gombe tate overnment of igeria ib ond ssuance of … · 2017-07-10 · rule 40 (c) of the sec rules...

THIS DOCUMENT IS IMPORTANT AND SHOULD BE READ CAREFULLY. IF YOU ARE IN ANY DOUBT ABOUT ITS CONTENTS OR THE ACTION TO BE

TAKEN, PLEASE CONSULT YOUR BANKER, STOCKBROKER, ACCOUNTANT, SOLICITOR OR ANY OTHER PROFESSIONAL ADVISER FOR GUIDANCE

IMMEDIATELY. FOR INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE

“RISK FACTORS” COMMENCING ON PAGE 45 HEREOF.

THIS DEBT ISSUANCE PROGRAMME PROSPECTUS CONSTITUTES A SHELF PROSPECTUS WITHIN THE MEANING OF

RULE 40 (C) OF THE SEC RULES AND REGULATIONS

GOMBE STATE GOVERNMENT OF NIGERIA

BOND ISSUANCE PROGRAMME OF

N30,000,000,000 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 Gombe State Executive Council (“EXCO”) on behalf of the Gombe 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 Gombe State Executive Council (“EXCO”) on behalf of the Gombe State Government listed on page 8 &9 nor any of the Parties to the Programme listed on page 9 to 11 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 offence under 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 that the 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 ACCESS BANK PLC

RC 125384

JOINT-ISSUING HOUSES GREENWICH TRUST LIMITED GTB ASSET MANAGEMENT

RC 189502 RC 152321 BGL Plc FINMAL FINANCIAL SERVICES LIMITED UBA CAPITAL LIMITED

RC 223042 RC 105859 RC 444999

This Prospectus is dated September 28, 2012

CONTENTS

DEFINITION OF TERMS 1

INFORMATION RELATED TO THIS SHELF PROSPECTUS 4

ISSUE OF PRICING SUPPLEMENTS (SUPPLEMETARY PROSPECTUS) 5

PARTIES TO THE PROGRAMME 6

THE PROGRAMME 10

DECLARATION BY THE ISSUER 11

SUMMARY OF THE PROGRAMME 12

TERMS & CONDITIONS OF THE PROGRAMME 16

INFORMATION ON NIGERIA 21

INFORMATION ON GOMBE STATE 32

RISK AND MITIGATING FACTORS FOR THE PROGRAMME 45

FINANCIAL INFORMATION HISTORICAL 48

Report of the Auditor General of Gombe State 48

Letter from the Reporting Accountants 49

Statement of Accounting Policies 50

Statement of Assets & Liabilities 51

Statement of Revenue and Expenditure 52

Cash Flow Statements 53

Notes to the Financial Statements 54

BOND RATING (EXTRACTED FROM THE RATING REPORT) 57

EXTRACT FROM THE PROGRAMME TRUST DEED 58

STATUTORY AND GENERAL INFORMATION 66

Indebtedness 66

Purpose of the Programme 66

Authorization and Legal Framework 66

Claims and Litigation 66

Material Contracts 66

Bond Rating 66

Relationship between the Issuer and its Advisers 66

Consents 67

Documents Available for Inspection 68

FORM OF PRICING SUPPLEMENT 69

DEFINITIONS

1

Unless the context otherwise requires, the following expressions shall have the meaning respectively assigned to them: “Auditor” The Auditor General of Gombe State “Authorised Representatives” The members of the Gombe 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 “GOSG” Means the Gombe State Government of Nigeria and the Issuer of the Bonds “Enabling Law” The Gombe State Debt Instrument Law “EXCO” The Executive Council of the Gombe 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 counter claim or other

restrictions and free 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

“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 Gombe State to the

Accountant General of the Federation for the periodic deduction of monies as a first line charge

DEFINITIONS

2

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 Bank”), BGL Plc (“BGL”), Finmal Finance Services Limited

(“Finmal”), Greenwich Trust Limited (“Greenwich”), GTB Asset Management Limited (“GTB Asset”), UBA Capital Limited (“UBA 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” The issuance and offering period hereunder of GOSG Bonds in the aggregate principal amount of

each series on the terms and conditions set out in this Shelf 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 Gombe State Bond Issuance Programme of N30,000,000,000.00 (Thirty Billion Naira) “Programme Trust Deed” Means the Master Trust Deed between the Issuer and the Trustees dated on September 28, 2012 “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 United Securities Limited “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

DEFINITIONS

3

“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 Gombe 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, specific matters in respect of the Bonds being issued under a particular series or tranche;

“The Bonds” Means the principal monies represented by the N30,000,000,000 Bonds raised through two or more

series issued by the State within the validity period of this Shelf Prospectus “Trustees” Means ARM Trustees Limited, UBA Trustees Limited and ALM Consulting Limited or trustees for

the time being appointed under the Trust Deeds or in replacement of any existing trustee “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

4

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 result, performance or achievements expressed or implied by such forward-looking statements. Any statement 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.gombestate.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)

5

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

6

ISSUER Gombe State Government of Nigeria Government House Gombe Gombe State

REPRESENTATIVES OF THE GOMBE STATE EXECUTIVE COUNCIL: His Excellency, Alhaji Ibrahim Hassan Dankwambo

Executive Governor and Chairman of the Council His Excellency, Tha’ Anda Jason Rubainu Deputy Governor and Commissioner for Land and Survey Alhaji Abubakar Sulei Bage Secretary to the State Government Alhaji Hassan Muhammadu Honourable Commissioner for Finance Mr. Abdul-Hameed Ibrahim Honourable Commissioner for Justice and Attorney General Mr. Ahmed Abubakar Walama Honourable Commissioner for Local Govt. and Community Development Mr. Mijinyawa Sani Labaran Honourable Commissioner for Youth and Empowerment Dr. Ishaya Kennedy Honourable Commissioner for Health Alhaji Jalo Abubakar Honourable Commissioner for Special Duties Dr. Hamza Sule Wuro Bokki (FCPIN) Honourable Commissioner for Trade and Industry Dr. Hassan A. Haruna Honourable Commissioner for Cooperative and Rural Development Mrs. Aishatu M.B Ahmad Honourable Commisioner for Education Mr. Dahiru Buba Biri Honourable Commissioner for Agriculture Mr. Mohammed Danladi Honourable Commissioner for Economic Planning Mr. Bulus Samuel Adamu Honourable Commissioner Culture & Tourism Hon. Dr. Isa A. Muhammed Wade Honourable Commissioner for Higher Education Mrs. Fatima Abubakar Honourable Commissioner for Women Affairs


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Mr. Habu Dawaki (REV) Honourable Commissioner for Information Mr. Ahmad Shehu Hadi Honourable Commissioner for Works Mr. Babagoro Abdulkadir Yahaya Honourable Commissioner for Science and Solid Minerals Development Mr. Rabenson Zebulun Wasa Honourable Commissioner for Housing and Transport Mr. Idris Muhammad Mahdi Commissioner for Water Resources Town Planning

SOLICITOR TO GOSG Attorney General & Commissioner for Justice of Gombe State Tudun wada, Gombe. Gombe State

AUDITOR TO GOSG Mr. Jeremiah T. Dillos

Auditor General of Gombe State Office of the Auditor General Gombe

ACCOUNTANT TO GOSG Mr. Mohammed Tukur Seyoji

Accountant General of Gombe State Office of the Accountant General Gombe

LEAD ISSUING HOUSE Access Bank Plc

Plot 999c, Danmole Street Off Adeola Odeku/Idejo Street Victoria Island Lagos

JOINT-ISSUING HOUSES BGL Plc

12a, Catholic Mission Street Lagos Island, Lagos. Finmal Finance Services Limited Plot 785, Herbert Macaulay way Central Business District, Abuja Greenwich Trust Limited Plot 1698A, Oyin Jolayemi Street Victoria Island, Lagos GTB Asset Management Limited 37, Karimu Kotun Street Victoria Island, Lagos.


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UBA Capital Limited UBA House, 57 Marina Lagos.

LEAD STOCKBROKER Marina Securities Limited 10, Amodu Ojikutu Street Victoria Island Lagos

JOINT STOCKBROKERS Camry Securities

Wesley House Annex 21/22 marina, Lagos Finmal Finance Services Limited Plot 785, Herbert Macaulay way Central Business District, Abuja Gombe Securities Limited B.C.G.A Investment Shopping Mall Gombe Gombe State Security Swaps Limited Okoi Arikpo house (1st floor) 5, Idowu Taylor Street Victoria Island, Lagos

TRUSTEES ARM Trustees Limited

9, Bayo kuku road Ikoyi Lagos

UBA Trustees limited 15th Floor, UBA House 57 Marina Lagos ALM Consulting Limited Cluster B, Block B12, Flat 102 1004, Estates, Victoria Island Lagos

SOLICITORS TO THE TRUSTEE Aluko and Oyebode

35, Moloney Street Lagos Island, Lagos


9

SOLICITORS TO THE ISSUE Tokunbo Orimobi & Co

52/54 Murtala Muhammed way UBA/WEMA Bank Building 1st Floor, Ebute Metta Lagos

Akanbi & Wigwe 8th Floor, St Peters House 3 Ajele Street Lagos

REPORTING ACCOUNTANTS PriceWaterHouseCoopers (Nig)

252E Muri Okunola Street Victoria Island 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 United Securities Limited 10, Amodu Ojikutu Street Victoria Island Lagos

RECEIVING BANK Access Bank Plc

Plot 999c, Danmole Street Off Adeola Odeku/Idejo Street Victoria Island Lagos

THE PROGRAMME

10

A copy of this Shelf Prospectus together with the documents specified herein, having been approved by the Issuer and the Trustees, 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 N30,000,000,000 Gombe 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 Gombe State Executive Council (“EXCO”) on behalf of the Gombe 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.

LEAD ISSUING HOUSE ACCESS BANK PLC

RC 125384

JOINT-ISSUING HOUSES GREENWICH TRUST LIMITED GTB ASSET MANAGEMENT

RC 189502 RC 152321 BGL Plc FINMAL FINANCIAL SERVICES LIMITED UBA CAPITAL LIMITED

RC 223042 RC 105859 RC 444999

ON BEHALF OF GOMBE STATE GOVERNMENT OF NIGERIA

are authorised to receive applications for

N30,000,000,000 Bond Issuance Program

Development Bonds

This Shelf Prospectus contains: 1. On Page 11, 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 49, the Reporting Accountants’ Report prepared by Messrs. PWC for incorporation in this Shelf Prospectus; 3. On page 57, extracts of the Rating Reports prepared by the Rating Agencies, Agusto & Co and Global Credit Rating 4. On page 66, the details of the claims and litigation, the State is involved in as at May 16, 2012; Validity Period of the Shelf Prospectus and Delivery of Documents: This Shelf Prospectus is valid until September 26, 2014. 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 Gombe State Ministry of Information and the offices of the Issuing Houses listed on page 8 and 9 respectively.

DECLARATION BY THE ISSUER

11

SUMMARY OF THE PROGRAMME

12

1. Issuer: Gombe State Government of Nigeria (“Gombe State”, “GOSG” or “the State”)

2. Programme Description: The Bond Issuance Programme (“The Programme”) being undertaken by Gombe State through which a series of Bonds will be issued

3. Programme Size: N30,000,000,000

4. Lead Issuing House: Access Bank Plc

5. Par Value: N1,000 6. Joint- Issuing Houses: Access Bank Plc (“Access Bank”), BGL Plc (“BGL”), Finmal Finance

Services Limited (“Finmal”), Greenwich Trust Limited (“Greenwich”), GTB Asset Management Limited (“GTB Asset”), UBA Capital Limited (“UBA Capital”), (The Lead Issuing House and Co-Issuing Houses shall together be referred to as “the Issuing Houses” or “the Joint Issuing Houses”).

