually to about 18 million. Import constraints limit the availability of many agricultural and food processing inputs for poultry and other sectors. The fishery sub-sector is poorly managed. 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 was estimated at 2 million cubic meters. The agricultural sector suffers from extremely low productivity, reflecting reliance 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 with Nigeria’s rapid population growth, so that the country, which once exported food, now relies on imports to sustain itself.

INFORMATION ON NIGERIA

Industry Nigeria ranks 44th worldwide and third in Africa in factory output. The main products manufactured in Nigeria are beverages, cement, textiles, detergents and cigarettes. The manufacturing sector benefited from the economic reforms undertaken by the FGN aimed at diversifying the economy from the oil sector. Several large investments in the real sector have been made by Nigerian and foreign corporations. However, the country's high propensity to import means roughly 80% of government expenditures is recycled into foreign exchange. Cheap consumer imports, coupled with excessively high domestic production costs due in part to erratic electricity and fuel supply, have pushed down industrial capacity utilization to less than 30%. Many more Nigerian factories would have closed except for relatively low labor costs (10%-15%). Domestic manufacturers, especially pharmaceuticals and textiles, have lost their ability to compete in traditional regional markets; however, there are signs that some manufacturers have begun to address their competitiveness

The oil boom of the 1970s led Nigeria to neglect its strong agricultural and light manufacturing bases in favour of an unhealthy dependence on crude oil. Oil and gas exports accounted for more than 80% of export earnings 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 well over 100 trillion ft³ (2,800 km³). The types of crude oil exported by Nigeria are Bonny Light oil, Forcados crude 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 the Niger Delta oil-producing region continue to plague Nigeria's oil sector. Efforts are on-going to resolve these issues. In the absence of government programs, the major multinational oil companies have launched their own community development programs. The U.S. remains Nigeria's largest customer for crude oil, accounting for 40% of the country's total oil exports; Nigeria provides about10% of overall U.S. oil imports and rank as the fifth-largest source for U.S. imported oil.

The United Kingdom is Nigeria's largest trading partner followed by the United States. The trade balance overwhelmingly favors Nigeria, thanks to oil exports, The government also has been encouraging the expansion of foreign investment, although the country's investment climate remains daunting to all but the most determined. The stock of U.S. investment is nearly $7 billion, mostly in the energy sector. Significant exports of liquefied natural gas started in late 1999 and are slated to expand as Nigeria seeks to eliminate gas flaring.

INFORMATION ON NIGERIA

Financial Services

Seeking to develop a globally competitive financial sector, Governor Chukwuma Soludo, the CBN Governor from 2004-2009, set in place a mandatory directive for the 89 Nigerian banks (in existence in 2004) to grow their shareholders funds from the previous minimum capital requirement of N2 billion to N25 billion by December 31, 2005. At the end of the process, 25 of the banks achieved the minimum capital requirements through 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 capitalised banking sector consisting of 25 deposit money banks with enhanced capacity for rapid asset growth and branch expansion. A successful merger of two of the 25 banks further reduced the number of deposit money banks to 24.

The consolidation exercise led to an unprecedented growth in the years between 2005 and 2008. Banking sector assets and liabilities grew by 35.8% between December 2007 and November 2008 alone, to N14,913.7 billion. 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. Bank lending to private borrowers increased 17.9% in Q1 2008, and a further 13.6% in Q2, according to data from the CBN. However, March 2008 marked a turning point for the economy, when the first signs of the effect of the global economic downturn on Nigeria were visible. Oil prices fell from their high of US$144 per barrel and equity prices of quoted stocks began a steady decline, as foreign investors reduced their exposures. The effect on the Nigerian banking sector was especially significant due to its considerable exposure to the capital market as well as the oil & gas industry. Exposure to the capital market in the form of margin loans to operators and individuals stood at approximately N900 billion as at December 2008, representing approximately 12% of aggregate 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 shareholders funds). The economic downturn, combined with underdeveloped credit and risk management procedures as well as lax regulatory controls, led to significant impairment in asset quality, severe capital erosion, tightening liquidity, 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, embarked on a number of initiatives to reduce counterparty risk concerns and improve liquidity in the sector. These initiatives 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 for longer tenures and to accommodate money market instruments such as Bankers Acceptances and Commercial Papers (at its peak, the banks total outstanding commitments under the Extended Discount Window was N482 billion).

Towards the end of Soludo's term, a cloud of uncertainty dominated the banking sector. The general lack of transparency contributed to troubling symptoms in the banking sector which began to spread to other areas of the 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.

INFORMATION ON NIGERIA

Banking Reforms: 2009 - Present

The current Governor of the CBN, Sanusi Lamido Sanusi, was appointed in June 2009. The CBN's first action under the leadership of Sanusi was to close the Extended Discount Window ("EDW") in July 2009 and in its place guarantee all inter-bank placements. Notably, 90% of the total disbursements under the EDW between its opening and close were to 5 banks Afribank Nigeria Plc, Finbank Plc, Intercontinental Bank Plc, Oceanic Bank International Plc and Union Bank of Nigeria Plc, who were also the main net takers under Soludo's EDW arrangement. This prompted the CBN/NDIC to carry out a special examination of the 24 deposit money banks on liquidity, capital adequacy and corporate governance. The examination was carried out in two phases, 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 banks were:  NPLs representing 40% of their total loan portfolio.  Failure to meet the minimum liquidity requirement and capital adequacy ratios of 25% and 10% 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 each bank and injected a total of N420 billion (US$2.6 billion) into the 5 banks. At the conclusion of the second phase of the examination in September 2009,another group of 5 banks was found to have varying degrees of distress. Of the 5 banks, 4 were found to be in a grave situation, namely Equitorial Trust Bank ("ETB"), Bank PHB Plc ("Bank PHB"), Spring Bank Plc ("Spring") and Wema Bank Plc. As with the initial 5 banks, the executive management of ETB, Bank PHB and Spring Bank were removed. Wema Bank PIc came under new management in June, 2009 and therefore the management was held responsible for the situation in the bank and were given until June 2010 to recapitalise the bank. Unity Bank was adjudged to have sufficient liquidity but fell short of the statutory required capital adequacy. Accordingly, the CBN ordered Unity Bank to recapitalise before June 2010. To ensure stability in the banking sector, the CBN announced that it would offer additional liquidity support through term loans, totalling N200 billion (US$l.3 billion).

The CBN's rationale for intervening was to resolve the immediate liquidity challenges in the country's banking system 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 sector by reducing statutory limits and guaranteeing inter-bank placements. To increase transparency, the CBN ordered all banks to report their results to September 2009 under a prescribed pro-forma which would ensure adequate and consistent levels of disclosures. To date, there has been no run on the Banks where CBN intervened and inter-bank rates have dropped significantly.

To manage the effects of its intervention, the CBN facilitated the recovery of non-performing loans of the banks where it intervened and has reaffirmed its guarantee of the domestic inter-bank market, guaranteed foreign creditors/ correspondent banks' credit lines to Nigerian banks and maintained effective communication 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 it intervened in are reported to have recovered about N198 billion of non-performing loans. However, there was an 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 Spring Bank Plc. Afribank Plc was renamed Mainstreet Bank Limited, Bank PHB renamed Keystone Bank Limited and Spring bank Plc renamed Enterprise Bank Limited, with new management teams installed in the three banks. The CBN also announced plans to inject 679 billion naira ($4.5 billion) through the Asset Management Company of Nigeria into the three nationalized banks in a further step to restore stability in the banking system.

INFORMATION ON NIGERIA

The Asset Management Corporation of Nigeria (AMCON) The Asset Management Corporation of Nigeria (AMCON) was established to acquire the toxic assets of banks in exchange for liquid assets (i.e. Federal Government guaranteed bonds). AMCON's objective is to assist Deposit Money Banks in improving their capital and liquidity positions and is expected to fuel the recovery of the capital market. Under proposed terms, the AMCON could have a capital base of up to US$67 million which will be jointly funded by the FMOF and CBN.

AMCON's management team is led by, Mr. Mustafa Chike-Obi (Managing Director) and three Executive Directors; Mrs. Mofoluke Dosumu, Mr. Hewett Benson and Mr. Abbas Jega responsible for Finance and Operations, 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 to twenty-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 N1.3 trillion each. The 1st 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 consideration bond, the second tranche to be used for working capital, while the third tranche was issued as additional Consideration 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 to reform the Nigerian financial system and ensure a more stable sector, repealed the universal Banking guidelines which had been in operation since 2000 and issued new rules and guidelines for the banking licenses regime. Titled Regulation on the Scope of Banking Activities & Ancillary Matters, No.3, 2010, the new rule and guidelines, according to the CBN are aimed at streamlining banking operations in Nigeria as well as reduce the exposure of the banks to higher operational risks. Henceforth only commercial banks; merchant banks, and specialised banks, which include non- interest banks, microfinance banks, development banks and mortgage 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 57 of the Banks and Other Financial Institutions Act Cap. B3 Laws of the Federation of Nigeria 2004, also stated that no bank shall establish, maintain or permit to exist, any related enterprise except pursuant to Sections 21(1) and 22(1) (c) of BOFIA and that such related enterprise must be a banking institution incorporated outside Nigeria with the permission of the CBN or a company jointly established by two or more banks with the approval of the CBN for the purpose of promoting the development of the money market or improving the delivery of banking services in Nigeria.

One of the rules required all banks holding universal banking license to divest from all non-banking businesses. Banks that wish to engage in non-core banking activities will need to transition into a non- operating Holding Company (HoldCo) structure. The banks, having consulted with their stakeholders and obtained all the relevant approvals submitted their plans on compliance with the new banking regime to the CBN in November 2010. Having received approval on their compliance plans, the banks commenced implementation 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 are expected to be more proactive and risk focused which will enhance the governance and control environment in the banking sector. More than likely, we could see the introduction of risk adjusted capital requirements and the separation of balance sheets with forced autonomy for banks' commercial and merchant banking businesses.

INFORMATION ON NIGERIA

The current banking reforms have forced Nigerian banks to effectively reveal the true state of their balance sheets and to implement strict governance and control processes. This has helped to contain widespread fears regarding the health of the banking sector and set the stage for the final phase of the CBN's reform agenda - a reconsolidation of the banking sector. Advisers have been appointed by the CBN to assist the Banks where it intervened 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 most banks, 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 the last 18 months are integrated into banks' operations going forward, thus creating a safer and well-regulated banking sector.

INFORMATION ON DELTA STATE

Delta State is one of the 36 constituent states of Nigeria set out in the Constitution of the Federal Republic of Nigeria 1999. The state was first carved out of the former Bendel State in 1991 with "Asaba" named as the capital. Delta state was once part of the Mid Western state (from 1963 to 1976) and later Bendel state, from 1976 to 1991.

The State comprises of 25 Local Government Councils as depicted in the map below and is ethnically diverse with numerous languages spoken in the state. The Delta North is the Igbo region, the Delta Central and Delta South is made up of Urhobo, Ijaw, Isoko, and Itsekiri.. Most inhabitants of the state practice Christianity.Others practice African Traditional Religion and very few are muslims..