7. Programme Trustees: ARM Trustees Limited, UBA Trustees Limited and ALM Consulting

Limited

8. Instrument(s) to be Issued: Instrument to be issued under the Programme shall be registrable Bonds

9. 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.

10. 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 on every payment date shall be clearly specified in the relevant Pricing Supplement.

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


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12. 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.

13. 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.

14. Issue Currency: The Bonds shall be denominated in Naira (N)

15. Tenor: The tenor for each Bond Issue shall be contained in the applicable Pricing Supplement.

16. 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.

17. 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.

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

19. Day Count Convention: Actual/365(the actual number of days in a month and 365 days in a year). Different day count conventions may be stipulated in the applicable Pricing Supplement

20. 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 in to the next calendar month, such coupon payment date shall be brought forward to the immediate preceding business day.

21. 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.

22. 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 Gombe 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


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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.

23. 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.

24. 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

25. 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.

26. 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.

27. 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.

28. Rating: Issuer Rating BBB by Global Credit Rating Co. Limited (“GCR”)

Bb by Agusto & Co. Limited (“Agusto”)

Bond Rating A- by Global Credit Rating Co. Limited (“GCR”) A by Agusto & Co. Limited (“Agusto”)

29. Governing Law: Nigerian Law: -The Constitution of the Federal Republic of Nigeria, 1999 - The Fiscal Responsibility Act, 2007 - Investment and Securities Act, 2007 - The Gombe State Debt Instrument Law.

30. Transaction Documents: - Shelf Prospectus - Programme Trust Deed - Supplemental Trust Deed - Pricing Supplement - Vending Agreement - Joint Issuing House Agreement - Irrevocable Standing Payment Order issued by the Gombe State Government


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- Letter of approval from the Federal Ministry of Finance authorizing the Accountant General of the Federation to deduct at source from Gombe State’s statutory allocation

- Financial Statement and Accounts for Gombe State from January 1, 2007 to period ended December 31, 2011

- Resolution of the Executive Council of Gombe State - Resolution of the House of Assembly - The Bond Law

TERMS AND CONDITIONS OF THE PROGRAMME

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The following are the Terms and Conditions of the Bonds issued under the Bond Issuance Programme which (subject to completion and amendment), will be applicable to each Series of the Bonds provided that the relevant Supplementary Shelf prospectus and/or Pricing Supplement in relation to any issue of Bonds may specify other Terms and Conditions which shall, to the extent so specified or to the extent inconsistent with these Terms and Conditions, replace the following Terms and Conditions for the purposes of such issue of Bonds. 1. The Bonds

The Issuer of the Bonds is the Gombe State Government of Nigeria (the “State” or “Issuer”) and the Bonds are being issued pursuant to the provisions of the Gombe State Bonds Law as amended from time to time (the “Law”) and are further authorised by the resolution of the Executive Council of the Gombe State Government passed on the 25th day of January 2012 (the “Resolution”). The Bonds are constituted by a Programme Trust Deed dated September 28, 2012 (the “Trust Deed”) between the State and the Trustees, which expression shall include all persons who for the time being appointed as trustee or trustees pursuant to the Trust Deed for the purpose of acting on behalf of the Bondholders. The statements set out in these Terms and Conditions (the “Conditions”) and in the relevant extracts from the Trust Deed on pages 59 to 65 of the Shelf Prospectus, include summaries of, and are subject to the detailed provisions of the 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 Trust Deed, the applicable Supplemental Trust Deed and the applicable Pricing Supplement. Copies of the Trust Deeds are available for inspection during normal business hours at the specified offices of the Trustees throughout the tenor of the Bonds.

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.

2. Form, Denomination and Title

The Bonds may be issued in registered or certificated form. Where a Bond is issued in registered or certificated form, the Bond Certificate (“Certificate”) will be issued to the registered Bondholders in respect of their registered holding of Bonds. The Bonds shall be fixed rate bonds and on the terms in the applicable Pricing Supplement. Each Certificate will be numbered serially with an identifying number which will be recorded on the relevant Certificate and in the Register of Bondholders (“Register”) which the Issuer will procure the Registrar to maintain. The Bonds may also be issued in dematerialised or uncertificated form, the Bonds held in dematerialised or uncertificated form shall be credited into the account of the relevant Bondholder with the Central Securities Clearing System Limited (“CSCS”). The Bonds shall be issued in Naira in denominations of N1, 000.00 each and integral multiples thereof. The Register shall be conclusive evidence of the persons entitled to the Bonds and any payment made to or to the order of such person shall be valid and to the extent of the sum or sums so paid, effective to satisfy and discharge the liability for such monies payable upon any such Bonds provided that in the case of Bonds held in dematerialised or uncertificated form, the Registrar shall be entitled to rely on the records or


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certification of the CSCS as to the person or persons deemed to be the holders of any dematerialised Bonds save in the case of manifest error.

3. Status

The Bonds issued under the Programme are “Senior Bonds” and constitute direct obligations of the Issuer. The Bonds qualify as securities in which Trustees may invest under the Trustees Act and qualify as “Government Securities” within the meaning of Companies Income Tax Act, the Personal Income Tax Act and the Capital Gains Tax Act, for purposes of tax exemption.

4. Transfer and Registration of the Bonds

Any transfer of Bonds in registered or certificated form shall be effective only to the extent that such transfer is registered in the Register upon submission of the applicable Certificate together with a written instrument of transfer in a form satisfactory to the Registrar duly executed by or on behalf of the registered Bondholder and the transferee or by a duly authorised attorney. Upon submission of the aforesaid documents to facilitate the registration of transfer of Bonds, the Registrar shall register such transfer and deliver a new Certificate to the transferee in respect of the Bonds transferred PROVIDED that in the event that all of the Bonds represented by the Certificate are not transferred, the transferor Bondholder shall be entitled to a new Certificate in respect of the Bonds still held by the original Bondholders.

The transfer of Bonds in dematerialised or uncertificated form shall be regulated by the procedures and guidelines of the CSCS.

The Register shall contain the names and addresses of the Bondholders, the respective number of Bonds held, the nominal value of the Bonds, the date of allotment or purchase, the CSCS Account number of the Bondholders (if applicable), the details of a valid bank account to which payments due under the Bonds can be credited together with any other information that may be deemed necessary by the Issuer, or the Trustees or the Registrar. The Registrar shall immediately be notified in writing of any change of name, address, CSCS Account number or bank account details on the part of any Bondholder and upon the Registrar’s satisfaction thereof and in compliance with all such formalities as it may require shall cause the Register to be altered or the change to be registered accordingly.

5. Redemption The relevant Supplemental Trust Deed may indicate either that the relevant Bonds cannot be redeemed prior to their stated maturity or that such Bonds will be so redeemed at the option of the Issuer or the Bondholders. The terms of any such redemption including any notice periods, any relevant conditions to be satisfied and the relevant redemption dates will be as specified in the Supplemental Trust Deed.

6. Creation of Security Interest

The security interest created by the Trust Deed shall be a first charge and shall rank prior to any other secured obligations of the Issuer and shall not be subordinated to any present and future indebtedness of the Issuer.


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7. Establishment of Sinking Funds (a) A Sinking Fund shall be established for the accumulation of monies and reserves for the fulfillment of the

obligations of the Issuer in respect of each Series of the Bonds. (b) The Sinking Funds shall be administered by the Trustees in respect of the Bonds. The amounts standing to

the credit of the Sinking Funds from time to time shall be applied to meet the obligations of the Issuer in respect of:

(i) Trustees’ fees and expenses; (ii) Coupon payments; (iii) Repayment or redemption of the Principal Amount on the Coupon Payment Dates and Maturity

Date; and (iv) Payment of the premium (if any) owing upon the Bonds pari passu in proportion to the amount

due to the Bondholders respectively and without preference or priority. (c) The amount in each of the Sinking Funds shall be pledged to the Trustees for the benefit of the

Bondholders for the applicable Series of Bonds. (d) The Issuer irrevocably instructs and authorises the Trustees to withdraw any sums standing to the credit of

any of the Sinking Funds for the purpose of making payment of the Principal Amount, Coupon, premium (if any) and other payments due with respect to the applicable Series of Bonds.

(e) Where there is any shortfall in the amount paid into the Sinking Fund, the Trustees shall notify the Issuer

and the Issuer shall be obliged within 21 (twenty one) days of receiving such notice to cause the amount of such shortfall to be paid into the Sinking Fund.

8. Coupon Payments

The Coupon Amount shall be payable to the Bondholders semi-annually on the Coupon Payment Date. The Bonds will cease to accrue Coupon from (and including) the Maturity Date (or other due date for redemption) unless payment of the Principal Amount (or other amount due) in respect of the Bonds is improperly withheld or refused or unless default is otherwise made in respect of payment in which event Coupon will continue to accrue. When the Coupon is required to be calculated in respect of a period of less than a full 6 (six) months, it shall be calculated on the basis of a 365 day year and in a leap year, it shall be calculated on the basis of a 366 day year.

9. Payments

The Principal Amount, Coupon Amount and any other amount due in respect of the Bonds shall be payable in the official currency of the Federal Republic of Nigeria, which on the date of payment thereof is legal tender for the payment of public and private debts.

Payment of the Principal Amount, Coupon Amount and any other amount due in respect of the Bonds will be made by direct credit to the designated bank account of the Bondholder or by a certified cheque by a


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registered mail to the registered address of the Bondholder if a bank account is not specified for this purpose. Where the day on or by which a payment is due to be made or an event due to occur is not a Business Day, that payment shall be made and that event shall occur on or by the next succeeding Business Day, unless that next succeeding Business Day falls in a different calendar month, in which case that payment shall be made or that event shall occur on or by the immediately preceding Business Day. Business Day means any day (other than Saturday or Sunday or a public holiday) on which banking institutions are open for business in Lagos, Nigeria.

10. Priority of Payments

All monies received by the Trustees shall be held by the Trustees (subject to the payment of any monies having priority to the Bond) on trust for the Bondholders and shall be applied for the following purposes and in the following order of priorities:

(a) Firstly, in payment of any amounts due and unpaid to the Trustees;

(b) Secondly, in payment of the Coupon Amount pari passu in proportion to the amount due to the Bondholders respectively and without preference or priority; in payment of the Principal Amount pari passu in proportion to the amount of Bonds held by each Bondholder and without preference or priority;

(c) Thirdly, in payment of the Principal Amount pari passu in proportion to the amount of Bonds held by each Bondholder and without preference or priority;in payment of the premium (if any) owing upon the Bonds pari passu in proportion to the amount due to the Bondholders respectively and without preference or priority;

(d) Fourthly, in payment of the premium (if any) owing upon the Bonds pari passu in proportion to the amount due to the Bondholders respectively and without preference or priority; and

(e) The surplus (if any) shall be paid to the Issuer. 11. Taxation

The tax waivers approved by the Federal Government of Nigeria on all categories of bonds issued in Nigeria in March 2010 exempts all classes of investors from paying tax on coupon received or capital gains made on investment in bonds for a period of 10 years. As a result of the tax waiver approved by the Federal Government of Nigeria, the Companies Income Tax Exemption Order, 2011, the Personal Income Tax Act (as amended by the Personal Income Tax (Amendment) Act 2011) and the Capital Gains Tax Act, the Bonds are exempt from tax in the Federal Republic of Nigeria.

12. Meetings of Bondholders

The Trust Deed makes provision for convening meetings of Bondholders to consider any matter which affects their interests. The Trustees or the Issuer respectively may and the Trustees shall upon the request in writing of the holders of not less than one-tenth of the Bonds for the time being outstanding convene a meeting of Bondholders. Such meeting shall be held at such place as the Trustees shall determine or approve.


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At any such meeting, two persons holding or representing by proxy 51% (Fifty-one per cent) in value of the Bond for the time being outstanding shall form a quorum for the transaction of business and no business shall be transacted at any meeting unless the requisite quorum is present when the meeting proceeds to business.

A resolution in writing signed by or on behalf of Bondholders holding in the aggregate not less than 90% (Ninety per cent) in nominal value of the Bond then outstanding and who for the time being are entitled to receive notice of a meeting in accordance with the provisions herein contained shall for all purposes be as valid and effectual as a Special Resolution passed at a meeting of Bondholders duly convened and held in accordance with the provisions herein contained. 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.

INFORMATION ON NIGERIA

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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 and Access Bank Research. 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 Gombe 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 be 140,003,542 (One Hundred and Forty Million, Three Thousand, and 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 6 additional States on October 1, 1996. Nigeria was under military rule from 1966 to October 1979, 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. 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 1 member 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


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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, 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 16 West 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.

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


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(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.

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. Provisional data from the National Bureau of Statistics (NBS) indicated that real gross domestic product (GDP) was projected to grow by 7.43 % in the first quarter of 2011, compared with the 7.36 % recorded in the corresponding period of 2010. The non-oil sector grew by 8.46 % while the oil sector output growth was estimated at 2.90 %. 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 Nigerian capital market has witnessed a considerable level of growth as induced by the government, as is the case in other developing countries. Though, prior to the establishment of stock market in Nigeria, there existed some less formal market arrangements for the operation of capital market. The Nigerian Capital Market started rolling from 1960 when Nigerian Stock Exchange (Lagos stock) exchange was opened. At present the market is gaining depths and becoming steady. The Regulatory Framework of the Nigerian capital market consists but not limited to the following general and specific laws;

i. Companies and Allied Matters Act (CAMA) ii. Investment and Securities Act (ISA) 2007 iii. Securities and Exchange Commission Rules and Regulations

The Nigerian Stock Exchange (NSE) is the centre point of the capital market while the Securities and Exchange Commission (SEC) serves as the apex regulatory body. Major Participant in the Nigerian Capital Market

i. The Securities and Exchange Commission (SEC) is responsible for the overall regulation of the entire market.

ii. The Nigerian Stock Exchange (NSE) is self-regulatory organization that supervises the operations of the formal quoted market.

iii. Market Operators consisting of the Issuing Houses (Merchant Banks and Stock Broking Firms), Stockbrokers, Trustees, Registrars, e.t.c.

iv. Investors, Individuals, Insurance Companies, Pension Fund and Unit Trusts (Institutional Investors).


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Instruments employed at the Capital Market Debt - Government Bonds (Federal, States, & Local Governments)

Equities – Ordinary Shares and Preference shares

Industrial Loans/Debenture Stocks and Bonds

The structure of the Capital Market There are two markets within the Nigerian Capital Market, which can be broadly classified into primary market and secondary market

i. Primary Market: This is a market where new securities are issued. The mode of offer for the securities traded in this market includes offer for subscription, right issues, offer for sales, private placement.

ii. Secondary Market: This is the market for trading in existing securities. This consists of exchange and over the counter market where securities are bought and sold after their issuance in the Primary market.

The most recent capital market downturn had a negative impact on the Nigerian banks balance sheet through increased provisioning for bad debts and lower profitability. Nigeria’s financial sector was hurt by the global financial and economic crises and the Central Bank governor has taken measures to strengthen the sector. In 2009, the CBN extended N678 billion in rescue packages to affected banks after they suffered from alleged poor corporate governance practices, negligent credit administration practices, and negligent credit administration processes and non – adherence to credit risk management practices. In August 2011, the Central Bank of Nigeria revoked the licenses of Afribank Plc, Bank PHB and Spring Bank Plc to pave the way for their nationalization and takeover by three “bridge banks”. The three were renamed MainStreet Bank (Afribank), Keystone Bank (BankPHB) and Enterprise Bank (Spring Bank). NDIC “sold” the three banks to the Asset Management Corporation of Nigeria (AMCON) through a “subscription” arrangement by which it will pay N285 billion for Mainstreet; N283 billion for Keystone; and N110 billion for Enterprise. AMCON was established on July 19, 2010, to be a key stabilizing and re-vitalizing tool established to revive the financial system by efficiently resolving the non-performing loan assets of the banks in the Nigerian economy. AMCON so far, has issued bonds worth N4.50 trillion to take up non-performing loans (NPLs) in the financial sector. The amount issued in bonds excludes the N678 billion that was injected into the three nationalized banks to raise their capital adequacy ratio to 15 % each to enable them to refund earlier cash infusions provided by CBN in 2009. The Nigerian Bond Market The Nigerian bond market is emerging despite its numerous limitations as a viable form of investment. from 2003, the Federal and State governments have both accessed the bond market on numerous occasions primarily to finance budget deficits and to finance long term capital projects such as road, building and rehabilitation of decayed and neglected infrastructure after lost decades. Nigerian state bonds have mushroomed since 2008 to 7 % of the overall bond market. Nigerian state bonds are tax-exempt and all except those of Lagos State Tranche 2 are backed by a payment order from the Central government, which deducts coupon and principal payments from the states receive from the overall budget. Over the last 15 months, the primary market for corporate bonds in Nigeria has recorded strong growth on the back of increasing awareness amongst corporate to match long term financing requirements with long term funds. Future Outlook Nigeria is expected to enjoy a period of robust economic expansion supported and bolstered by the following key factors:

Further entrenchment of democratic rule at all levels of government within the country;

Significant growth in public consumption as robust oil prices allow the government to expand its infrastructure development programmes with a particular focus on power generation;


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Prudent monetary policies aimed at stabilizing inflation and preventing excessive currency fluctuation;

Thriving services sectors, particularly the dynamic telecommunications sector and the construction of both privately and publicly financed infrastructure programmes;

Continued development of the agriculture sector, with food production increasing steadily. Agriculture will remain an important sector going forward, not only as a contributor to overall economic growth but also as a major employer of labour. (Source: Access Bank Research)

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 March 2012, the nation’s external debt stood at US$5.91 billion (Source: CBN Report) 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 1980 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 March 2012 was N5.96 trillion. 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. In December 30, 2011, the foreign reserve was US$32.9 billion and is currently US$36.2 billion as at April 2012. Foreign Exchange Exchange rates remained largely stable prior to the recession with the Naira strengthening against the United States Dollar to a high of N115.80 in May, 2008 (Source: Access Bank Research). However, as a result of speculative currency trading triggered by the reduction of external reserves following the global economic meltdown, coupled with the reduction in oil prices and global demand, there 'was significant demand for foreign currency ("FOREX") which led to a subsequent devaluation of the Naira. In a bid to liberalise the FOREX market, The Central Bank of Nigeria discontinued the Retail Dutch Auction System (RDAS) and re-introduced the Whole Dutch Auction (WDAS), which restored some stability in the FOREX market. As at April 2012, the official exchange rate was US$/N155.8.


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Inflation Over the last 5 years, inflation rate has dropped steadily from a high of 23.7% year-on-year (y/y) 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 and fell to 10.3% in December 2011. However, in January 2012, inflation rose to 12.6% due to the partial removal of subsidy on petroleum products which drastically pushed up prices of food and services on the back of increased transportation cost. As at August 2012, the inflation rate was 11.70%. Interest Rates Aggregate credit has continued to decline largely as a result of reduction in credit to the core private sector, and to states 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 % from March 22, 2011. In July 2011, MPR was reviewed upward to 8.75 %. MPR was also further raised by 275 basis points from 9.25 % to 12.0 % at the last Monetary Policy Committee Meeting held on January 23, 2012. 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.


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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 28% during the 1990s, per capita output rose by only 8.5 % 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 (Source: Access Bank Research). Industry 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 (Source: CBN Report and Access Bank Research). Nigeria's proven oil reserves are estimated to be 35 billion barrels (5.6 billion m3); natural gas reserves are well over 100 trillion ft³ (2,800 km³) (Source: CBN Report). 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 about 10% of overall U.S. oil imports and rank as the fifth-largest source for U.S. imported oil.


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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 US$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. Financial Services Seeking to develop a globally competitive financial sector, Governor Chukwuma Soludo, the CBN Governor from 2004 to 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.


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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 (Source: Access Bank Research), 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$2.6 billion) into the 5 banks. At the conclusion of the second phase of the examination in September 2009, another group of 5 banks was found to have varying degrees of distress. Of the 5 banks, 4 were found to be in a grave situation, namely Equitorial Trust Bank ("ETB"), Bank PHB Plc ("Bank PHB"), Spring Bank Plc ("Spring") and Wema Bank Plc. As with the initial 5 banks, the executive management of ETB, Bank PHB and Spring Bank were removed. Wema Bank PIc came under new management in June, 2009 and therefore the management was held responsible for the situation in the bank and were given until June 2010 to recapitalise the bank. Unity Bank was adjudged to have sufficient liquidity but fell short of the statutory required capital adequacy. Accordingly, the CBN ordered Unity Bank to re-capitalise before June 2010. To ensure stability in the banking sector, the CBN announced that it would offer additional liquidity support through term loans, totalling N200 billion (US$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 (US$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.


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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 (CBN Report). 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 N1.164 trillion to twenty-one (21) eligible financial institutions (EFIs) in consideration for non-performing loans worth N2.48tn. In March 2011, it commenced a N4.5 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 N1.164 trillion, N17.6 billion and N516 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. 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


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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 GOMBE STATE

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The information in this section has been extracted from documents and publications publicly available and released by the Gombe State Ministry of Information, public and private organizations, 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.

Introduction Gombe State was created on October 1st 1996. The State is located on Lat.9°30’ and 12°30N and Long.8°45’ and 11°45E in the centre of the North East Region of Nigeria. The state covers a land mass of 20,265sqkm with a climate of about 30°c during the hottest months. Annual average rainfall is about 850mm and according to the 2006 Population Census, the state was inhabited by 2,353,879 people. The state capital is Gombe and the official languages are English and Hausa. Political History The State was carved out of the old Bauchi State during the late General Sani Abacha’s administration on October 1st 1996. The creation of the State was a fulfilment of the aspiration of the people, who for long, had passionately craved for a state of their own out of the then larger Bauchi State. The State capital is Gombe and has eleven Local Government Areas (LGA) namely Akko, Balanga, Billiri, Dukku, Funakaye, Gombe, Kaltungo, Kwami, Nafada, Shongom and Yamaltu-Deba.

Table 1.2 Military Administrators and Governors of Gombe State: 1996 to 2012

Name Designation Period

Group Captain Joseph Orji Administrator October 1996 –August 1998

Mohammed Bawa Administrator August 1998 – May 1999

Abubakar Habu Hashidu Governor May 1999 - May 2003

Mohammed Danjuma Goje Governor May 2003 – May 2011

Ibrahim Hassan Dankwambo Governor May 2011- present

Topography The State is mainly mountainous, undulating and Hilly to the South-East and flat open plains in the Central, North-East, West and North-West. Vegetation Guinea Savanah grassland with concentration of wood lands in the South East and South West. Climate Gombe State is generally warm with average maximum temperature during the hot season, not exceeding 300 centigrade. There are two distinct seasons: the dry season (November to March) and the wet season (April to October). Average annual rainfall is 850mm. Local Languages The common languages in Gombe are Hausa, Fulfulde, Tangale, Tera, kanuri, Waja, Bolewa, Jukun, Tula, Cham, Dadiya, Pero, Lunguda, Kamo and Awak.