LOCATION The State is located in the western part of the Niger Delta. It is situated between longitudes 5◦00’E and 6◦45’E and latitudes 5◦00’N and 6◦30’N. The state occupies a total land area of 18,050km with a coastline of approximately 163km on the Atlantic Ocean. It is bounded in the East by Anambra and Rivers states, in the North 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, while Warri is the economic nerve centre of the state and also the most populated and is located in the southern end of the State.

POPULATION By the 1963 census, the population of the area constituting the state at that time was 1,456,541 which rose to about 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. Between 1952 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 administrative divisions of Urhobo, Warri and western ljaw received more immigrants accounting for 38.60, 15.64 and 36.16 per 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 and western ljaw divisions. On the other hand, of the 13,870 persons that migrated from the State in the same period, the Urhobo division accounted for 76.77%, while other divisions recorded lower percentage. The high percentage of emigration from Urhobo division was due to the fact that most of the Urhobos and Isokos were migrant farmers.

INFORMATION ON DELTA STATE

Delta State 2006 Census by Local Government Areas

Delta State had a population of 4,112,445 in 2006. The population distribution for the 25 local government areas in the State is contained in the table below with Ughelli North as the most populated and Patani the least populated

AREA MALE FEMALE TOTAL

SN LOCAL GOVT. AREA LOCAL GOVT. H/Q (Sq.KM)

1 Aniocha North Issele-Uku 410 52,448 51,614 104,062

2 Aniocha South Ogwashi-Uku 936 69,224 72,821 142,045

3 Bomadi Bomadi 170 43,435 42,581 86,016

4 Burutu Burutu 1,928 106,169 101,808 207,977

5 Ethiope East Isiokolo 462 101,596 99,346 200,942

6 Ethiope West Ogharefe 575 102,750 99,962 202,712

7 Ika North East Owa-Oyibu 501 91,431 91,388 182,819

8 Ika South Agbor 460 82,214 84,846 167,060

9 Isoko North Ozoro 447 71,948 71,611 143,559

10 Isoko South Oleh 643 119,167 115,980 235,147

11 Ndokwa East Aboh 1,796 52,306 50,918 103,224

12 Ndokwa West Kwale 941 73,842 76,182 150,024

13 Okpe Orerokpe 470 65,270 63,128 128,398

14 Oshimili North Akwukwu-Igbo 516 58,101 60,439 118,540

15 Oshimili South Asaba 324 76,078 73,954 150,032

16 Patani Patani 266 34,307 33,084 67,391

17 Sapele Sapele 469 86,167 88,106 174,273

18 Udu Otor-Udu 163 71,813 70,667 142,480

19 Ughelli North Ughelli 835 160,550 160,137 320,687

20 Ughelli South Otu-Jeremi 760 107,730 104,908 212,638

21 Ukwuani Obiaruku 352 58,890 60,144 119,034

22 Uvwie Effurun 95 93,999 94,729 188,728

23 Warri North Koko 2,270 70,446 65,703 136,149

24 Warri South Warri 552 158,402 153,568 311,970

25 Warri SouthWest Ogbe-Ijoh 1,709 61,026 55,512 116,538

Grand Total 18,050 2,069,309 2,043,136 4,112,445

Source: 2006 Census Final Results Published in the Federal Republic of Nigeria Official Gazette; No.2, Vol.96 (Feb., 2009).

INFORMATION ON DELTA STATE

TOPOGRAPHY The south and central areas of the State are essentially flat lands with poor drainage, swamps and vast estuaries. In the northern areas, the topography ranges from low-lying plains to undulating terrains with low hills and valleys.

SOIL CONDITIONS Generally, the soil of the northern areas of the State have a very deep profile, heavy leaching and good drainage with sandy textured surfaces, excellent physical properties and good water holding capacity that allow for the cultivation of a wide range of crops. The southern and coastal parts of the State have estuarine alluvial soil deposits which are generally waterlogged, structure-less, grey in colour with a silt clay texture but it is among the most fertile soils in the State.

CLIMATE The State has a tropical climate marked by two seasons: dry and wet. Average rainfall ranges from 1910mm in the northern part to 2670mm in the coastal areas of the State.

Political History Delta 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 12 local government councils which were increased to 25 in 1996. The State capital is Asaba. Other major towns are Warri, Effurun, Sapele, Ughelli, Agbor, Bomadi, Oleh, Ozoro, Kwale, Ogwashi-Uku, Abraka, Oghara and Burutu. 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 as indicated in the Table below:.

Table 1.2 Military Administrators and Governors of Delta State: 1991 to 2010

Name Designation Period

Group Capt. Luke Chijiuba Ochulor Administrator 28 August 1991 – 2January 1992

Olorogun Ovuodoroye Felix Ibru Governor 2 January 1992 – 17 November 1993

Police Comm. Abdulkadir Shehu Acting Administrator 17 November 1993 - 10 December 1993

Col. Bassey Asuquo Administrator 10 December 1993 - 26 September 1994

Group Capt. Ibrahim Kefas Administrator 26 September 1994 - 22 August 1996

Col. John Dungs Administrator 22 August 1996 - 12 August 1998

Navy Capt. Walter Feghabo Administrator 12 August 1998 - 29 May 1999

Chief James Onanefe Ibori Governor 29 May 1999 - 29 May 2007

Dr. Emmanuel Eweta Uduaghan Governor 29 May 2007 - present

INFORMATION ON DELTA STATE

Delta State: Comparative Advantages Delta State has a variety of resources and facilities which confers on it significant comparative advantages over other states in the federation. These resources if well-harnessed and utilised can be of tremendous value in developing 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 of development challenges confronting it.

Economy Delta State’s economy is diverse but largely driven by crude oil earnings. There are huge potentials in the informal and other sectors such as agriculture. These are largely underdeveloped because of overemphasis on crude oil and gas.

Delta State Budget and Expenditure Profile Delta State annual budget grew from N8.58 billion at inception of the civilian administration in 1999 to N187.22 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 billion in September 2010. The growth in expenditure between 1999 and September 2010 was due largely to increased allocation from Federation Account Allocation Committee (FAAC) following the implementation of the 13% oil derivation revenue principle by the Federal Government as well as higher global oil prices and increased Internally Generated Revenue (IGR).

Recurrent expenditure grew from N5.45 billion in 1999 to N63.04 billion in September 2010. This can be attributed to expansion in the establishment, staffing and running of democratic institutions, strengthening of the 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 in the transport, environment and energy sectors that have improved the quality of life of the indigenes and increased socio-economic activities. Precisely, capital expenditure increased from N2.36 billion in 1999 to N56.84billion in September 2010.

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Delta State Sectoral Share of GDP

It 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 National Bureau of Statistics and from the Report of study commissioned by the Delta State Ministry of Economic Planning, Delta State’s largest sectoral contribution to the National GDP is Oil & Gas. Other important sectors in terms of output are agriculture (10.46% in 2005 and 10.43% in 2008) and manufacturing (7.59% in 2005 and 6.98% in 2008). Wholesale and retail trade share of GDP rose from 3.15% in 2005 to 3.58% in 2006 before declining to 2.23% in 2008. Similarly, the transport sector’s contribution to GDP fell from 2.79% in 2006 to 2.44% in 2008.

Although the contribution of these sectors may not be as significant as crude oil and gas, they provide the bulk of 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 figures below 2%.

The dominance of the State’s output by crude oil and gas has challenged the State to develop long-term policies and programmes to strengthen other critical sectors to enable her realise its full economic potentials and put it on the path of sustainable growth and development. Consequently, the State has developed a 10 year plan known as Delta Vision 2020.

Notably, oil and gas sector remains strategic to the growth and development of the State. Efforts are being made to attract more oil companies to the State. The State government has constituted two committees to take advantage of the Local Content Act and the National Gas Master Plan to attract investors to participate in the oil and gas industry through appropriate incentives under Public Private Partnership (PPP). The main focus is to use the high revenue accruing from the sector to diversify the economic base of the State and pursue economic growth and development based on the non-oil sector. Thus, emphasis is being shifted to such sectors as agriculture, tourism, commerce and industry. This is the idea behind the concept “Delta without oil”

Delta State Development Strategy: The Three-Point Agenda Delta State has witnessed considerable progress under the stewardship of His Excellency, Dr. Emmanuel Uduaghan, who introduced the Three-Point Agenda:

 Peace and Security;  Human Capital Development; and  Infrastructure Development.

Peace and Security The State recognises that the absence of peace and security is a major constraint to the attainment of her economic potentials as it discourages new private sector investments and Foreign Direct Investment (FDI). It could also have adverse effect in terms of the realisation of existing investment potentials. In this regard, the strategic priority of the government is to significantly reduce the incidence of youth restiveness and communal conflicts in order to create a conducive environment for business, wealth creation and employment generation.

Towards this end, the Delta State Security and Waterways Committee was established with a core mandate to monitor and report on all issues that may breach peace and security in the riverine areas of the State.

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Government is also proactively engaging traditional rulers, chiefs, youth leaders, market women, and security agencies to resolve conflicts, promote peace as well as sustainable development. In terms of developing oil producing communities to reduce social tension and meet community expectations, Delta State Oil Producing Areas Development Commission (DESOPADEC) was created with the mandate to promote physical and social infrastructural development in oil bearing communities with 50% of the monthly 13% derivation fund accruing to the State.

Human Capital Development A major development priority in Delta State is human capital development. The State has numerous policies and programmes in place covering education, healthcare, potable water, sanitation, public utilities and empowerment to achieve rapid and sustainable economic development.

A primary objective of the State is to provide accessible and affordable healthcare services with a view to increasing 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 and access to educational opportunities by all Deltans. Government is pursuing programmes that will enhance adequacy of schools. Some of the programmes in the education sub-sector include: re-opening of schools shut during past ethnic crises; rehabilitation of dilapidated classrooms and construction of new ones; payment of examination fees for secondary school students; bursary schemes and subsidised fees for students of tertiary institutions; expansion of instructional and infrastructural facilities in tertiary institutions; employment of teaching 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 initiated programmes such as Delta Micro-credit Programme (DMCP), the Youth Empowerment through Agriculture (YETA) and other collaborative interventions with various local and international agencies/institutions. The Delta Micro-credit Programme is a model in the country and has won the State several awards. It has so far positively empowered many Deltans.

Infrastructure Development Infrastructure is a major driver of economic growth and development. The State applies a higher percentage of her budgets to the implementation of strategic infrastructural projects. To this end, the State is implementing 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 of Koko Export Free Zone; and the Warri Industrial Business Park.

Challenges of the Future In spite of the high potentials for growth and development, Delta State has numerous challenges which if not tackled could hamper prospects for future development. The major challenges are:

 Governance – Problems of security, maintenance of law and order and poor service delivery to meet expectations.  Corruption - Corrupt practices, poor accountability and transparency in the public and private sectors.  Overdependence on oil and gas – Leading to neglect of agriculture, commerce, industry and other non-oil sectors.