Ethnic Composition The State is Multi-Ethnic and mainly made up of Fulani, Tangale, Waja, Bolewa, Tera, Jukun, Jara, Pero, Tula, Chamawa, Lunguda, Dadiya, Kamo, Awak, Kanuri, Hausa, Yoruba, Igbo


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Agriculture Gombe is predominantly an agrarian State with more than 80% of the population engaged in agricultural production. Year round cultivation is possible in most parts of the State due to the availability of irrigation facilities and the existence of the three large dams at Dadin-Kowa, Balanga and Cham. The Dadin-Kowa dam is expected to irrigate about 6,200 hectares of farmland yearly and can support the production of more than 30,000 tons of grains, including rice, maize and groundnut as well as 5,700 tons of cotton. It is estimated that the dam can yield up to 20,000 tons of fish annually.

A number of food, cash crops and livestock are produced in the State. These are basic raw materials that can support various agro-allied industries, e.g.

Cereals Maize, Millet, Sorghum, Rice and Wheat Legumes Cowpeas, Groundnut, Soya Beans, Bambara Nuts Fruits Orange, Lemon, Mango, Guava, Paw-paw, Grapes Vegetables Tomatoes, Pepper, Onions, Okra, Pumpkin, Melon Industrial Crops Cotton, Kenaf, Sugar Cane, Benniseed, Sunflower and Ginger Tree Crops Gum Arabic, Cashew, Locust Beans, Shea Nuts Fisheries/Livestock Cattle, Sheep, Goats, Pig, Poultry, Rabbits and Fish

The State is the largest producer of cotton in the North-East sub-region, Except for cotton, all these crops are still sold in their raw forms. Cotton is processed into lint by four ginneries existing in the state, but there is no single spinning or textile mill to process the lint into yarn and apparels, respectively, Investors are needed in this direction

The Gombe grains and the Kwadon tomato depots are famous market spots where thousands of tons of assorted cereals and vegetables/fruits are marketed and transported to different parts of the country in their raw form. At the moment there is no single flour mill in the State with only one tomato and major mango juice processing company that is yet to start production.

Tannery and leather industries could utilize the large quantities of hides and skin in the State. Dairy industry would produce yoghurt and other milk product. A meat factory is also needed to process beef and other associated products, as well as commercial fishing and fish canning industry.

Gombe State: Comparative Advantages Gombe State is richly endowed with natural resources, including a vast arable and grazing land stretching through three vegetation zones comprising the forest savannah to the south, guinea savannah at the middle and Sudan savannah to the north. The ecological conditions of the state holds out enormous prospects for the abundant production of the variety of food crops including maize, millet, rice, sorghum , cowpea, groundnut, beans cotton, tomatoes, onion, pepper, garden egg, okro, cassava, cocoyam, sugarcane, tobacco and vegetables. The vast rich grazing land encourages the rearing of goats, sheep, cattle, donkeys and horses.

The vast water resources of the State comprising man-made, inland lakes and rivers afford the State great opportunities for fishery and tourism development activities. The presence of these inland masses of water and harnessing of their irrigation potentials means that all year round crop production is highly feasible in the state, including fish production. It is on this account of the abundance of the potential for multiple food production that Gombe State is usually perceived as the “Food Basket” of the north-eastern geopolitical zone as well as the “Jewel in the Savannah” The State has rich deposit of solid minerals in commercial quantities spread across the state , including clay , limestone , uranium, columbite,talc, silica sand, gypsum, halites, sphalesite, coal, zircon, agatey, dolomite, granite , quartz, galena, amethyst, mica, bentonite, tourmaline,opal,topez, iron ore and kaolin, among others.


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Economy The people of Gombe State are mainly farmers. They produce both food and cash crops. Among its food crops are yam, cassava, maize, tomato, groundnut, while cottons are produced for each. These products provide raw material for agro-based industries like the Tomato Company, cotton ginnery, and Groundnut Oil Mill in the state. Other industries are cement industry, furniture and block making industries, and other small industries. Gombe is richly endowed with natural resources like uranium, gypsum and limestone. Soil Conditions The State is endowed with rich agricultural land and about 80 % of the people are mainly peasant farmers involved in farming food and cash crops such as millets, sorghum, maize vegetable cotton and groundnut. Soils in the eastern part of Gombe State are shallow to deep loamy, sandy clay loam and vertisols with cracking clays, while on the chad formation in the northern part of the State, the soils are deep but sandy and developed on clays and silty clays; but are mostly blanketed by sand dunes. Hydro-Electric Power Generation The multipurpose Dadin-Kowa Dam which is Nigeria’s second largest after Kainji is located in Gombe State. It is managed by the Upper Benue River Basin Development Authority. The dam has sufficient hydro-electric power generation capacity to meet the requirement of the six North-Eastern States of Borno, Yobe, Adamawa, Taraba, Bauchi and Gombe. However, this Hydro-electric power potential is yet to be exploited. Although the generating house has since been completed, necessary turbines have not been supplied and installed. Government will work to secure all necessary approvals and support the marketing efforts of all interested power producers in order to guarantee profitable returns on their investment. Solid Mineral Development Gombe is a home to variety of solid minerals, from industrial and rocks that are yet to be exploited. More than 34 minerals are known to exist in the State in commercial quantities. They include: Clay, Limestone, Gypsum, Kaolin, Silica sand, Granite, Tale, Diatomite, Hulite, Barites, Mica, Bentonite, Calcite, Galena, Sphalerite, Iron Ore, Aquamarine, Ruby, Sapphire, topaz, Tourmine, Coal, Uranium, feldspar, Copper, Agate, Amethyst, Garnet, Basalt, Flourite, Corrundum, Vermiculate, Opal and Bog Iron. Gombe State has been accounting for 34% of the country’s total production of limestone, and 90% of the total production of gypsum. Both are key raw materials in the manufacture of cement. The State is seeking investors and joint partners in the large scale mining of gypsum, Kaolin processing and pharmaceutical blending companies are needed, same for paints and cosmetic companies. Real Estate Development Gombe State is seeking investors in the real estate development sector to meet the ever increasing demand for housing in the State. A recent housing demand profile in the State capital indicates that up to 5,000 residential housing units alone are urgently needed in the State and likewise Shopping Malls and shops even though the state has constructed over three hundred houses at Tumfure. Commerce For long, Gombe State has been the commercial nerve centre of the North-East region of Nigeria. It earned this reputation due to its central location in the region. Multinational chain stores and commodity depots are


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well established in Gombe, the State Capital, Amongst these are the Manufacturers Delivery Services (MDS), Unilever, CFAO, Mr. Biggs, Nestle Foods, Pfizer, Nigeria Botling Company Plc, Nigeria Breweries Plc, NASCO Foods, Dangote Group of Companies e.t.c. Mineral Resources in Gombe State

S/N TYPE OF MINERAL LOCATION (LGAs)

1 Beatonite Gombe, Dukka, Balanga, Akko, Shongom, Y/Deba, Kwami, Nafada & Funakaye

2 Limestone Funkaye, Gombe, Balanga, Akko, Nafada & Y/Debu

3 Gypsum Akko, Y/Deba, Kaltungo, Gombe, Kwami, Funkaye, Shongom & Nafada

4 Kaolin Dukku, Nafada, Gombe & Kaltungo

5 Silica Sand Dukku, Akko, Billiri, Kaltungo & Y/Deba

6 Granite Kaltungo, Shongom, Billiri, Gombe & Balanga

7 Tale Billiri, Balanga & Akko

8 Diatomite Gombe

9 Iron Ore Kaltungo & Y/Deba

10 Barytes Kaltungo & Y/Deba

11 Sapphire Shongum, Kaltungo, Billiri & Y/Delba

12 Tourmaline Kaltungo, Billiri, Balanga & Y/Deba

13 Topaz Kaltungo, Billiri, Balanga & Y/Deba

14 Bog Iron Kaltungo, Billiri, Balanga & Y/Deba

15 Calcite Balanga, Billiri, Kaltungo & Y/Deba

16 Felspar Gombe & Kaltungo

17 Fluorite Gombe

18 Galena Billiri, Akko & Kaltungo

19 Opal Kaltungo

20 Sphalerite Kaltungo

21 Amethyst Akko, Kaltungo, Billiri, Gombe & Balanga

22 Agate Akko

23 Mica Akko & Gombe

24 Garnet Billiri & Y/Deba

25 Coal Akko & kwami

26 Aquamarine Gombe & Billiri

27 Basalt Balanga, Billiri & Kaltungo

28 Copper Akko

29 Pubby Kaltungo, Shongom & Billiri

30 Corundum Shongom, Kaltungo & Billiri

31 Verniculate Akko

32 Uraninite Kaltungo, Gombe & Y/Deba

Agro Based Raw Materials in Gombe State

S/N TYPE LOCATION (L.G.As)

1 Tomatoes Y/Deba, Balanga, Akko & Kaltungo

2 Sorghum All Over the State

3 Maize All Over the State

4 Millet All Over the State

5 Rice Y/Deba & Balanga

6 Cassava Billiri, Kaltungo & Balanga


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7 Beans All Over the State

8 Groundnut All Over the State

9 Cotton Gombe, Akko, Billiri,Kaltungo, Balanga & Y/Deba

10 Poultry Gombe,Billiri, & Kaltungo

11 Livestock Billiri, Kaltungo, Balanga, Dukku & Akko

12 Fishery Y/Deba & Balanga

13 Gum Arabic All Over the State

Others Water Resources The River Gongola traverses the State watering most of the Northern and North-Eastern

part of the state before emptying into the River Benue at Numan. Other numerous

streams that are mostly seasonal also serve as tributaries to the River Gongola.

Underground water reserve in the State is high.

Dams: Three Dams namely the Dadin Kowa Multipurpose Dam,the Balanga Dam and the Cham

Dam provide facilities for irrigation and regional water supply schemes in the state.

Power: The state is served by the PHCN National grid through the North-East PHCN substation

located in Gombe the state capital.

Telecommunication: Provided by NITEL and GSM in the State owned radio and Television station and the

Nigerian Television Authority (NTA). MTN, ZAIN, Globacom, M-TEL and Etisalat.

Airport: The State now has an International Airport and also surrounded by four International

Airports, located at Kano, Jos, Yola, and Maiduguri.

Roads: Five Federal trunk “A” roads connect the State Capital with all parts of the Country

Township Roads have been constructed in the state capital and other major towns

Railways: The State is served by the Lagos Jos-Maiduguri Rail-line which passes through Gombe the

State capital.

Hospital: There are eleven General Hospitals, Cottage Hospitals and Comprehensive Health centers

in addition to Federal Medical Centre in the state which serve as a Referral hospital.

Schools: A state owned University has been established to absorb the products of Secondary

Schools and provide high level manpower in the State. Government has also established a

school of Nursing and Midwifery in Gombe, the School of Health Technology in

Kaltungo, the College of Administrative and Business Studies Kumo and four skill

acquisition centres at Lubo, Ture, Tongo and Kashere

Security: Enjoys lasting peace and security since creation in 1996. There is adequate presence of the

Nigerian Police, Army, Civil Defence corps and other security outfits in the State which

guarantee absolute safety of lives and property.

Tourist Attraction: (i) The tomb of Sultan Attahiru at Borni near Bajoga. There is also the grave of the

commander of the British Royal Regiment, Major F.C Marsh who led the imperial army

against the sultan


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(ii) Tomb of Buba Yero, the first Emir of Gombe Abba, near Dukku.

(iii) The famous Bima Hill: a lot of mysteries surround this extraordinary mountain,

especially related to the emergence of the Mahdi (messiah).

(iv) Kanawa Forest: the first Gombe State recreation center would be established at

this plantation forest. It has a very wonderful weather, beautiful vegetation and appealing

site.