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 Inadequate power supply – Imposing major constraints on social and economic activities.  Environmental pollution and degradation – Resulting in adverse effects on health, environment and biodiversity.  Transport infrastructure – There are inadequate motorable roads and limited inter-modal transport linkages.  Narrow industrial base – Limited infrastructural facilities and enabling environment to facilitate rapid industrialisation process.  Unemployment – Which fuels restiveness, conflict and threat to security, law and order especially among 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 of optimally using its resources (including crude oil and gas) to create wealth and serve as disincentive to 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 development potentials of the State.

Environmental Degradation The physical environment of the State exhibits a number of trends: biodiversity loss, declining air and water quality, poor waste management and unsustainable agricultural practices. Activities of oil and gas companies have caused considerable pollution and environmental degradation in oil producing communities.

Delta State Revenue Profile The State has historically been mainly dependent on oil and gas revenues, deriving over 85% of her total annual revenue from FAAC. The table and figure below shows that revenue from FAAC to the State increased by 84% from N95 billion in 2005 to N175 billion in 2008 but fell by 11.5% to N155 billion in 2010 due to the lower world crude oil prices, global economic meltdown and crisis in the Niger Delta area which reduced the State’s oil production figures.

The State’s Internally Generated Revenue (IGR) accounts for less than 15% of total revenue. However, it increased by 135% from N11 billion in 2005 to N26 billion in 2010. It is important to note that the IGR derives mainly from taxes on salary incomes from the oil and gas sector.

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Table1.3 Delta State Revenue from FAAC and IGR (N’ million)

Period Revenue from FAAC IGR

2005 91.26 12.46

2006 114.92 12.60

2007 93.94 11.99

2008 158.26 17.42

2009 147.35 20.36

*2010 119.74 19.29

*2010 FAAC and IGR figures are as at September 30

Source: Reporting Accountant’s Report Figure: FAAC Revenue and IGR of Delta State (N’ billion)

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Brief Profile of the Executive Council Members The Delta State Executive Council is headed by His Excellency, Dr. Emmanual Eweta Uduaghan. The profile of each member of the Delta State Executive Council are stated below:

Dr. Emmanuel Eweta Uduaghan – Executive Governor, Delta State Dr Uduaghan was born on 22nd 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 from 1975-1980 where he graduated as a medical doctor. Dr. Uduaghan practised as a medical doctor with various hospitals both within the public and private healthcare system between 1983 and 1999, before joining the Delta State Government as Commissioner for Health in 1999.

He was the Secretary to Delta State Government from 2003 to 2007, when he succeeded former Governor James Ibori as the Governor of Delta State. He was re-elected in April 2011 and sworn-in on May 29, 2011 for a second term. He has received numerous awards including Central Bank of Nigeria Award on Micro-Credit for 3 consecutive years (2008, 2009 & 2010), most outstanding Commissioner in South-South as Delta State Commissioner for Health, Kwame Nkruma Leadership Award, Thisday Newspaper Award on Infant and Maternal Mortality Programme.

Professor Amos Agbe Utuama, SAN – Deputy Governor of Delta State Professor Utuama was born on 5th June, 1947. He graduated with LL.B (Hons.) from the University of Lagos in 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 Honourable Commissioner for Justice in 1999, a position he held till 2007 when he resigned to contest the general elections as running mate to Dr. Emmanuel Eweta Uduaghan. While serving as Attorney General and Honourable Commissioner for Justice, he served on numerous State Councils and committees among which are the Delta State Executive Council, 1999 to 2003, Delta State Security Council, 1999 to 2003 and Delta State 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 the legal profession. His contribution to national service in both professional and official capacities spans a host of offices, bodies and committees.

Charles Amajuoritse Ajuyah SAN-Honourable Commissioner for Justice and Attorney General Charles Amajuoritse Ajuyah was born on the 24th of May 1960. He graduated with a Bachelor of Science Degree in Business Administration from the University of Lagos in 1983. He furthered his academic pursuit by proceeding to University of Benin, from where he graduated with a Bachelor of Law degree in 1987 and was called to the Nigerian Bar in 1988.

He commenced his working career with the Law firm of T.J. Onomigbo Okpoko & Co, where handled cases involving Constitutional law, Revenue and Tax Laws, Environmental & Industrial Laws and Administrative law. He has been a partner in firm since 1989. He was appointed and sworn in as Notary Public for Nigeria in 2000 and was elevated to the rank of Senior Advocate of Nigeria in 2008. In 2009, he was appointed Commissioner, Tax appeal Tribunal for the South South zone of Nigeria He was appointed the Attorney General and Commissioner for Justice in July 2011.

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Mr. Bernard Oboatarhieyeren Okumagba – Honourable Commissioner for Finance Mr. Okumagba was born on the 7th of April, 1967. He graduated from University of Nigeria Nsukka in 1987 with a B.Sc. in Accountancy (2nd 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 Financial Planning & Budget and Credit & Marketing Divisions. He left Oceanic Bank in 1994 to join Crystal Bank of Africa Plc as a Deputy Manager in the Risk Management Division. From 1996 to 2002, he worked with Fidelity bank Plc in the Risk Management Division and rose to the position of Senior Manager, Corporate Banking Division. He joined UBA in 2004 and left in August 2007 following his appointment as Commissioner in the Delta State Executive Council. He was appointed the Commissioner for Economic Planning in August 2007, a position which he held up till November 2010, when he was redeployed as Commissioner for Finance. He was re-appointed Commissioner of Finance in July 2011.

RT. Hon. (Chief) Funkekeme Solomon-Honourable Commissioner for Works RT. Hon. (Chief) Funkekeme Solomon was born on April 21, 1962. He obtained a Bachelor of Arts degree in English and Education from Bendel State University, Ekpoma in 1989 and a Master of Science in Corporate Governance 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 as a media consultant. In 1999, he was elected member Delta State House of Assembly (Burutu II), where he served 3 consecutive terms uptill 2011. While in the house, he held various appointments, including Minority Leader (1999-2003), Chairman-Arts and Culture Committee (2005 to 2007), elected deputy speaker of the House of Assembly ( 2007-08) and was also the Chairman Public Accounts Committee (2008-11). He was appointed the Commissioner for Works in July 2011.

Dr. Joseph Sisanmi Otumara –Honourable Commissioner for Health Dr. Otumara was born on the 16th of December, 1960. He graduated as medical doctor from the University of Lagos in 1988.

He commenced his career as Medical Officer, General Hospital Jahun, Jigawa State in 1989 before becoming a Medical Officer in charge of Birch Hospital, Warri. He founded Alpha Clinic in 1993 and was the Medical Director 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 under the regime of Chief James Ibori. He became commissioner for housing in 2006 and later the Commissioner for Health from 2007 to May 2011. Dr. Otumara has won many awards which include Merit Award and Certificate of Excellence as Local Government Chairman of the year in year 2000, Merit Award by the Grassroots Hall of Fame as the most outstanding Local Government Chairman of the year in 2001. He was re-appointed the Commissioner for Health in July 2011.

Chief (Mrs) Betty Oghometite Efekodha – Honourable Commissioner for Women affairs Chief (Mrs) Efekodha was born on 5th May 1955. She graduated with a National Certificate in Education from College of Education, Warri in 1983 and later obtained a Bachelor’s degree in Education Administration/English from the University of Port-Harcourt in 1990. She is a Fellow of the Chartered Institute 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 of Commerce, Warri in 2002, and then commenced her political career. She served in various capacities within the Peoples Democratic Party in Delta State including-State Co-ordinator, Women for Change Initiative;

INFORMATION ON DELTA STATE Director, 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 Women Development in 2007 and held the position till 2011. She was appointed the Commissioner for Women Affairs in July 2011.

Hon.Dr. Chris Oghenechovwen-Honourable Commissioner for Water Resources Hon.Dr. Chris Oghenechovwen was born on the 22nd of July 1957. He graduated as a medical doctor from University of Ibadan in 1982.

He commenced his working career with Jos University Teaching Hospital (JUTH) in August 1982 and did a brief stint at Police Command, River State (as a corper) and in private practice before returning to JUTH in 1985, where he was till 1992. He was with Delta State Hospital Management Board from 1992 to 1997 and Effurun clinic, Effurun from 1997 to 1999, from where he joined politics. He was appointed Special Assistant to Hon. Commissioner for Health and held this position from 1999 till 2002. He was Director of Youth Mobilisation, Ibori Campaign Organisation (2002-3), Member, House of Representatives (2003-07) and State Director of Protocal (2007-09) In 2009, He was appointed Commissioner for Water Resources Developmentand was re-appointed to the same post in July 2011.

Sir Patrick Othuke Ferife- Honourable Commissioner for Lands, Survey & Urban Development Sir Patrick Othuke Ferife was born on the 18th of March 1964. He graduated with a Bachelor of Pharmacy degree 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. And served in various capacities till 1999. He was Managing director of D-Glopa Nigeria Limited between 1999 and 2003. He commenced his political career with an appointment to the Board of Directors Hospital Management Board, Delta State as a member in 2003 and held this position till 2006. He was later appointed Chairman Board of Directors, Delta State Printing and Publishing Company (2006-7) and Special Project Director, 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 Environment Mr. Omare Frank was born on November 15th, 1967. He graduated with a B.Sc. in Banking & Finance from Rivers State University of Science and Technology in 1998 and a post graduate diploma in Public Administration from University of Benin in 2004.

In 1999, he was the Personal Assistant to the Governor on Youth Development, Delta Sate, a post he held until 2003, when he was promoted to Senior Special Assistant to the Governor on Youth Development. In 2006, he was appointed Honourable Commissioner Bureau for Special Duties. In 2007, he was chairman of campaign mobilization for the Peoples Democratic Party (PDP), Delta State. In 2008, he was chairman, Asaba Capital Beautification and Sanitation Task Force. That same year, he became Chairman, Delta State Waste Management Board. In 2009, he became the Commissioner for Housing, a position he held till May, 2011. He was appointed the Commissioner for Environment in July 2011.

Hon. (Barr) Misan Raphael Ukubeyinje-Honourable Commissioner for Agriculture & Natural Resources Hon. (Barr) Misan Raphael Ukubeyinje was born on the 30th of May 1967. He graduated with a Bachelor of Law (LL.B) from Bendel State University, Ekpoma in 1991 and was enrolled as Barrister & Solicitor of the Supreme Court of Nigeria in 1992.

He commenced his legal practice with Addi Beji & Co (1993-94) after doing his mandatory 1 year National Service 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 re- elected for another four years in 2003. He served in different capacities between 2007 and 2011 within the State People Democratic Party hierarchy. He was appointed the Commissioner for Agriculture and Natural Resources in July 2011. 50

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Professor Patrick Muoboghare-Honourable Commissioner for Basic/Secondary Education Professor Patrick Muoboghare was born on the 29th of May 1952. He graduated from University of Ibadan with a Bachelor of Education (1981), a Master of Education in 1983 and Ph.D in 1986. He is a member of the Nigeria Association for Physical, Health Education, Recreation, Sports and Dance (NAPHER-SD) and National Association of Sports Science and medicine (NASSM).