(v) The Dadin- Kowa Dam: the dam project is a three- fold dream of making it as a

source to generate 34 megawatts Hydro Electric Power, for Irrigation purpose and Water

supply to Gombe town and immediate environs.

(vi) Kilang Hill: it has a pentagonal shape and the highest protruding volcanis dyke in

the North-East sub region.

(vii) The ancient Binga ruins of the ancient Binga settlement of the famous Pindiga

Jukun chiefdom that served as an arm of the then Kwararafa kingdom is located south-

west of present Pindiga town.

(viii) Tula Plateau: a naturally beautiful scenery with deep valley, temprate weather and

war caves.

(ix) Bulok Warm Springs in Lalaipido ward of Shongom L.G.A.

(x) Gombe Main Market: the daily hustle and bustle of buyers and sellers in the

commercial nerve center of the North-East region.

(xi) Durbar: usually organized to celebrate Muslim holidays or when occasions

demand; purely a horse racing for the traditional homage to the emir

(xii) Sharo: a purely Fulani cultural activity as a measuring yard stick to ones proper

initial qualification for certain priviledges e.g marriage, leadership etc.

(xiii) Dambe and Kokuwa: traditional boxing and wrestling marked at the end of

harvesting period.

(xiv) The state is blessed with famous traditional dancing groups like the Ngorda

International Dancers, Tangale Bit-bit, Jukun Jaba Dancers, Sassa Ture, Waja dancers,

Cham dancers, Bolawa Baba Nare and the dazzling performance of the state cultural

troupe.

(xv) Ngaji Forest Gadam.

(xvi) Kalam hill a plateau settlement of the ancient bolawa kingdom located in Dukku

Local Government Area.


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STATE EXECUTIVE COUNCIL Brief Profile of the Executive Council Members The Gombe State Executive Council is headed by His Excellency, Alhaji Ibrahim Hassan Dankwambo. The profile of the members of the Gombe State Executive Council are stated below:

Alhaji Ibrahim Hassan Dankwambo – Executive Governor, Gombe State Alhaji Ibrahim Hassan Dankwambo was born on April 4, 1962. He attended the Ahmadu Bello University (ABU), Zaria and graduated with a Bachelor of Science (B.Sc.) degree in Accounting in 1985. He also attended the University of Lagos, where he got his Master of Science (M.Sc.) in Economics in 1992, before proceeding to the Delta State University, Abraka, for his Post Graduate Diploma in Computer Science, in 1998.

He started his working career with Cooper and Lybrand International (Chartered Accountants), now PriceWater HouseCoopers from 1985 to 1988. In 1988, he joined the services of the Central Bank of Nigeria (CBN) till 1999, when he was appointed Accountant-General of Gombe State, a post he held till 2005. Alhaji Dankwambo was appointed Accountant General of the Federation (AGF) in April 2005.He became the governor of Gombe State in May, 2011. He is a holder of the award of the Officer of the Order of the Niger (OON),

Mr. Tha’anda Jason Rubainu – Deputy Governor and Commissioner for Land and Survey Tha’anda Jason Rubainu was born on May 6, 1948. He attended Bauchi Teachers College from 1964 to 1969; and University of Lagos, in 1992- Diploma in Management, in 1993- Advance Diploma in Business Administration, and in 1996- Advance Diploma in Purchasing and Supply Management.

He started his career as a teacher in St. Paul School, Bauchi. He was Supply Manager at Savannah Sugar Limited,

from 1977 to 1982. In 1983, he became a member of the House of Representatives, National Assembly, and Federal

Republic of Nigeria. After his tenure at the National Assembly, he rejoined Savannah Sugar Company, as Area

Manager covering Lagos and Abuja. A position he held up to 2001, when he was appointed NAPEP Chairman/Co-

ordinator Gombe State. He was also a member of the board of directors of Federal Airports Authority of Nigeria

(FAAN).

Mr. Abubakar Sulei Bage – Secretary to the State Government

Abubakar Sulei Bage was born on December 12, 1960. He attended Ahmadu Bello University, where he bagged a

Bachelor of Science (B.Sc) degree in Political Science in 1981. He is an Alumnus of the Institute of Social Studies,

The Hague, Netherlands.

He commenced his career working for the Bauchi State Government, starting as an Administrative Officer. The

positions he held spanned across the entire range of posts in the administrative cadre. He left the Bauchi State

Government, for Gombe State, in 1996, as the Principal Private Secretary to the Military Administrator Gombe

State. He was appointed Secretary to Gombe State Government in 2007, a position he holds till date.


39

Mr. Hassan Muhammadu – Honourable Commissioner for Finance

Hassan Muhammadu was born on September 28, 1962. He attended Ahmadu Bello University, where he picked up a Diploma in Accounting & Finance in 1983; Ahmadu Bello University, where he gained a Bachelor of Science (B.Sc) degree in Accounting & Finance in 1987, and he is also an Alumnus of the honored Goldman Sachs University, United Kingdom in 2008. He is an Associate of Chartered Institute of Cost and Management Accountants (ACMA).

He commenced his career at Afribank Nigeria Limited, in 1981, where he served as Deputy Branch Manager for 3

years before going back to school for a degree in Accounting. He later re-joined Afribank, in 1987, and rose

through the ranks before leaving the bank. He has also managed several big-ticket projects including the Nigeria

Debt Management Office Capacity Building Project.

He served as Special Adviser to the Minister of the Federal Capital Territory, and also to the Honorable Minister of

Finance, Federal Republic of Nigeria.

Mr. Abdul-Hameed Ibrahim – Honourable Commissioner for Justice and Attorney General

Abdul-Hameed Ibrahim was born on September 7, 1961. He bagged a Bachelor of Law degree (LL.B. Hons) in

1987, from University of Sokoto, and he attended the Nigerian Law School, Lagos in 1988.

He commenced his legal career in 1989, with Bako Abdullahi Chambers and then took on the role of Manager

Administration and Legal Services at Savannah Sugar Company Limited, from 1999 to 2002, before he joined

Federal Radio Corporation of Nigeria in 1999. He rose through the ranks, and was later transferred to the Federal

Ministry of Justice in the capacity of Assistant Chief Legal Officer, in 2005.

Mr.Ahmed Abubakar Walama – Honourable Commissioner for Local Govt. and Community Development

Ahmed Abubakar Walama was born on April 6, 1965. He obtained a Bachelor of Science (B.Sc) degree in Business

Administration from the University of Maiduguri in 1991 and a Master of Science (M.Sc.) degree in Business

Administration from Bayero University, Kano in 1995. He was also awarded a Certificate in Computer applications

from the University of Port Harcourt in 1993.

He had a stint in Nigerian National Petroleum Corporation (NNPC), between 1986 and 1988, and worked with

several other institutions before being elected as Executive Chairman, Dukku Local Government Council, Gombe

State, in 2004, a position he held until 2011.

Mr. Mijinyawa Sani Labaran – Honourable Commissioner for Youth and Empowerment

Mijinyawa Sani Labaran was born on September 25, 1970. He attended Central Primary School Gombe, from 1982

– 1987; Government Science Secondary School Gombe, from 1992 to 2000; and he obtained a Bachelor of Science

(B.Sc) degree in Physics from University of Maiduguri in year 2000.

He has worked as an Academic Staff at the Federal Polytechnic Bauchi since 2003 until his appointment as the

Commissioner for Youth and Empowerment.


40

Dr. Ishaya Kennedy – Honourable Commissioner for Health

Dr. Ishaya Kennedy was born on October 1, 1960. He obtained a combined Bachelor of Science (B.Sc.) in Medicine

and Surgery from University of Jos in 1987. He also attended School of Legal Studies, Yola in 2010.

He commenced his working career in 1989, as a Medical Officer at Ministry of Health, Bauchi State General

Hospital, Gombe, where he rose through the ranks. He later Joined Salem Medical Clinic, Gombe, as Managing

Director/ CEO in 1998. He is also a member of several professional bodies such as the Guild of Medical directors

(GMD), the American College of Physician Executives (ACPE), and the Nigerian Medical Association (NMA).

Alhaji Jalo Abubakar – Honourable Commissioner for Special duties

Alhaji Jalo Abubakar was born on February 1958. Although he obtained a National Certificate in Education (NCE)

in 1988, he commenced his working experience in 1977 as a Primary School teacher in Wakkaltu and put an end to

his teaching career in 1989, having risen to the position of Headmaster.

He was elected as Executive Chairman Nafada Local Government Bojaga in 1991 and stayed in power till 1993. He

was then reelected in 1996. He has also served the Gombe State Government in several positions including,

Permanent Commissioner Local Government Service Commission, from 1999 to 2003; Special Assistant on

Political Matters to the Executive Governor, from 2006 to 2007 and Member Finance Committee, Lower Benue

River Basin Development Authority, in 2009.

Dr Hamza Sule Wuro Bokki Fcpin – Honourable Commissioner for Trade and Industry

Dr. Hamza Sule Wuro Bokki FCPIN was born on September 26, 1959. He bagged a Bachelor of Science (B.Sc.) in

Public Administration (First Class honors), in 1990 and was the best graduating student from University of

Maiduguri Borno State. He also obtained a Masters degree from the University of Maiduguri, and a Ph.D in Public

Administration and Policy analysis from University of Abuja in 2010.

He served as Supervisory Councilor for Education Gombe Local Government, Gombe State; and was also Vice

Chairman and Councilor Primary Health Care Caretaker Committee, Yamaltu Deba Local government Gombe

State, from 1995 to 1996. He was the Managing Director, Jewel Investment Services Limited, from 1996 to 2002,

and was the pioneer Managing Director, Apt Pension Funds Managers Limited.

Dr Hassan A Haruna – Honourable Commissioner for Cooperative and Rural Development

Dr. Hassan Haruna was born on May 27, 1958. He obtained a Bachelor of Science (B.Sc.) degree in Biology from

University of Jos in 1983.

He began his working career in 1985 as a class teacher, and rose to the rank of Principal, G.S.S Bajoga in 1994. He

was Executive Chairman, of Balanga Local Government area, from 1999 to 2003, and of Subeb Gombe, from 2003

to 2006. He was also a member of the House of Representative arm of the National Assembly, from 2007 to 2011.

He has received several awards including the Shehu Yaradua Merit Award on People Oriented Programmes.


41

Mrs. Aishatu M.B. Ahmad – Honourable Commissioner for Education

Aishatu M.B. Ahmad was born on August 14, 1966. She bagged a Bachelor of Arts in 1990 and a Masters degree in

English in 1997, from University of Maiduguri and University of Jos respectively.

She lectured at the Abubakar Tafawa Balewa University, Bauchi, from 1992 from 1997, before she went on to

lecture at Federal College of Education, Gombe, in 1997. She has also written a number of books including Vision

of the Jewel, Voice from the Kitchen and The Twist.

She was a member of the State Universal Basic Education Board, Gombe state, from 2004 to 2007, and has also

served on the board of trustees of several associations. She was appointed Commissioner of Education, Ministry of

Education Gombe state, in 2007.

Mr. Dahiru Buba Biri – Honourable Commissioner for Agriculture

Dahiru Buba Biri was born on August 20, 1954. He gained a Bachelor of Science (B.Sc) degree in Agriculture, in

1977, from Ahmadu Bello University; and a Master of Science degree, from WYE College, University of London in

1982. He is a member of Nigeria Institute of Marketing, and Farm Management Association of Nigeria.

He commenced is career as an Agric Credit Officer at Bauchi State Ministry of Agriculture. He subsequently spent

17 years at Savannah Sugar Company Limited, leaving as Commercial Manager in 2003. He has also been

Honorable Commissioner for the Ministries of Agriculture, Education, and Health and a Governorship Candidate

at the last election.

Mr. Mohammed Danladi – Honourable Commissioner for Economic Development

Mohammed Danladi was born on September 29, 1968. He studied Bachelor of Science (B.Sc.) degree in Economics

at the University of Maiduguri in 1991, and bagged a Master of Business Administration degree from Abubakar

Tafawa Balewa University in 2005.

He is a member of the Nigerian Institute of Management, and the Certified Institute of Economics. He has worked

with Joint Admissions and Matriculations Board (JAMB) since 1998 as Chief Administrative Board Officer.

Mr. Bulus Samuel Adamu - Honourable Commissioner for Culture and Tourism

Bulus Samuel Adamu was born on November 12, 1968. He obtained a Bachelor of Arts Degree in Education from

the ECWA Theological Seminary in Jos in 1996, after which he bagged a Master of Business Administration from

Abubakar Tafawa Balewa University in 2008.

He was a teacher at Walter Gowans Memory College Lasule, Gombe, from 1997 to 1999. He won an election, in

1999, to become the Councilor of Ladipo ward, Shongom Local government area. He was also elected Chairman of

Shongom Local Government Area, between 2008 and 2011, and became the caretaker Chairman after his tenure.

Mr. Adamu released a publication titled, An Analysis of the Human Needs in the Local Government Areas of

Gombe State, in 2008.

Mr. Muhammed Isa Abdullahi – Honourable Commissioner for Higher Education

Muhammed Isa Abdullahi was born on September 14, 1968. He attended University of Maiduguri where he

obtained a Bachelor of Science (B.Sc.) degree in Public Administration in 1991, University of Abuja where he

obtained a Master degree (M.Sc.) in Public Administration & Policy Analysis in year 2000, and also the Ahmadu

Bello University; where he obtained a Ph.D in Public Administration in 2008.


42

He is an academician, who started his career as a class teacher in G.S.S. Liman Katagum. He later joined Bauchi

State Polytechnic as an Assistant Lecturer. Consequently, he rose through the ranks to become a Senior Lecturer at

the University of Abuja in 2008. He is a member of several professional associations.

Mrs. Fatima Abubakar – Honourable Commissioner for Women Affairs

Mrs. Fatima Abubakar was born on May 3, 1968. She attended University of Maiduguri, where she earned her

Bachelor of Science (B.Sc.) degree in Geography in 1990 and Master of Science (M.Sc.) degree also in Geography

in year 2000.

She commenced her career with Afribank in 1991, where she worked and headed several departments, before

voluntarily retiring in 1997.

Mr. Habu Dawaki (Rev) – Honourable Commissioner for Information

Habu Dawaki was born on September 23, 1962. He attended Abubakar Tafawa Balewa University, for a Post

Graduate Diploma in Management which he obtained in 1999; and Kaduna Polytechnic, for a HND in Mechanical

Engineering where he obtained in 1983. He is a member of Institute of Corporate Executives of Nigeria (MICEN),

and The Institute of Mass Communication and Information Management of Nigeria (MMIM).

He is the Founder/President of Destiny Foundation, Kaduna. He was Resident pastor, International Praise

Cathedral, Kaduna, from 2000 to 2007 and sits on the board of several institutions and associations. He has also

won a number of awards including the Merit award for Service to Humanity, from Betty International Schools,

Kaduna; and the distinguished merit award for excellence in Service to Humanity from The Institute of Corporate

Executives of Nigeria.

Mr. Ahmad Shehu Hadi – Honourable Commissioner for Works

Ahmad Shehu Hadi was born on May 17, 1961. He attended Ahmadu Bello University, Zaria, where he earned his

Bachelor of Science (B.Sc) degree in Building in 1984, and a Masters degree (M.Sc.) in Structural Engineering in

1998. He is a member of several Professional bodies, including the Institute of Management Consultants, the

Nigerian Institute of Building and the Institute of Nigerian Society of Engineers.

He lectured in Kaduna Polytechnic for 5 years, before joining Federal Capital Development Authority (FCDA) -

Abuja, in 1993.

Mr. Babagoro Abdulkadir Yahaya – Honourable Commissioner for Science and Technology

Babagoro Abdulkadir Yahaya studied Law and obtained (LL.B Hons) from University of Jos in 1985, then went

ahead to the Nigerian Law School, Lagos in 1986.

He commenced his career as State Counsel at the Ministry of Justice, Bauchi. He was also Senior Counsel at Idris

Abubakar & Co. and Y.M Na Allah & Co. He was appointed as Special Assistant to Gombe State Governor in 1999

(to 2003) and in 2009 (to 2011).

Hon. Dr. Rabenson Z. Wasa (JP) – Honourable Commissioner for Housing and Transport

Hon. Dr. Rabenson Z. Wasa was born on September 19, 1962. He attended Banganje Primary School, from 1974 to

1980; Government Secondary School Billiri, from 1980 to 1983; Government Secondary School Dadin to Kowa,

from 1983 to 1985; and Federal Polytechnic Bauchi, from 1998 to1999, where he obtained a certificate in Public

Administration, and also a Diploma in Business Administration and Management from 2002 to 2004.

He worked with the Ministry of Works &Transport of Bauchi State, from 1989 to 1996, and that of Gombe State,

from 1996 to 2004. He also worked in the Office of the Head of Civil Service Gombe State between 2004 and 2005.


43

He was appointed as Special Adviser on Environment, to the Executive Governor of Gombe State, in 2005.

Honorable Wasa has also served has the Chairman on the board of several committees. He has received several

awards including best performing Chairman on Education in Nigeria, best performed Local Government Chairman

in the Northern region.

Mr. Idris Muhammad Mahdi – Commissioner for Water Resources Town Planning

Idris Muhammad Mahdi was born on December 15, 1960. He attended, Tudun Wada Primary School Gombe, from

1968 to 1974; and Government Secondary School Kaltungo, from 1974 to 1979. He also obtained a Bachelor of

Science (B.Sc.) degree in Building from University of Jos in 1984, and a Master degree (M.Sc.) in Building Services

Engineering from University of West London (Brunel). He is a member of several professional bodies, including

Institute of Corporate Executives of Nigeria (MICEN), Council of Registered Builders of Nigeria (MCORBON)

and Nigeria Institute of Building (MNIOB)

As a professional engineer, he has handled a number of large projects within Nigeria, including the African

Development Bank (ADB) financed health projects in Bauchi and Gombe States, Bauchi Central Market and

Bauchi Indoor Sports Hall. He has held several political positions such as Sole Administrator, Dukku Local

Government Council, Gombe State; Deputy Director, Planning, State Primary Education Board, Gombe State; and

Deputy Director, Building, Gombe State Ministry of Works.

He has also worked as the Assistant General Manager (Properties), Gombe State Investment and Property

Development Company Limited. Prior to his appointment as a Commissioner, he was the Director, Estate and

works, National assembly.

Mr. Jeremiah T. Dillos – Auditor General

Jeremiah Dillos was born on April 1, 1958. He gained a Bachelor of Science (B.Sc.) degree in Economics from the

University of Maiduguri, in 1988. He is a member of the Association of National Accountants of Nigeria.

He has worked with the Bauchi State Government in several capacities including Head of Government

Department, Head of Government Treasury Accounts, Deputy Auditor- General and Ag. Auditor- General.


44

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

2007 21,441,929,419 4,629,668,723

2008 37,189,602,969 7,213,769,530

2009

2010

2011

25,009,859,171

30,370,711,190

42,351,683,554

8,578,146,603

7,885,780,488

7,543,046,676

Source: Reporting Accountant’s Report

Figure: FAAC Revenue and IGR of Gombe State

RISK AND MITIGATING FACTORS FOR THE PROGRAMME

45

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.

The Nigerian Bond Market is undoubtedly in the process of dominating Nigeria’s economic sector. Investors seeking to invest in emerging markets like Nigeria have recognized the bond market as a viable way of ensuring steady returns on investment as opposed to equities.

Bonds are an attractive high-return and low risk investment opportunity as they attract interest at a predetermined rate and have guaranteed returns. Investors enjoy high and stable returns.

Government bonds are issued to finance developmental projects. Corporate bonds are issued by corporate entities to finance business expansion and diversification. Government bonds enjoy some level of tax exemption and are free from default risk, as they are secured on the nation’s assets. Bonds can be used as collateral for borrowing from Banks and other financial institutions. Also, they are easily tradable on the Nigerian Stock Exchange (NSE) before maturity.

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


46

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. Mitigating factor: The price of crude oil is beyond the control of Gombe 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: Gombe 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 Gombe 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.

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.


47

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 Gombe 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.

48

FINANCIAL INFORMATION HISTORICAL

REPORT OF THE AUDITOR GENERAL OF THE STATE

49


LETTER FROM THE REPORTING ACCOUNTANTS

50


STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies adopted in the preparation of the financial statements of Gombe State Government ("the State"), which underlie the financial information, are set

(a) Basis of preparation

The financial statements are prepared on a cash basis consistent with government accounting policies under the historical cost convention and comply with the provisions of the Financial (Control and Management) Act 1958 as amended.

(b) Assets and Liabilities

Assets and liabilities are stated at their net values.

(c) Cash and bank balances

Cash and bank balances comprise current account balances and placements denominated in Naira and held with commercial banks in Nigeria.

(d) Investments

Investments held are stated at market values. Differences arising from investment valuation are adjusted against the consolidated revenue fund through the income and expenditure account.

(e) Borrowings

Borrowed funds (internal and external loans) are initially recognised at their issue proceeds and subsequently stated at face value less amount repaid. Interest expenses on loans are described as public debt charges and are recognised in the revenue and expenditure account over the duration of the loan.

(f) Consolidated revenue funds

Consolidated revenue fund represents the aggregated balance of the revenue and expenditure account after all the revenue and expenditure for the year have been recognised.

(g) Capital development fund

Capital development fund represents the aggregated balance after the capital receipts and expenditure for the year have been recognised. It also includes annual transfers from the consolidated revenue fund as provided in the annual budget of the State.

(h) Statutory allocation

Statutory allocation is made up of revenues collected on a monthly basis which represents the State's share of the Federation account. Share of the State in the Federation account, excess crude receipt and refund from Paris Club are all included in the gross statutory allocations in the financial statements. Statutory allocation is recognised in the financial statements when received.

(i) Recurrent revenue and expenditure

Recurrent revenue are revenue generated by the State from taxes, fines, rent on government properties, dividend income from investments and other incidental revenue. They are recognized in the financial statements when received. Recurrent expenditure are expenditure on personnel costs, pension and gratuities, salaries of statutory office holders, other overheads and public debt charges. They are recorgnised in the financial statements of the State when payments are made.