He commenced Teaching and Administration since 1981. He has held several key appointments in the course of 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 and 2005-09. 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 Basic and Secondary Education in July 2011.

Barrister Christopher Chike Ogeah-Honourable Commissioner for Information Barrister Christopher Chike Ogeah was born on the 23rd of October 1961. He graduated from University of Lagos with a Bachelor of Psychology degree in 1983 and a Bachelor of Law degree in 1988. He was enrolled as 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 (National Planning Commission). He practiced law with the firm of Chike Ogeah and Co between 2001 and 2003 and went back to work as a Special Assistant to Chief Economic Adviser to the President in 2004. He was also the National Coordinator of State Economic Empowerment Development Strategy between January 2004 andAugust 2005. He was the Managing Director/CEO of Skyway Aviation Handling Company from June December 2010 till May 2010 and a Director from June 2010 uptill April 2011. He was appointed the Commissioner 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 in History from the University of Lagos in 1987 and a Masters degree in Political History (2005) as well as a PhD in Social History (2009) from the Nnamdi Azikiwe University.

He commenced his career as Principal Personnel Assistant, Civil Service Commission (Bendel State) between from 1989 to 1991. In 1992 he transferred to the newly created Delta State as a protocol officer, and subsequently held various political offices until 2007, when he was appointed Hon. Commissioner for Local Government Affairs. In 2010, he was re-deployed to Ministry of Agriculture and Natural Resources as Commissioner and again redeployed to Ministry of Education as Commissioner in the same year, a position he held 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 in Economics from the University of Abuja in 2001.

He commenced his working career with Vine Impex (W/A) Ltd in November 2002. He worked for ECOBANK Nig Plc from 2006 to 2009, performing different functions within the operations unit and the marketing unit. He joined Oceanic Bank as an officer in January 2009 and functioned as the Assistant Branch Manager, (Mazfallah Branch) Karu-Abuja, from where he resigned in August 2009. He joined the Delta State Government in January 2010 as Special Assistant (Special Duties) to the Executive Governor of Delta State and was later promoted to Senior Special Assistant in February 2011. He was appointed the Commissioner for Special Duties (Youth Affairs) in July 2011.

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Paulinus Akpeki –Honourable Commissioner for Housing Mr. Akpeki was born on the 19th of January, 1953. He graduated from Dublin College of Technology with a Higher 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 political and 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 was Special Adviser on Information between January 1992 and November 1993. Between 1994 and 2010, he has held 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 Corporation Board (1999-04). In November 2010, he was appointed the Hon. Commissioner for Orientation and Communication a position he held uptil May 2011. He was appointed the Commissioner for Housing in July 2011.

Prof. Eghagha Oghenererukevbe Hope– Honourable Commissioner for Higher Education Dr Eghagha was born on 4th September 1959. He graduated from the University of Jos with a Bachelors degree 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 a stint with Ondo State University (1988-92) before returning to University of Lagos, where he was promoted to the rank of a professor in 2010. During the course of his academic career, he held various administrative, and community service positions; and also served as a consultant and resource person.. He has several publications and award to his name.

He has been a member of the Delta State Vision 2020 steering committee since 2009. Dr Eghagha was appointed Commissioner for Higher Education, Delta State from January 2009 to May 2011 and was re- appointed to the same post in July 2011.

Hon. Benson Igbakpa-Honourable Commissioner for Transport Hon. Benson Igbakpa was born on the 28th of August 1966. He graduated with a Bachelor of Business Administration Degree in 2004 and a Master of Public Administration Degree in 2009, both from Delta State University, Abraka.

Before he joined politics in 2001, he has had 14 years of work experience, with organisations that includes Chemiron International Limited and Vego Products Limited. He was an executive officer in the governor’s office before his election as an Honourable member into the Delta State House of Assembly, where served as deputy chief (2007-08) and deputy majority leader from 2008 till 2011. He was appointed the Commissioner for Transport in July 2011.

Mrs. Orezi Esievo – Honourable Commissioner for Special Infrastructure Mrs. Esievo was born on April 10, 1969. She graduated from the University of Benin with a Bachelor of Law degree 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, when she became media relations supervisor and community relations officer with The Shell Petroleum Company Nigeria Limited, western division, Warri. In 2006, she was appointed Hon. Commissioner for Culture and Tourism, Delta State. In 2008, she was appointed Hon. Commissioner for Special Duties, a position she held till 2011. She was appointed the Commissioner for Special Infrastructure in July 2011.

Dr. Anthonia Ifeanyi Ashiedu- Commissioner for Special Duties, Poverty Alleviation Dr. Anthonia Ifeanyi Ashiedu was born in Talata Mafara, Zamfara State.She graduated from the University of Ibadan in 1978 with a Bachelor of Education degree, she obtained a Master of International Law and

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Diplomacy from the University of Lagos in 1988 and obtained a PHD in Political Science from the University of Abuja in 2003.

Dr Ashiedu has served in several capacities both at the State and Federal levels of Government, some of which includes serving as a member of the committee that formulated the Nigerian National Poverty alleviation Policy in 1997. Her service to the nation spans about 33 years and She was first appointed as Commissioner for Special duties in charge of Micro Credit in 2010. She was appointed the Commissioner for Special Duties, Poverty Alleviation in July 2011.

Comrade Gloria Okulugbo-Honourable Commissioner for Multilateral Relations, Abuja Comrade Gloria Okulugbo was born on the 15th of March 1969. She graduated from the University of Jos in 1992 with a degree in Theatre and Communication Arts, She also obtained Msc. in International Relations from the same university in 2003. She is currently pursuing a Doctorate degree in International Relations from the University of Abuja

She 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 Multilateral Relations/Abuja in July 2011.

Mr Kingsley Eze Emu-Honourable Commissioner for Commerce & Industry Mr Kingsley Eze Emu was born on the 27th of December 1959. He holds a Bachelor of Science Degree in Sociology and a Masters degree in Industrial Sociology from the University of Ibadan in 1986 and 1988 respectively. 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 Finbank Plc. 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 Affairs Barrister Neworld Safugha was born on the 17th 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 of Nigeria in 2002.

In 2002, he became the Legal Adviser, Peoples Democratic Party, Bomadi L.G.A chapter and was made the coordinator of Delta South Senatorial District Electoral Campaigns. He served as Confidential Secretary to Former Speaker, RT. Hon (Engr.) Franc P. Enekorogha from 2006 to 2007. He was appointed the Commissioner for Special Duties, Local Government and Chieftaincy Affairs in July 2011.

Richard Mofe-Damijo –Honourable Commissioner for Arts & Culture Barrister Mofe-Damijo was born on July 6th 1961. He graduated from the University of Benin with B.A in Theatre Arts in 1983. He later obtained a Bachelor of Law degree from the University of Lagos in 2004 and was called to the bar in 2005.

Prior to his appointment into political office, Barrister More-Damijo has had over 20 years experience in Journalism and Acting. He was an Executive Director at Classique Magazine from 1989 to 1992 and the Publisher/Editor-in-Chief of Mister Magazine from 1992 to 1995. He was President/CEO of White Waters Limited from 1995 to 2008. Barrister Mofe-Damijo is a member of the Actors Guild of Nigeria, Nigerian Institute of Public Relations, Nigerian Institute of Management and was the pioneer president of the Nigerian Theatre 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 same position in July 2011.

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Mr. Ifeanyi Micheal Osuoza–Honourable Commissioner, Directorate of Project Monitoring Mr. Osuoza was born on the 19th of January 1967. He graduated with a National Diploma from Auchi Polytechnic in 1989, a Bachelor of Art in International Relations (2004) and a Master of Science in Strategic Studies (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 there joined Texas Armoring Global Limited in 1995 for 4 years. He was Chief Executive Officer of Tac Armoring Global Limited from 1999 till date. He also served on the Delta State Land Use and Allocation Committee from 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 24th of February 1967. He graduated with a Bachelor of Science in Sociology and Anthropology in 1998 from University of Benin and later obtained a Masters of Arts in Peace and Conflict Studies in 2007 from University of Ibadan.

He founded Pi-Moff Resources Nigeria Limited, a marine consultancy and engineering firm in 2001 and served as the Managing Director from birth till 2011. He commenced his political career as Secretary to Warri South West Local Government Council in 2002. Between 2003 and 2006, he was member of the Governing Board, NYSC Delta State and became special Assistant to the Governor of Delta State on Community Affairs between 2006 and 2007. He served as Member of Governing Board, Delta State Institute of Continuing Education from 2008 to May 2011. He has been the Chairman of Itsekiri Regional Development Committee since 2006. He was appointed the Commissioner for Special Duties (Oil & Gas) in August 2011.

Mr. Emetulu Charles Chukwuemeke- Honourable Commissioner for Energy Mr. Emetulu was born on the 26th of October 1966. He graduated with a National Certificate in Education in 1987 from Bendel State University and with a Bachelor of Art in Education in 1992 from Bendel State University.

He commenced his working career as a tutor with Joemax commercial College, Port-Harcourt (1988-89). He was Operations Manager, IFEM Nigeria Limited, Port-Harcourt from 1995 to 1998. He has been the Managing 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 Post Primary Education Board (2008-10). He was appointed the Commissioner for Energy in August 2011.

Mr. Onogba Oghenekewe Christian-Honourable Commissioner for Special Duties (NDDC/Braced Commission Liason) Mr. Onogha was born on the 27th 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 Special Assistant to the Honourable Commissioner, Ministry of Housing, Delta State. He was appointed the Commissioner for Special Duties (NDDC/Braced Commission Liaison) in August 2011.

Mrs. Queen Nkem Ikenchukwu-Honourable Commissioner for Millennium Development Goals Mrs. Ikenechukwu was born on the 17th 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 in psychology 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 St Luke Drug/Alchohol Rehabilitation Centre, UK between 1998 and 2007.

She founded the Agbor Youth and Women Development, Learning and Empowerment Centre in 2007 and was appointed a member Delta state Transition Committee, set up by His Excellency, Dr. Uduaghan in April 54

INFORMATION ON DELTA STATE

2007. She served as the Honourable Commissioner for Women Affairs, Community and Social Development between August 2007 and May 2011. She was appointed the Commissioner for Millennium Development Goals in August 2011.

Mr. Kenneth Oghenerhoro Okpara-Honourable Commissioner for Economic Planning Mr. Okpara was born on the 8th of February 1962. He graduated with a Bachelor of Science degree in Accountancy from University of Maiduguri in 1987 and a Master in Business Administration degree from Cambridge University in May 2011. He is a Fellow of Institute of Chartered of Nigeria, Fellow of the Chartered 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 the position of a Partner in 1995. He quitted Eyewunmi Rone & Co in 1998 to become Managing Consultant at Inter Consult and left in June 2005 to take up the role of Financial Management Consultant with the World Bank. He was promoted to Senior Financial Management Specialist in June 2006 and he held the post he uptill 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 7th of April 1962. She graduated with a Bachelors of Art degree in Philosophy from University of Lagos in 1984 and a Bachelors of Law degree from Lagos State University in 1992. She attended the Nigerian Law School and was called to the Bar in 1995. She further obtained a Masters of Law degree from the University of Lagos in 1997 and an MBA (Banking and Finance) in 2004. She is a member of the Chartered Institute of Arbitrators, International Bar Association and International Federation 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 to her legal practice. She was the chairman of both Umejei Microfinance bank, Ibusa and Ngegwe Microfinance Bank, Eleme from 1995 to 2007. She was elected as a Honourable Member into the Delta State House of Assembly for the term 2007-2011 and was also the Minority Leader during this period. She was appointed the 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 9th of August 1962. He graduated with a Bachelor degree in Sociology from University of Ibadan in 1987 and a Master in Public Administration degree from Lagos State University in 1998.