51


FIVE YEAR FINANCIAL SUMMARY

Statements of assets and liabilities

31 -Dec-1 1 31 -Dec-1 0 31 -Dec-09 31 -Dec-08 31 -Dec-07

N'million N'million N'millionN'000 N'million N'million

Assets Note

Cash and bank balances 1 1 1 ,220 1 ,561 1 ,908 7 ,607 2 ,7 05

Inv estments 2 1 ,081 1 ,485 1 ,1 68 2 ,283 2 ,245

Imprest and adv ances 1 49 232 61 9 61 9 267

Total assets 1 2,450 3 ,27 8 3 ,695 1 0,509 5,21 7

Liabilities

Internal loans 5,946 5,7 1 8 2 ,456 1 ,57 2 1 31

External loans 3,865 3 ,1 23 2 ,968 2 ,57 7 2 ,546

Liabilities ov er assets 3 - - - - -

Total liabilities 9,81 1 8,841 5,424 4,1 49 2 ,67 7

Net assets/liabilities 2,639 (5,563) (1,729) 6,360 2,540

Represented by

Consolidated rev enue fund 4 (6,97 9) (6,1 66) (1 ,7 92) 5,837 2 ,530

Capital dev elopment fund 5 9,61 8 603 63 523 1 0

2,639 (5,563) (1,729) 6,360 2,540

52



Statements of revenue and expenditure


N'million N'million N'million N'million N'million

Note

Revenue

Gross statutory allocation 6 42,352 30,37 1 25,009 37 ,1 90 21 ,442

Recurrent rev enue 7 1 0,1 47 8,1 61 8,57 9 7 ,21 2 4,629

Total revenue 52,499 38,532 33 ,588 44,402 26,07 1

Expenditure

Recurrent expenditure 8 (29,466) (23,1 51 ) (1 9,967 ) (1 8,81 4) (1 4,1 28)

Public debt charges 9 (5,034) (4,01 6) (2,530) (554) (3 ,7 01 )

Miscellaneous expenses 1 0 (2,604) (3 ,1 07 ) (2,7 85) (3 ,7 28) (2,399)

Surplus of rev enue ov er expenditure 1 5,395 8,258 8,306 21 ,306 5,843

Transfer to capital dev elopment fund 5 (1 4,7 51 ) (9,1 46) (1 3 ,546) (1 6,91 5) (3 ,428)

Transfer (from)/to consolidated rev enue fund 4 644 (888) (5,240) 4,391 2 ,41 5

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Cash flow statements


N'million N'million N'millionN'000 N'million N'million

Cash flow from operating activities

Receipts

Gross statutory allocation 6 42,352 30,37 1 25,009 37 ,1 90 21 ,442

Value added tax 6,1 27 5,557 4,453 3 ,81 4 2 ,861

Internally generated rev enue 7 ,528 5,67 5 5,548 4,329 2 ,7 67

Grants and subv entions 8,309 3 ,1 87 2 ,322 5,626 5,866

Below the line receipts 2,604 2 ,486 3 ,024 2 ,87 6 1 ,848

Total receipts 66,920 47 ,27 6 40,356 53 ,835 34,7 84

Pay ments

Personnel emoluments (9,051 ) (7 ,468) (7 ,1 67 ) (5,923) (4,604)

Ov erhead costs (23,01 9) (1 8,7 89) (1 5,584) (1 6,621 ) (1 1 ,924)

Total pay ments (32,07 0) (26,257 ) (22,7 51 ) (22,544) (1 6,528)

Net Cash flow from operating activities 34,850 21,019 17,605 31,291 18,256

Cash flow from investing activities

Purchase/construction of assets 5b (25,7 55) (24,605) (24,344) (27 ,640) (1 4,606)

Net cash flows from investing activities (25,755) (24,605) (24,344) (27,640) (14,606)

Cash flows from financing activities

Proceeds of loans/borrowings 5a 5,583 7 ,255 3 ,563 1 ,7 98 1 ,263

Div idend receiv ed 1 5 - 7 7 1 4

Repay ment of loans 9 (5,034) (4,01 6) (2,530) (554) (3 ,7 01 )

Net cash flows from financing activities 564 3,239 1,040 1,251 (2,424)

Net increase/(decrease) in cash and bank balances 9,659 (347 ) (5,699) 4,902 1 ,226

Cash and bank balances, beginning of y ear 1 ,561 1 ,908 7 ,607 2 ,7 05 1 ,47 9

Cash and bank balances, end of y ear 1 1 1 ,220 1 ,561 1 ,908 7 ,607 2 ,7 05

54


NOTES TO THE FINANCIAL INFORMATION 31 -Dec-1 1 31 -Dec-1 0 31 -Dec-09 31 -Dec-08 31 -Dec-07


1 Cash and bank balances

Current account balances with Nigerian banks 8,965 7 31 1 ,57 1 1 ,31 6 2 ,47 9

Placement with Nigerian banks and other

financial institutions 2,255 830 337 6,291 226

1 1 ,220 1 ,561 1 ,908 7 ,607 2 ,7 05

2 Investments

Quoted inv estments 625 51 5 51 5 51 5 7 25

Unquoted inv estments 443 1 ,7 7 7 1 ,7 7 7 1 ,7 7 7 624

As prev iously reported 1 ,068 2 ,292 2 ,292 2 ,292 1 ,349

Adjustment #1 - Differences with detailed records 1 3 (807 ) (1 ,1 24) (9) 896

1 ,081 1 ,485 1 ,1 68 2 ,283 2 ,245

3 Liabilities over assets

At 1 January 6,31 6 2 ,51 3 1 ,239 1 ,060 6,088

Internal loans 228 3 ,262 - 1 ,442 (2 ,020)

External loans 7 42 1 55 - 32 (3 ,01 4)

Adv ances 83 386 1 ,27 4 (352) 7

Inv estments 1 ,224 - - (943) (1 )

As prev iously reported 8,593 6,31 6 2 ,51 3 1 ,239 1 ,060

Adjustment # 2 - Transfer to consolidated rev enue fund (8,593) (6,31 6) (2 ,51 3) (1 ,239) (1 ,060)

- - - - -

4 Consolidated revenue fund

At 1 January 957 1 ,845 7 ,085 2 ,694 27 9

Net operating (deficit)/surplus 644 (888) (5,240) 4 ,391 2 ,41 5

As prev iously reported 1 ,601 957 1 ,845 7 ,085 2 ,694

Adjustment #1 - Differences with detailed records 1 3 (807 ) (1 ,1 24) (9) 896

Adjustment # 2 - Transfer to consolidated rev enue fund (8,593) (6,31 6) (2 ,51 3) (1 ,239) (1 ,060)

(6,97 9) (6,1 66) (1 ,7 92) 5,837 2 ,530

5 Capital development fund

At 1 January 603 63 523 1 0 1 ,1 98

Transfer from rev enue and expenditure account 1 4,7 51 9,1 46 1 3 ,546 1 6,91 5 3 ,428

Other capital receipts (Note 5a) 20,01 9 1 5,999 1 0,338 1 1 ,238 9,990

35,37 3 25,208 24,407 28,1 63 1 4,61 6

Capital expenditure (Note 5b) 25,7 55 24,605 24,344 27 ,640 1 4,606

9,61 8 603 63 523 1 0

5a Other capital receipts

Value added tax 6,1 27 5,557 4 ,453 3 ,81 4 2 ,861

Internal loans 4,654 6,504 2 ,806 1 ,57 5 650

External loans 929 7 51 7 57 223 61 3

Grants and subv entions 8,309 3 ,1 87 2 ,322 5,626 5,866

20,01 9 1 5,999 1 0,338 1 1 ,238 9,990

55


NOTES TO THE FINANCIAL INFORMATION 31 -Dec-1 1 31 -Dec-1 0 31 -Dec-09 31 -Dec-08 31 -Dec-07


5b Capital expenditure

Agriculture 3,048 3 ,431 2 ,031 2 ,554 2 ,322

Forestry 1 - - 52 -

Fisheries 5 - - - -

Power - - - 7 ,428 57 7

Manufacturing 1 ,1 27 1 ,567 3 ,1 03 - -

Commerce and finance 886 1 ,481 666 1 ,240 -

Transport 9,949 8,932 9,064 9,045 6,425

Education 4,820 4 ,023 3 ,062 1 ,963 2 ,27 0

Health 1 ,235 952 2 ,1 96 1 ,231 809

Information 6 59 1 57 31 0 1 8

Social dev elopment, y outh and sports 7 1 3 886 639 1 ,223 -

Water supply 245 91 7 1 ,352 47 6 1 ,1 94

Env ironment, sewage/drainage 47 1 31 8 1 98 1 21 5

Housing 1 56 1 56 36 57 7 97

Urban dev elopment 638 997 1 08 7 7 7 4

Community dev elopment - 5 22 27 69

Administration 2,455 881 1 ,7 1 0 1 ,31 6 7 46

25,7 55 24,605 24,344 27 ,640 1 4,606

6 Gross statutory allocation

Statutory allocation 29,692 23 ,61 8 1 9,1 36 22,27 8 1 7 ,87 5

Excess crude receipts 9,293 5,681 5,844 7 ,480 3 ,567

Refund from Paris club & others 3,367 1 ,07 2 29 7 ,432 -

42,352 30,37 1 25,009 37 ,1 90 21 ,442

7 Recurrent revenue

Taxes 2,090 1 ,291 2 ,947 885 686

Fines and fees 699 98 57 51 31

Licenses 1 0 8 1 1 1 7 9

Earnings and sales 2,094 1 ,1 1 6 1 ,27 8 1 ,038 1 ,343

Rent on gov ernment property 30 1 7 8 3

Interest and repay ments 2 21 232 399 44

Ministry of finance & economic dev elopment - - 1 ,01 6 1 ,931 651

Div idend income 1 5 - 7 7 1 4

Below the line receipts 2,604 2 ,486 3 ,024 2 ,87 6 1 ,848

Miscellaneous 2,603 3 ,1 40 - - -

1 0,1 47 8,1 61 8,57 9 7 ,21 2 4 ,629

8 Recurrent expenditure

Personnel cost 9,051 7 ,468 7 ,1 67 5,923 4 ,604

Pension and gratuities 1 ,31 4 1 ,094 1 ,066 1 ,022 81 0

Statutory office holder salaries 1 58 1 90 1 81 1 52 1 7 5

Ov erhead running costs 1 8,943 1 4,399 1 1 ,553 1 1 ,7 1 7 8,539

29,466 23 ,1 51 1 9,967 1 8,81 4 1 4,1 28

9 Public debt charges

Commercial and other bank loans 4,426 3 ,242 2 ,243 1 39 3 ,420

Stale v oucher & liabilities 2 1 3 27 9

Repay ment of external loans 1 97 595 1 24 1 91 1 1 1

Contribution to local gov ernment pension board 59 59 7 2 7 9 7 9

1 0% of internally generated rev enue to local gov ernment 350 1 1 9 88 1 1 8 82

5,034 4 ,01 6 2 ,530 554 3 ,7 01

10 Miscellaneous expenses

Below the line pay ments 2,604 3 ,1 07 2 ,7 85 3 ,01 0 1 ,91 5

Special imprest - - - 7 1 8 484

2 ,604 3 ,1 07 2 ,7 85 3 ,7 28 2 ,399

56


NOTES TO THE FINANCIAL INFORMATION

11 Loans (external and internal)

The loans owed by the State as at 31 December 201 1 are detailed below:

Description of facility Currency

Balance

N'million

Adv ance NGN 654

Term loan NGN 524

Term loan NGN 54

Rev olv ing term loan NGN 500

Term loan NGN 4,07 4

Term loan NGN 1 42

National fadama 2 SDR 4

Health sy stem dev elopment SDR 3

HIV/AIDS SDR 2

Malaria control SDR 4

3rd National fadama SDR 2

Health sy stem dev elopment SDR 2

12 Contingent Liabilities


13 Summary of adjustments N'million N'million N'million N'million N'million

(1)

Inv estments 1 3 (807 ) (1 ,1 24) (9) 896

Consolidated rev enue fund 1 3 (807 ) (1 ,1 24) (9) 896

(2)

Liabilities ov er assets (8,593) (6,31 6) (2,51 3) (1 ,239) (1 ,060)

Consolidated rev enue fund (8,593) (6,31 6) (2,51 3) (1 ,239) (1 ,060)

International Monetary Fund





Lender

Sky e Bank Plc

United Bank for Africa Plc

Diamond Bank Plc

Access Bank Plc

Unity Bank Plc

Union Bank Plc

Being differences noted between balances per financial

statements and total per detailed records

Being losses on dimunition in assets v alues prev iously carried

on balance sheets

The Gombe State Gov ernment in its ordinary course of business is inv olv ed in 6 cases pending in the Courts. The claims against Gombe State

hav e an estimated monetary v alue of N2.84 billion

According to the Attorney General of Gombe State, the State has good defence to these pending legal actions and no significant liability will

arise therefrom.