He commenced his post-degree career as a Manager with Crescent Hospital, Ibadan from 1988 to 1990. He was with Nigerian Drug Law Enforcement Agency (NDLEA) from September 1990 to October 1997 and moved to1st Marine Shipping Company, Apapa as an Administrative Officer, where he was till December 2002. He served has a Lecturer with Niger Delta University, Wilberforce Island from January 2003 uptil April 2004 when he was appointed Chairman, Delta State House of Assembly Service Commission, a position he held for 7 years. He was appointed the Commissioner for Special Duties (DESOPADEC) in August 2011.

Comrade Ovuozourie Macaulay- Secretary to the Delta State Government

Comrade Ovuozourie Macaulay was born on the 25th of October, 1960. He attended the National Institute for Public Information, Kaduna, the Institute of Management & Technology, Enugu, and the Enugu State University of Science & Technology. Before his appointment as a commissioner in Delta State, he worked as Public Enlightenment Assistant with the Federal Department of Information and was Controller, News and Current Affairs, Delta Broadcasting Service, Asaba. He was also a labour activist and held many offices in the Labour 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 specialized security training in countries like Israel and the United Kingdom, amongst others. He was the immediate past Commissioner for Power and Energy, Delta state, before his appointment as Secretary to the State Government in June 2011.

RISK AND MITIGATING FACTORS FOR THE PROGRAMME

There is a degree of risk involved when investing in securities. Prospective investors should therefore carefully consider the risks described below as well as the detailed information set out elsewhere in this Prospectus before making a decision regarding a purchase of the Bonds. Any of the following risks could result in a material adverse effect on the State’s financial condition, results of operations and ability to the Bonds. The risks may also have a material adverse effect on the revenue, costs and other estimates and assumptions underlying the financial projections shown in this Prospectus, causing actual operating results to be materially lower than those indicated in the financial projections. The risks described below are not the only risks facing either the securities or the Issuer. Additional risks and uncertainties not presently known to the Issuer or that the Issuer currently considers immaterial may also materially and adversely affect the securities. Investors should reach their own views or obtain such professional advice as they deem appropriate, before making a decision in respect of the Bonds.

Macroeconomic risks

1. Inflation risk: There is a risk that the rate of price increases in the economy deteriorates the returns associated with the Bond. Fixed rate bonds are most susceptible to this due to coupon being fixed at inception based upon expectations of the inflation rate. Inflation erodes the purchasing power of the currency thereby diminishing the real income of the bondholder.

Mitigating Factors: A central role of the Central Bank of Nigeria, like its counterparts in other countries, is containment of inflation. The CBN has adopted an inflation targeting framework. It is expected that this method will keep inflation at a level that is in line with the assumptions built into the coupon rate attached to this bond.

2. Interest rate risk: There is an inverse relationship between bond prices and interest rates, thus, there is a risk that bond prices will fall as interest rates rise. By buying a bond, the bondholder has committed to receiving a fixed rate of return for a fixed period. Should the market interest rate rise from the date of the bond's purchase, the bond's price will fall accordingly. The bond will then be trading 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 as the state government will redeem the bonds at par. Investors who dispose their bonds may be exposed to a variation in the principal amount received due to these fluctuations. However, market interest rates are a function of several factors such as the demand for, and supply of, money in the economy, the inflation rate, the stage of the business cycle as well as the government's monetary and fiscal 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 the FGN’s earnings. Crude oil prices are volatile due to business cycle and the concentration of supplies in regions that are politically explosive. The booms & busts experienced in the oil industry have usually hit Nigeria hard because of the country’s mono-product economy. A decline in the price of crude oil will reduce the funds available for distribution via the FAAC account. The State, like most of the other Nigerian States is heavily reliant on the FAAC account, as its main source of revenue, and will experience a drop in revenue with a decline in the price of crude oil.

RISK AND MITIGATING FACTORS FOR THE PROGRAMME

Mitigating 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; the success of this will increase its IGR thereby somewhat mitigating any shortfall from the federal account.

Political risks 1. Sovereign risk: Delta State is a constituent part of Nigeria. The principal repayment source for the Bonds 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 the Bonds will be severely compromised

Mitigating factor: The likelihood of Nigeria ceasing to exist is extremely limited and that of the State ceasing 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 State government. There is a risk that if there is a change in the political leadership of the State, the incoming administration might not carry on with the plan of the current administration. Thus, the proceeds 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 the administration in the State, or the use to which the proceeds of the Bond are put, the repayment source is from the FAAC account and the state’s IGR. Investors can therefore reasonably expect repayment of principal and receipt of the coupons due to them.

3. Change in the legal and regulatory environment for financial instruments: The issuance of the Bonds is based on Nigerian law in effect as at the date of this Prospectus. There is a risk that the statutory and regulatory environment will change and the policies that have created an enabling environment for the issuance of the Bonds will be amended.

Mitigating Factor: The Delta State Government and the respective regulatory authorities are committed 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 law or 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 of government 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 the revenue accruing to the government in the past.

RISK AND MITIGATING FACTORS FOR THE PROGRAMME

Mitigating Factors: The FGN has deployed political, military and social solutions to the problems in the Niger Delta. These solutions have ameliorated the problems somewhat as reported incidences of sabotage have dropped and the decline in oil production has reversed. It is expected that the government’s measures will create a lasting solution that will prevent further disruptions of the revenue stream.

Structural risks 1. Liquidity risk: There is a risk that when the Bonds are listed, the demand for them will be low thereby preventing investors from disposing of them easily or at prices that will provide them with a yield comparable to that obtained from other investments.

Mitigating factors: The Bonds will be listed on the NSE and dealers will be appointed to provide further liquidity. Furthermore, an Over-The-Counter market exists for state government bonds, and the continuous development and deepening of the bond market will help ensure that the Bond has liquidity. Notwithstanding, the Issuer cannot predict whether an active trading market will develop for the Bonds. Even if a trading market develops, the Bonds could trade at prices that may be higher or lower than the Issue Price, depending on many factors. However, there currently exists a market for state bonds especially given the continued growth in the number and financial clout of institutional investors.

2. Credit risk: Credit risk is the risk that the principal will not be repaid by the Issuer, thereby triggering an Event of Default with respect to the Bonds.

Mitigating factors: The Bonds are senior-ranking obligations of the State, payable from and secured by a first charge on the state’s revenues. The monthly appropriation from the state’s revenues toward the debt service obligations in respect of the Bonds to be raised under the Programme is authorized by a resolution duly adopted by the State House of Assembly, dated May 15, 2011. Projected cash- flows provide for total debt service coverage. Coupon payments and principal redemptions on Bond Issues would be adequately provided for by Sinking Fund balances. The management of the Sinking Fund shall be under the independent management of the Trustee.

Environmental Risk

Natural disasters may have an impact on the expected revenue streams or destroy some of the projects being constructed by proceeds of the Issue. This may have a negative impact on the projected cash flows expected to be generated by the State. There may also be negative environmental impact of respective projects proposed by the State. There is also the risk associated with the possibility that the working environment of Delta State civil servants could result to ill health, loss or injury capable of causing permanent disability which could interfere with the efficient running of the State or which could create liabilities for the State government with material impact on the state’s finances.

Mitigating factor:

Environmental impact analyses for prospective projects will be undertaken, negative impact assessed and measures for managing such impact will be proposed and applied. Furthermore, the State is in compliance with all environmental rules and regulations. These standards are constantly updated and enforced by the State to ensure a safe environment for its staff and citizens of the State. The State ensures that relevant safety rules are adhered to in the execution of all its projects.

FINANCIAL INFORMATION-HISTORICAL

LETTER FROM THE REPORTING ACCOUNTANTS

FINANCIAL INFORMATION-HISTORICAL

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The following are the significant accounting policies adopted by the State Government in its preparation of the financial statements:

1 Basis of Accounting1 The accounts have been prepared under the cash basis of accounting except as modified to accommodate the disclosure of outstanding long term obligations and investments. This means that transactions are recorded only when monies are received and paid within the given period, whether or not the receipts and payments are in respect of goods supplied or services rendered during that period and whether they relate to recurrent or capital expenditure or revenue.

2 Investments3 Investments held under Ministry of Finance Incorporated (“MOFI”) are stated at cost. Investments which form part of Capital Development Fund which are expensed under the cash basis of accounting are re- stated and disclosed in the statement of assets and liabilities.

3 Long Term Loans3 Long term internal and external loans written off under the cash basis of accounting are re-stated in the statement of assets and liabilities to accommodate their full disclosure in line with the standardised reporting format for Federal, States and Local governments

4 Capital Cost In line with the cash basis of accounting, capital expenditures are recognised in the year of occurrence only. 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 the public sector. 60

FINANCIAL INFORMATION-HISTORICAL

STATEMENT OF ASSETS AND LIABILITIES AS AT:

Dec. Dec. Dec. Dec. Sept. 2010 Dec. 2005 2009 2008 2007 2006

Notes N'm N'm N'm N'm N'm N'm

ASSETS

Cash & other liquid (4,623 1 17,595 7,773 11,938 6,800 802 assets )

Contributory pension yet 1,922 10,230 6,456 - - - to be remitted (cash)

Other balances 2 - - 649 751 1,312 1,330

Investments 3 6,552 5,774 5,774 5,441 24,844 36,316

Loans and advances 4 4,208 3,428 2,928 1,637 1,446 2,387

30,277 14,809 23,580 19,767 34,402 40,835

LIABILITIES

5 20,335 4,841 13,431 6,827 24,486 30,707 Capital development fund

Deposit for shares 6 - - - 3,075 - -

Special deposit accounts 7 4 4 4 4 4 4

Other government funds 9,599 9,599 9,599 9,599 9,599 9,599

Treasury clearance 8 339 365 546 262 313 525 accounts

30,277 14,809 23,580 19,767 34,402 40,835

FINANCIAL INFORMATION-HISTORICAL

STATEMENT OF REVENUE AND EXPENDITURE FOR THE PERIOD ENDED:

Sept Dec. Dec. Dec. Dec. Dec.

2010 2009 2008 2007 2006 2005

Notes N'm N'm N'm N'm N'm N'm

REVENUE

Opening Balance ------

Statutory 119,739 147,351 158,257 93,940 114,915 91,260 Allocation

Internally Generated 9 19,286 20,358 17,420 11,997 12,607 12,464 Revenue

Miscellaneous 18 1,331 160 266 130 55

Total Revenue 139,043 169,040 175,837 106,203 127,652 103,779

EXPENDITURE

Consolidated 1,998 1,968 1,494 4,969 2,895 1,346 Revenue Charges

Other Recurrent 10, 14 73,044 75,431 66,297 72,356 64,315 53,023 Expenditure

75,042 77,399 67,791 77,325 67,210 54,369

Surplus/(Deficit) of Revenue over 64,001 91,641 108,046 28,878 60,442 49,410 Expenditure

Loan Repayments (7,267) (7,861) (9,933) (9,794) (48,682) (14,521) (Public Debt Charges)

Balance 56,734 83,780 98,113 19,084 11,760 34,889

Transfer to Capital (56,734) (83,780) (98,113) (19,084) (11,760) (34,889) Development Fund

Closing Balance ------

FINANCIAL INFORMATION-HISTORICAL

NOTES TO THE ACCOUNTS

1. Cash and other liquid assets

Sept. Dec. Dec. Dec. Dec. Dec. 2010 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Current and other 17,255 (1,620) 7,227 11,676 19,393 (1,832) Accounts

Deposit Account - - - - (12,593) 2,634

Treasury Clearance 340 364 546 262 - - Accounts

Adjustments for - (29) - - - - repetitions

Unpresented cheques - (3,338) - - - -

17,595 (4,623) 7,773 11,938 6,800 802

2. Other balances

This represents the unamortised portion of the revenue bond issued by the State Government in 2001.

3. Investments

Sept. Dec. Dec. Dec. Dec. Dec. 2010 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Quoted Investments 918 918 918 893 14,559 14,491

Unquoted Investments 5,634 4,856 4,856 4,548 10,285 21,825

6,552 5,774 5,774 5,441 24,844 36,316

FINANCIAL INFORMATION-HISTORICAL

NOTES TO THE ACCOUNTS

Investments were stated at cost in the aforementioned years. Investment management is under the purview of the Ministry of Finance Incorporated (MOFI), an agency established by the State Executive Council.

4. Loans and advances

Sept. Dec. Dec. Dec. Dec. Dec. 2010 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Opening balance 3,428 2,928 1,636 1,256 940 1,821

Add: Movement for the 780 500 1,292 381 506 566 year

Closing balance 4,208 3,428 2,928 1,637 1,446 2,387

5. Capital expenditure & development fund

Sept. Dec. Dec. Dec. Dec. Dec. 2010 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Opening balance 4,841 13,431 6,827 24,486 30,707 23,235

Transfer from CRF 56,734 83,780 98,112 19,084 11,760 34,888

Profit on sale of investments - - 3,075 - - -

Capital Receipts (5.1) 15,598 5,856 15,867 36,559 47,999 18,755

77,173 103,067 123,881 80,129 90,466 76,878

Less:

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 30,707

FINANCIAL INFORMATION-HISTORICAL

NOTES TO THE ACCOUNTS

5.1 Capital receipts

Sept. Dec. Dec. Dec. Dec. Dec. 2010 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Value Added Tax 5,598 5,856 5,078 4,046 3,276 2,659

Internal Loans 10,000 - - 22,000 29,700 16,096

External Loans - - 1,856 - - -

Other capital receipts - - 8,933 10,513 15,023 -

15,598 5,856 15,867 36,559 47,999 18,755

5.2 Capital expenditure

Sept. Dec. Dec. Dec. Dec. Dec. 2010 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Economic Sector 18,552 24,935 25,700 22,692 22,946 12,573

Social Sector 4,624 9,070 10,570 9,694 15,445 12,915

Environmental Sector 15,301 26,558 32,894 20,786 19,832 15,892

General Admin. Sector 5,041 9,755 8,798 5,240 7,757 4,791

Contingency 9 49 - - - -

DESOPADEC 13,311 27,859 32,488 14,890 - -

TOTAL 56,838 98,226 110,450 73,302 65,980 46,171

6 Deposit for shares

This represents payments made at the end of the year for shares which were subsequently transferred in the first working week of the following year.

FINANCIAL INFORMATION-HISTORICAL

NOTES TO THE ACCOUNTS

7 Special deposit account This represents amounts held in trust by the State for pending court cases.

Sept Dec. Dec. Dec. Dec. Dec. 2010 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Opening 4 4 4 4 4 4 balance

Additions ------

Closing 4 4 4 4 4 4 balance

8 Treasury clearance accounts Sept. Dec. Dec. Dec. Dec. Dec. 2010 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Opening balance 364 546 262 313 525 265

Add Out station treasury bank balances. (25) (181) - - - 260

Movement in TCOS outstation balances - 284 (51) (212) -

339 365 546 262 313 525

9 Internally generated revenue Sept. Dec. Dec. Dec. Dec. Dec. 2010 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Internally generated revenue:

Taxes 17,734 18,255 13,082 9,850 10,410 8,625

Fines and fees 738 1,171 2,113 1,199 827 98

Licenses 126 106 174 145 169 92

Earnings and sales 166 197 364 131 667 519

Rent on Govt. properties 164 117 194 160 147 101

Interest and dividend 358 512 1,489 467 387 1,033

Re-imbursement - - 4 45 - 572

Sale of Investment - - - - - 1,424

19,286 20,358 17,420 11,997 12,607 12,464

FINANCIAL INFORMATION-HISTORICAL

NOTES TO THE ACCOUNTS

10 Other recurrent expenditure

Sept Dec. Dec. Dec. Dec. Dec. 2010 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Personnel cost 39,819 33,950 31,258 31,742 21,479 17,583

Overhead cost 27,656 34,551 28,497 37,227 40,009 32,971

Pensions and Gratuities 5,569 6,930 6,542 3,387 2,827 2,469

73,044 75,431 66,297 72,356 64,315 53,023

11 Statutory allocation

This represents the State Government’s share of the revenue collected and distributed by the Federal Government. The basis of allocation varied over the years and the most current, which is in accordance with the Finance (Control and Management) Act Cap F26 LFN 2004 is as follows:

Revenue sharing basis % Federal Government 41.28 State Government 28.11 Local Government Areas 21.07 13% Derivative Fund 7.61 Deductions: Cost of collections 1.93 Total 100.00

Source: www.fmf.gov.ng (March 2010 Statutory allocation)

* TCOS – Treasury cash offices

FINANCIAL INFORMATION-HISTORICAL

NOTES TO THE ACCOUNTS

12 Claims and litigations

DTSG in its ordinary course of business is presently involved in 25 cases. According to the State Government, 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 claims are likely to have any material or adverse effect on the State. Details of the pending litigations are presented in the table below and overleaf:

S/ Suit No. Parties Claim (N) N 1 FHC/A/SB/135/10 United Sadia Fishing Industries Vs Chief M.C. Oboh and 6 ors 140,000,000.00 2 HCO/11/2002 Edward Ugeh Vs A.G. & Commissioner for Justice, DTS & 2 ors 1,000,000,000.00 3 A/223/2006 Benedict Onyedi Vs 1. State Pri. Edu. Board 2. Attorney-Gen. DTS. 10,000,000.00 4 A/57/2010 Engr. Amaechi Ogbolu Vs Executive Gove. DTS. 300,000.00 Emmanuel Sonkwu & Ors. Vs Principal Akwukwu-Igbo Gram. Sch II 5 Aku/46/2010 & Ors 1,000,000.00 6 A/248/2009 Paul Alimile Morgan Esq. Vs Hon. Comm. For Lands 12,329,545.00 7 A/252/2008 Innocent Amiaka Vs The Gov. Of DTS. 7 Ors 5,000,000.00 8 A/101/2008 Chike Egbuna & Ors Vs Comm. For Lands & Ors 100,000,000.00 9 A/95/2010 Bank PHB Plc. Vs Hon. F.E. Owete & Ors 100,000,000.00 10 A/198/2009 O & E (Nig) Ltd. Vs Attorney-Gen. DTS & Ors 500,000,000.00 11 O/4/2010 Dr. M. I. Ogbangwo Vs H.M.B., DTS & Ors 500,000,000.00 12 A/155/08 Benson Majemite Vs Hon. Comm. For Lands 100,000,000.00 13 A/6/04 Barr. Ejomauwe Junior Efe Vs. Gov. DTS 14,000,000.00 14 A/148/2005 Chief U. Adimkpayah & Anor Vs HAG/CJ & Anor. 416,000,000.00 15, A/272/2009 Mr. Paul Chidi E. Vs Mr. Emmanuel Uduaghan & Ors 10,000,000.00 16 A/62/2010 Mr. Charles J. Akaya Vs Hon. Talib Ebite & Ors 8,500,000.00 17 A/29/2010 Mr. O. Chiadikabia Vs The Gov. DTS & Anor 8,500,000.00 18 A/210/2010 Ground Conditions Ltd. Vs DTS Government & Ors 123,247,277.37 19 A/211/2010 Ground Conditions Ltd. Vs DTS Government & Ors 34,986,976.87 20 A/212/2010 Ground Conditions Ltd. Vs DTS Government & Anor 19,040,000.00 21 ID/NRJ/1/2009 KAY Que Investment Ltd. Vs Executive Gov. DTS & Ors 179,491,265.72 22 LD/295/2010 Contemporary Design Associates & Ors Vs DTS Government & Ors 4,477,515,994.48 23 LD/657/2010 Fenek Ventures Ltd. Vs DTS Government & Ors 9,000,000.00 24 A/231/2010 Chief Sam Anokam Vs Hon. Comm. For Lands & Ors 9,229,302.22 25 A/14/2008 Chief Sam Anokam Vs Hon. Comm. For Lands & Survey & Ors 18,526,448.50 Total 7,796,666,810.16

FINANCIAL INFORMATION-HISTORICAL

NOTES TO THE ACCOUNTS

Commercial loans as at 31 December 2010 S/N Lender Principal as Dec. 2010 (N) Purpose

Internal Loans

1 First City monument Bank 8,750,000,000.00 To bridge the funding gap in the budget

2 Oceanic Bank 9,040,277,777.68 To bridge the funding gap in the budget

3 Zenith Bank Int’l 4,521,920.675.99 To bridge the funding gap in the budget

4 Access Bank 4,518,357,037.94 To bridge the funding gap in the budget

External Loans

1. Multilateral debt 1,030,415,143.71 Loans transferred from Bendel state

Total 27,860,970,635.33

14 Unsubstantiated expenditure

Sept Dec. Dec. Dec. Dec. Dec. 2010 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Unvouched expenditure - - 44,129 - 90,597 46,411

Queried vouchers 5,989 1,225 12,542 205 2,277

Total - 5,989 45,354 12,542 90,802 48,688

Unvouched 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 without proper authorisation or in excess of approved budget amount.

No adjustment was made in respect of both categories of amounts since cash was spent and to adjust for such expenditure would overstate cash balances in the relevant years.

FINANCIAL INFORMATION-HISTORICAL

NOTES TO THE ACCOUNTS

15 Statement of adjustments to assets and liabilities

I. Cash and bank balances Sept Dec. Dec. Dec. Dec.2 Dec. 2010 2009 2008 2007 006 2005

N’m N’m N’m N’m N’m N’m

Balance as per audited financial 17,862 (4,356) 14,496 12,205 7,067 1,069 statements

Adjustments :

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 6,800 802

II. Investments (MOFI) Sept 2010 Dec. Dec. Dec. Dec.20 Dec. 2009 2008 2007 06 2005

N’m N’m N’m N’m N’m N’m

Balance as per audited 10,236 9,458 9,458 9,125 24,858 36,330 financial statements

Adjustments :

Investments written off:

Liquidated companies (9) (9) (9) (9) (9) (9)

Unsubstantiated shares (5) (5) (5) (5) (5) (5)

Shares used as (3,670) (3,670) (3,670) (3,670) - - guarantee

6,552 5,774 5,774 5,441 24,844 36,316

FINANCIAL INFORMATION-HISTORICAL

NOTES TO THE ACCOUNTS

III. Loans and advances

Sept Dec. Dec. Dec. Dec. Dec. 2010 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Opening balance as 5,207 4,707 3,415 3,035 2,529 1,963 per audited financial statements

Adjustments (cumulative):

Special imprest (139) (139) (139) (139) (139) (139) written off

Other loans written (1,640) (1,640) (1,640) (1,640) (1,450) (3) off

Adjusted opening 3,428 2,928 1,636 1,256 940 1,821 balance

IV. Special project account

Sept Dec. Dec. Dec. Dec. Dec.2005 2010 2009 2008 2007 2006

N’m N’m N’m N’m N’m N’m

Balance as per 7,929 5,662 13,522 21,357 7,879 27,247 audited financial statements

Adjustments :

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 Dev - - - (700) (1,400) (2,100) Bond

------

FINANCIAL INFORMATION-HISTORICAL

NOTES TO THE ACCOUNTS

V. Consolidated revenue fund

Sept Dec. Dec. Dec. Dec. Dec. 2010 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Balance transferred to CDF as 69,268 96,597 110,670 49,301 44,338 58,549 per audited financial statements

Adjustments/Reclassification :

Opening balance reclassified (4,227) (19,162) (12,558) (26,357) (31,132) (23,235)

Reversal of contributory 1,693 6,345 - - - - pension accruals

CRF charges: Investments - - - (3,670) - (14)

CRF charges : Loans and - - - (190) (1,446) (144) advances

CRF charges : Trapped deposit - - - - - (267)

CRF charges : Contributory (10,000) - - - - - pension expenses

Subtotal 56,734 83,780 98,112 19,084 11,760 34,889

Balance transferred to CDF after (56,734) (83,780) (98,112) (19,084) (11,760) (34,889) adjustments

Closing balance ------

FINANCIAL INFORMATION-HISTORICAL

NOTES TO THE ACCOUNTS

VI. Capital development fund

Sept 2010 Dec. Dec. Dec. Dec. Dec. 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Balance as per audited 28,028 4,227 19,162 12,558 26,357 31,132 financial statements

Adjustments 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 contributory 8,038 6,345 - - - - pension accruals

Trapped deposits in banks (267) (267) (267) (267) (267) (267)

Contributory pension remitted (10,000) - - - - - during the year

20,335 4,841 13,431 6,827 24,486 30,707

VII. Other government funds

Sept Dec. Dec. Dec. Dec. Dec. 2010 2009 2008 2007 2006 2005

N’m N’m N’m N’m N’m N’m

Balance as per audited financial 7,637 15,944 9,599 9,599 9,599 9,599 statements

Adjustments (cumulative):

Contributory pension accruals (8,038) (6,345) - - - -

Contributory pension remitted 10,000 - - - - - during the year

9,599 9,599 9,599 9,599 9,599 9,599

FINANCIAL INFORMATION-FORECAST

REPORT ON THE REVENUE AND EXPENDITURE FORECAST

FINANCIAL INFORMATION-FORECAST

MEMORANDUM ON THE REVENUE AND EXPENDITURE FORECAST The balances for 31 December 2010 represent the adjusted budget for the 2010 fiscal year (except for revenue figures which are actual). In the absence of unforeseen circumstances and based on assumptions set out below, the State Government estimates that its forecast revenue and expenditure for years ending 31 December 2011 to 2017 will be as shown below:

Revenue and Expenditure Forecast Forecast

2010 2011 2012 2013 2014 2015 2016 2017

N’m N’m N’m N’m N’m N’m N’m N’m

Recurrent Revenue (A):

Statutory Allocation 155,175 163,837 172,983 182,639 192,835 203,599 214,965 226,965

Value Added Tax 7,344 8,347 9,486 10,781 12,253 13,925 15,826 17,986

Internally Generated Revenue

Taxes 23,909 25,497 27,190 28,995 30,920 32,973 35,163 37,497

Fines and Fees 994 1,061 1,131 1,206 1,286 1,371 1,463 1,560

Licenses 170 181 194 206 220 235 250 267

Earnings and Sales 224 239 255 272 290 310 330 352

Rent on Government Property 221 236 252 269 286 305 326 347

Miscellaneous 23 24 26 27 29 31 33 35

Interest and Dividends 483 515 549 586 624 666 710 757

Subtotal 26,025 27,753 29,596 31,561 33,657 35,891 38,275 40,816

Total Recurrent Revenue 188,544 199,937 212,065 224,981 238,744 253,416 269,065 285,767

Capital Revenue (B):

Internal Loans 20,000 50,000 ------

The balances for 31 December 2010 represent the adjusted budget for the 2010 fiscal year (except for revenue figures which are actual). In the absence of unforeseen circumstances and based on assumptions set out below, the State Government estimates that its forecast revenue and expenditure for years ending 31 December 2011 to 2017 will be as shown below:

Revenue and Expenditure Forecast Forecast

2010 2011 2012 2013 2014 2015 2016 2017

N’m N’m N’m N’m N’m N’m N’m N’m

Total Revenue (A+B) 208,544 249,937 212,065 224,981 238,744 253,416 269,065 285,767

Expenditure

Capital expenditure 62,563 102,253 63,619 67,494 71,623 76,025 80,720 85,730

Recurrent Expenditure:

Personnel Cost 53,092 60,690 85,542 85,542 85,542 94,096 94,096 94,096

Pensions and Gratuities 7,425 6,065 6,433 6,825 7,242 7,687 8,162 8,669

Consolidated Revenue Fund Charges 2,663 2,012 2,134 2,264 2,403 2,551 2,708 2,876

Overhead Cost 36,874 49,179 52,162 55,339 58,725 62,333 66,183 70,291

Public Debt Charges 13,781 13,415 13,415 - - - -

Bond repayment (coupon and Principal) - 6,593 13,187 13,187 13,187 13,187 13,187 13,187

Total recurrent expenditure 113,835 137,955 172,874 163,158 167,099 179,855 184,336 189,119

Total Expenditure 176,398 240,208 236,493 230,652 238,722 255,879 265,056 274,849

Net cash flow in year 32,146 9,729 (24,428) (5,671) 22 (2,463) 4,009 10,918

Opening Cash and Cash Equivalent 5,874 38,020 47,748 23,320 17,649 17,670 15,207 19,216

Closing Cash and Cash Equivalent 38,020 47,749 23,320 17,649 17,671 15,207 19,216 30,134

FINANCIAL INFORMATION-FORECAST

ASSESSMENT OF BOND – RELATED CASH FLOWS In the absence of unforeseen circumstances and based on assumptions set out in page 6 and the laws governing the issuance of the Bond, DTSG estimates its servicing of the coupons and redemption for the years ending 31 December 2011 to 2017 will be as shown below:

Sinking Fund Account

Analysis of Sinking Fund

2011 2012 2013 2014 2015 2016 2017 2018

6 Mths 12 Mths 12 Mths 12 Mths 12 Mths 12 Mths 12 Mths 6 Mths

N'm N'm N'm N'm N'm N'm N'm N'm

Opening Balance - 905 2,770 4,712 6,735 8,841 11,034 13,318

Transfer to Sinking Fund 6,593 13,187 13,187 13,187 13,187 13,187 13,187 6,593

Interest on Sinking Fund 55 167 245 327 411 500 591 331

Management 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 1,177

Closing balance 905 2,770 4,712 6,735 8,841 11,034 13,318 14,495

FINANCIAL INFORMATION-FORECAST

BASES & ASSUMPTIONS FOR REVENUE & EXPENDITURE FORECAST Bases

The forecasts for the years ending 31 December 2011 - 2017 have been prepared on a consistent basis with Accounting Policies for the Nigerian Public Sector.

Assumptions

The 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 policies during the forecast period that will adversely affect the State Government; 2. The Federation Account and Value Added Tax sharing formula would not alter significantly from those used in 2010; 3. Value Added Tax is expected to increase annually at about 14%2 over the forecast period in line with forecast average growth rate of private consumption, which represents the main driver of value added tax; 4. The statutory allocation is expected to increase annually at the historical CAGR of about 6% over the forecast period; 5. Internally generated revenue is expected to increase annually at the forecast average GDP growth rate 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 the same period. However, capital expenditure declines in absolute terms by 38% between 2011 and 2012 and subsequently represents only 30% of total revenue from 2012 to 2017. This is due to increased recurrent expenditure i.e. personnel cost due to the implementation of the minimum wage bill. Proposed additional capital expenditure will be financed by the issue of further series of the bond 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. This reflects 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 a significant change in its staff structure. The State has also anticipated a 10% increase in 2015 to reflect a possible federal driven increase in staff salaries.

2 Economist Intelligence Unit (EIU) estimates 3 Economist Intelligence Unit (EIU) estimates 78

FINANCIAL INFORMATION-FORECAST

BASES & ASSUMPTIONS FOR REVENUE & EXPENDITURE FORECAST

8. Pensions and gratuity represents 3% of total revenue (less internal loans) in line with the historical average 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 with the historical average ratio of consolidated revenue fund charges to total revenue (less internal loans). 10. Overhead cost represents about 25% of total revenue (less internal loans) in line with the historical average 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 to liquidate all existing internal loans. 12. ISPO monthly deduction of N1,098,907,642.20 is expected to be deducted from the State’s Federal Allocation 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 the tenure of the Bond; 15. The first coupon and principal payments would be made in January 2012 and semi annually thereafter; 16. The Bond proceeds would be used to finance social and economic projects which are expected to stimulate economic activities in the State. These projects have been identified and their respective business plans and bills of quantity have been prepared and will be submitted to the Securities and Exchange Commission as part of the approval process; 17. The economic and political climate of Nigeria will remain relatively stable; and 18. In the event of a shortfall in the bullet principal repayment of the bond, the State Government will make good the shortfall from its recurrent revenue.

BOND RATING (EXTRACTED FROM THE RATING REPORT)

STATUTORY AND GENERAL INFORMATION

INDEBTEDNESS As at May 31, 2010, Delta State had outstanding local and foreign commercial loans totalling about N28.6 billion. Other than as stated above, the State had no outstanding debentures, mortgages, loans, charges or similar indebtedness or material contingent liabilities or other similar indebtedness, other than in the ordinary course of governance.

CLAIMS AND LITIGATION Below is an extract from the Report of the Solicitors to the Programme dated August 11, 2011, on the claims 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 and twenty 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 suits instituted against the State are exaggerated and would most likely be unsubstantiated. The State’s actual liability in the foregoing cases will be as eventually established, found and determined by the court upon conclusion of the cases.

The Honourable Attorney General & Commissioner for Justice of Delta State on behalf of the Delta State Government has written to confirm that “the State is not involved in any litigation in any Court of Law, with any person or body corporate which is likely to have material adverse effect on the State in relation to the bond issue or its process as at 31st July, 2011”.

MATERIAL CONTRACTS

The 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 have agreed 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 the Underwriters. (iv) Any other Material Contract in respect of any other issuance will be disclosed in the Pricing Supplement.

Other than as stated above, the State has not entered into any material contracts except in the ordinary course of governance, any other material contract in respect of any issuance under the programme will be disclosed in the Pricing Supplement relating to the Securities to be issued.

BOND RATING

The 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. Ltd

STATUTORY AND GENERAL INFORMATION

RELATIONSHIP BETWEEN THE ISSUER AND ITS ADVISERS As at the date of this Shelf Prospectus, there is no relationship between the Issuer and any of its advisers except in the ordinary course of business.

CONSENTS The following have given and not withdrawn their written consents to the Issue of this Shelf Prospectus with their names and reports (where applicable) included in the form in which they appear:

Representatives of the Executive Council of Delta State S/N Name Responsibility 1. His Excellency, Dr Emmanuel Eweta Uduaghan Executive Governor 2. His Excellency, Prof. Amos Agbe Utuamah Deputy Governor 3. Mr. Charles Amajuoritse Ajuyah (SAN) Commissioner for Justice and Attorney General 4. Mr. Bernard Okumagba Commissioner for Finance 5. Hon. Funkekeme Solomon Commissioner for Works 6. Dr. Joseph S. Otumara Commissioner for Health 7. Mrs. Betty Oghometite Efekhoda Commissioner for Women Affairs 8. Dr. Chris Oghenechovwen Commissioner for Water Resources 9. Mr. Patrick Ferife Commissioner for Lands, Survey 10. Mr. Frank Omare Commissioner for Environment 11. Barr. Misan Kubeyinje Commissioner for Agricultural and Natural Resources 12. Prof. Patrick Muoboghare Commissioner for Basic/Secondary Education 13. Barr. Christopher Chike Ogeah Commissioner for Information 14. Dr. Tony Nwaka Bureau for Special Duties 15. Mr. Ebifa Olisaelika Ijoma Commissioner for Special Duties (Youth Affairs) 16. Chief Paulinus Akpeki Commissioner for Housing 17. Prof. Hope Eghagha Commissioner for Higher Education 18. Hon. Ben Igbakpa Commissioner for Transport 19. Barr. (Mrs) Orezi Esievo Commissioner for Special Infrastructure 20. Dr. Anthonia Ashiedu Commissioner for poverty Alleviation 21. Comrade Gloria Okulogbo Commissioner for Multilateral Relations/Abuja 22. Mr. Kinglsey Eze Emu Commissioner for Commerce and Industry 23. Barr. Neworld Safugha Commissioner for Local Govt. Chieftaincy Affairs 24. Barr. Richard Mofe-Damijo Commissioner for Arts & Culture 25. Mr. Ifeanyi Micheal Osuoza Honourable Commissioner, Directorate of Project Monitoring 26. Mr. Pirah Joseph Omamofe Honourable Commissioner for Special Duties (Oil & Gas) 27. Mr. Emetulu Charles Chukwuemeke Honourable Commissioner for Energy

STATUTORY AND GENERAL INFORMATION

28. Mr. Onogba Oghenekewe Christian Honourable Commissioner for Special Duties (NDDC/Braced Commission Liason) 29. Mrs. Queen Nkem Ikenchukwu Honourable Commissioner for Millennium Development Goals 30. Mr. Kenneth Oghenerhoro Okpara Honourable Commissioner for 31. Hon. Princess Pat. AjuduaHonourable Commissioner for Special Duties (Public Works) 32. Mr. Ayibatonye Alari TimiHonourable Commissioner for Specal Duties (DESOPADEC) 33. Comrade Ovuozourie Macaulay Secretary to the State Government

Other Transaction Parties

Issuing Houses Access Bank Plc, BGL Plc, FCMB Capital Markets Limited, Greenwich Trust Limited, ICMG Securities Limited, UBA Capital Limited, Vetiva Capital Management Limited and Zenith Capital Limited. Underwriters to Series 1 Issue Access Bank Plc, Fidelity Bank Plc, FCMB Plc, ICMG Securities Limited, Mainstreet Bank Limited, United Bank for Africa, Vetiva Capital Management Limited and Zenith Bank Plc. Auditors Delta State Auditor General Reporting Accountants KPMG Professional Services Solicitor to the Issuer: Delta State Attorney General & Commissioner for Justice Solicitors to the Issue: Detail Commercial Solicitors ; Ajumogobia & Okeke Solicitors to the Trustee: Templars Barristers & Solicitors; Osanmor Otiono & Co Trustees to the Issue Afribank Trustees & Asset Mgt Co. Ltd, ALM Consulting Limited, First Trustees Nig. Limited, Skye Trustees, UBA Trustees Limited and Union Trustees Limited Stockbrokers to Issue BGL Securities Limited, City Code Trust & Investment Company Limited, Cowry Asset Management Limited, CSL Stockbrokers Limited, Forthright Securities Limited, ICMG Securities Limited, Nova Finance & Securities Limited, Resort Securities & Trust Limited, Skye Stockbrokers Limited, PAC Stockbrokers Limited, UIDC Securities Limited and Vetiva Securities Limited Rating Agencies Agusto & Co Limited, GCR Registrars to the Issue First Registrars Limited Receiving Bank Access Bank Plc

STATUTORY AND GENERAL INFORMATION

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents may be inspected at the offices of the Issuing Houses contained in the Pricing Supplement of the series being issued, during normal business hours on any week day (except public holidays), 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 the Programme; (c) The State Government’s gazette dated April 14, 2011 confirming the instrument authorising the Programme; (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 State to the Accountant-General of the Federation, authorizing periodic deduction of the principal and interest 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 to deduct 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 the Shelf Prospectus and the Programme; (h) The Programme Trust Deed dated September 29, 2011 between the Delta State Government on the one 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 30th September 2010; (k) The Report by KPMG Professional Services on the audited Financial Statements of Delta State for the five years ended 31st December 2005, 2006, 2007, 2008, 2009 and the 9 month period ended 30th September 2010; (l) The Report by KPMG Professional Services on the Revenue and Expenditure Projections of Delta State 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 of the 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;

FORM OF PRICING SUPPLEMENT

Set out below is the form of Pricing Supplement which will be completed by the Issuer for each Series of Bonds issued under the Programme:

Pricing Supplement (Supplementary Shelf Prospectus) To the Base Shelf Prospectus dated [ ]

DELTA STATE GOVERNEMNT

Issue of (.) Naira –denominated Fixed Rate Bonds Under the N100, 000,000,000 Debt Issuance Programme.

Issue Price: N1000 at Par Payable in full on Application

Application 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 Prospectus dated 29 09 2011 and another supplements to the Shelf Prospectus to be issued by the Issuer. Terms defined in 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 and the 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 issued hereunder (the “Series 1 Bonds” or “Bonds”). Application has been made to the Council of the Exchange for 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 Pricing Supplement. The Issuer declares that having taken reasonable care to ensure that such is the case, the information contained in this Pricing Supplement is, to the best of its knowledge, in accordance with the facts and does not omit anything likely to affect the import of such information and that save as disclosed herein, no other significant new factor, material mistake or inaccuracy relating to the information included in the Shelf Prospectus has arisen or has been noted, as the case may be, since the publication of the Shelf Prospectus. Further, the material facts contained herein are true and accurate in all material facts, the omission of which would make any statement contained herein misleading or untrue.

FORM OF PRICING SUPPLEMENT

FINAL TERMS OF SERIES [ ] BONDS 1. 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 Rate

10. Redemption/Payment Basis [ ] 11. Status [ ] 12. Security [ ] 13. Listing(s): [ ] 14. Method of Distribution: [ ] 15. Offer Period [ ]

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

16. Fixed Rate Bond Provisions [Applicable/Not applicable] (if not applicable Delete the remaining sub-paragraphs of this paragraph)

(i) Interest Rate(s) [ ]

(ii) Interest Payment Date(s)/Payment Dates: [ ]

(iii) Interest Amount(s): [ ]

(iv) Day Count Fraction: [ ]

(v) Business Day Convention [Following Business Day Convention/Preceding Business Day convention/Modified Business Day]

(vi) Business Day: [ ]

(vii) Other terms relating to method of calculating [Not Applicable/Give Details] Interest for Fixed Rate Bonds:

FORM OF PRICING SUPPLEMENT

17. Floating Rate Bond Provisions [Applicable/Not applicable] (if not applicable Delete the remaining sub-paragraphs of this paragraph

(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 Bills Rate] - Interest Determination Date(s) [ ] - Relevant Screen Page [ ]

(vii) Day Count Fraction [ ]

18. Zero Coupon Bond Provisions [Applicable/Not applicable] (if not applicable Delete the remaining sub-paragraphs of this paragraph

(i) Amortisation Yield: [ ] per cent per annum (ii) Reference Price [ ] (iii) Day Count Fraction: [ ] (iv) Any other formula/basis of determining [ ] Amount payable

PROVISIONS RELATING TO REDEMPTION

19. 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 THE BONDS

25. Form of Bonds: Dematerialised Bonds

(i) Form of Dematerialised Bonds: [Registered/Certificate/Dematerialised] (ii) Registrar: [ ]

FORM OF PRICING SUPPLEMENT

26. Trustee(s) [ ] 27. Record Date: [ ] 28. Other terms or special conditions [ ]

DISTRIBUTION, CLEARING AND SETTLEMENT PROVISIONS

29. Underwritten/Book-building [ ] 30. If Underwritten, names of underwriters [ ] 31. Clearing System: Central Securities Clearing System Limited

GENERAL

32. Rating [ ] 33. Taxation [ ] 34. Governing Law Nigeria

APPENDICES

35. Appendices [List and Attach Appendices if applicable]

USE OF PROCEEDS

[Insert details of use of proceeds]

MATERIAL ADVERSE CHANGE STATEMENT

Except 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 date of last audited accounts or interim accounts (if later) and no material adverse change in the financial position or prospectus of the Issuer since [insert date of last published annual accounts]

RESPONSIBILTY

The Issuer accepts responsibility for the information contained in this Pricing Supplement which, when read together with the Shelf Prospectus referred to above, contains all information that is material in the context of the issue of the Bonds.

Signed on behalf of the Issuer:

………………………….. ……………………………….