BOND RATING (EXTRACTED FROM THE RATING REPORT)

57

BOND RATING (EXTRACTED FROM THE RATING REPORT)

58

EXTRACT FROM THE PROGRAMME TRUST DEED

59

1. PURPOSE AND APPLICATION OF PROCEEDS

The proceeds of the Bonds (after deduction of statutory fees) shall be applied towards the purpose specified in the applicable Supplemental Trust Deed and Pricing Supplement.

2. AMOUNT AND ISSUE OF THE BONDS 2.1 The Issuer has been authorised to issue Bonds from time to time in Series in an aggregate amount from

time to time outstanding not exceeding the sum of N30,000,000,000.00 (Thirty Billion Naira) by way of public offer, book building, private placement or any other method selected by the Issuer and approved by the Commission.

2.2 The Bonds will have such maturities as may be determined by the Issuer subject to a maximum of [7

(seven) years] and such other minimum or maximum maturities as may be permitted from time to time by the Enabling Law.

2.3 The Issuer shall be at liberty from time to time (but subject always to the provisions of this Deed) to create

and issue further Bonds without the consent of the Bondholders PROVIDED that such bonds together with any other outstanding loans of the Issuer shall not at any time exceed 50% of the actual revenue of the Issuer for the preceding year.

3. CONSTITUTION AND FORM OF THE BONDS 3.1 The Issuer may issue Bonds from time to time in one or more Series to the extent permitted by the

provisions of the Enabling Law and the terms of this Trust Deed. 3.2 The Bonds shall be in registered form and each Series of Bonds shall bear the terms of the Bonds specified

in the relevant Supplemental Trust Deed. 3.3 Every Bondholder shall within 2 (two) months of the allotment of its holdings be entitled to receive a

Certificate issued by the Registrar in respect of the aggregate principal amount of such Bondholder’s beneficial interest in the Bonds.

3.4 Notwithstanding the provisions of Clause 4.3, a Bondholder shall be entitled to elect to receive the Bonds

in dematerialised (uncertificated or book-entry) form. The Bonds issued to such a Bondholder shall be credited into the CSCS Account of the Bondholder.

3.5 Any Bondholder that makes an election to receive the Bonds in dematerialised (uncertificated or book-

entry) form shall receive an E-Allotment Notification Letter in respect of the number of Bonds credited into the CSCS Account of the Bondholder. The requirement to issue a Certificate in respect of Bonds credited into the CSCS Account of a Bondholder pursuant to Clause 4.3 shall be deemed to have been satisfied by the issuance of the E-Allotment Letter.

4. ESTABLISHMENT OF SINKING FUNDS 4.1 Pursuant to the provisions of the Enabling Law, the ISA and the SEC Rules, a Sinking Fund shall be

established for the accumulation of monies and reserves for the fulfillment of the obligations of the Issuer in respect of each Series of the Bonds.


60

4.2 The Sinking Funds shall be administered by the Trustees in respect of the Bonds. The amounts standing to the credit of the Sinking Funds from time to time shall be applied to meet the obligations of the Issuer in respect of:

(a) Trustees’ fees and expenses; (b) Coupon payments; and (c) Repayment or redemption of the Principal Amount on the Coupon Payment Dates and Maturity

Date. 4.3 The amount in each of the Sinking Funds shall be pledged to the Trustees for the benefit of the

Bondholders for the applicable Series of Bonds. 4.4 The Issuer irrevocably instructs and authorises the Trustees to withdraw any sums standing to the credit of

any of the Sinking Funds for the purpose of making payment of the Principal Amount, Coupon, premium (if any) and other payments due with respect to the applicable Series of Bonds.

4.5 Where there is any shortfall in the amount paid into the Sinking Fund, the Trustees shall notify the Issuer

and the Issuer shall be obliged within 21 (twenty one) days of receiving such notice to cause the amount of such shortfall to be paid into the Sinking Fund.

5. REDEMPTION 5.1 The relevant Supplemental Trust Deed may indicate either that the relevant Bonds cannot be redeemed

prior to their stated maturity or that such Bonds will be so redeemed at the option of the Issuer or the Bondholders. The terms of any such redemption including any notice periods, any relevant conditions to be satisfied and the relevant redemption dates will be as specified in the Supplemental Trust Deed.

5.2 The terms of the payment of Coupon in respect of any Series of the Bonds shall be as specified by the

terms of the applicable Supplemental Trust Deed. 6. OBLIGATIONS OF THE ISSUER

The Issuer hereby covenants with the Trustees and undertakes that as long as any of the Bonds remain outstanding that at all times during the continuance of these presents (except as may otherwise be agreed in writing by the Trustees):

6.1 It shall not without the express written consent of the Trustees and the SEC, create or permit to subsist, or

agree or purport to permit to subsist any encumbrances on the Sinking Funds established in respect of any series of Bonds which are outstanding, whether ranking in priority or pari-passu with or after the interest of the Bondholders.

6.2 It will ensure that the Pledged Revenues shall be appropriated in accordance with the provisions of the

Enabling Law, and promptly cause to be paid into the Sinking Funds, the Principal Amount, Coupon, premium (if any) and other payments due in respect of each Series of the Bonds issued at the place, on the dates and in the manner provided in this Deed and the Supplemental Trust Deed.

6.3 By way of continuing security in favour of the Trustees (on behalf of the Bondholders) for the payment of

the Principal Amount, Coupon, premium (if any) and other payments due with respect to the Bonds, the Issuer hereby charges by way of a first fixed charge the Pledged Revenues. Such charge shall be valid and


61

binding from the date hereof and all Pledged Revenues shall immediately be subject to the security created hereunder wherever situate.

6.4 Save for the security interest created herein, it will not create any charge, pledge, lien or other encumbrance

upon, or permit any charge, pledge, lien or other encumbrance to be created on the Pledged Revenues. 6.5 It will direct the Accountant-General of the State to issue on behalf of the State (for each Series), an ISPO

authorising the Accountant-General of the Federation to deduct from the statutory allocations accruing to the State from the Federation Account such amounts as are specified by the Trustees as required to be paid into the applicable Sinking Fund and directing same to be paid into such Sinking Fund for the purpose of further securing the fulfilment of the Issuer’s repayment obligations with respect to the Bonds.

6.6 So long as any of the Bonds are outstanding, it shall not without the prior written consent of the Trustees

secure any present or future indebtedness on, (or which is to be deducted from) the Issuer’s share of any statutory allocation from the Federation Account by way of any irrevocable standing payment order ranking pari passu or in priority to the ISPO.

7. EVENTS OF DEFAULT Each of the following events is hereby declared an “Event of Default” with respect to any Series of the

Bonds: (a) Non-payment of Principal Amount

The failure of the Issuer to make any repayment of the Principal Amount as and when it becomes due, and at the place at and in the currency in which such payment is expressed to be payable and such failure is continued uncured, unremedied or not waived for a period of 5 (five) Business Days after such payment becomes due.

(b) Non-payment of Coupon

The failure of the Issuer to make any payment of the Coupon due under the Bonds as and when it becomes due and at the place at and in the currency in which such payment is expressed to be payable and such failure is continued uncured, unremedied or not waived for a period of 5 (five) Business Days after such payment becomes due.

(c) Cross-Acceleration

Any debt (other than the Bonds) of the Issuer becomes due and payable prior to the stated maturity thereof as a result of the occurrence of a default and such acceleration is not rescinded or annulled within 10 (ten) Business Days.

(d) Breach of Undertakings

Other than as provided in any other Event of Default, the Issuer shall fail to observe or perform in any material respect any obligation to be observed or performed by it under this Trust Deed and such obligation if capable of being remedied continues unremedied for 20 (twenty) Business Days from the occurrence of such breach. PROVIDED however, that if the breach of covenant or agreement is one which cannot be completely remedied within the 20 (twenty) Business Day period after such occurrence and the


62

Issuer has in the reasonable opinion of the Trustees taken active steps within the period to remedy the failure or is diligently pursuing such remedy, the Trustees may extend the period within which the Issuer is required to remedy by notice in writing to the Issuer.

(e) Termination or Unenforceability of Issue Documents

Any Issue Document ceases to be in full force and effect or is incapable of enforcement in all material respects in accordance with the terms thereof and such circumstances are not capable of being cured or, if capable of being cured, are not cured within a period of 30 (thirty) Business Days from the occurrence thereof.

(f) Material Adverse Change

The occurrence of a Material Adverse Change; and

(g) Other Consents and Approvals

The introduction of, or any change in, any applicable law or regulation or regulatory requirement, or any change in the interpretation or application thereof, that makes it unlawful or prohibited for the Issuer to maintain or give effect to any of its obligations as contemplated by this Deed.

8. PROVISIONS FOR MEETINGS OF THE BONDHOLDERS

(a) Who may Convene Meetings

The Trustees or the Issuer respectively may at any time at their discretion convene a meeting of Bondholders. The Trustees shall upon the request in writing of the holders of not less than a majority of the Bonds for the time being outstanding (upon being indemnified to its satisfaction against all costs and expenses to be incurred) convene a meeting of Bondholders. Such meeting shall be held at such place as the Trustees shall determine or approve. Holders of at least 10% (ten per cent) of the nominal amount of the Bonds for the time being outstanding shall be entitled to convene a meeting at which a resolution to compel the Trustees to take steps against the Issuer will be passed upon the occurrence of an Event of Default.

(b) Notice of Meetings

At least 21 (twenty-one) days’ notice (exclusive of the day on which the notice is served or deemed to be served and of the day for which it is given) of every such meeting specifying the place and day and hour of meeting and stating the resolutions to be proposed shall be given to the Bondholders and (in the case of a meeting convened by the Issuer) to the Trustees. A meeting shall notwithstanding that it is called by a shorter notice than that specified in this paragraph, be deemed to have been duly called if it is so agreed by not less than 75% (seventy five per cent) of all the Bondholders entitled to attend and vote thereat.

(c) Contents and Manner of Notice

Every notice of a meeting shall specify the place, day and hour of the meeting and shall contain a statement of the business to be transacted and the terms of every resolution to be proposed thereat.


63

Notice of a meeting shall be given to every Bondholder (or in the event of the death, insolvency, winding up or dissolution of the Bondholder, to the person entitled to the Bonds at the address provided by such person for such purpose), the Registrar, the Trustees (where the meeting is convened by the Issuer) and the Commissioner. The accidental omission to give any such notice to or the non-receipt of any such notice by any of the Bondholders shall not invalidate the proceedings at any such meeting.

(d) Chairman

Any of the Trustees or some other person nominated by the Trustees shall be entitled to take the chair at every meeting and if no such nomination is made or if at any meeting the person nominated shall not be present within 30 (thirty) minutes after the time appointed for holding the meeting the Bondholders present shall (on a show of hands) choose one of their number to be Chairman. If a poll is demanded on the election of the Chairman, it shall be taken forthwith and the Chairman elected on a show of hands shall exercise all the powers of the Chairman until the result of such poll is declared. If some other person is elected Chairman as a result of the poll, he shall be the Chairman for the remainder of the meeting.

(e) Persons Entitled to Attend Meetings

The Trustees and their solicitors and any director or officer of a corporation being Trustees hereof and any director and the secretary, solicitors and Auditors of the Issuer and any other person authorized in that behalf by either of the Trustees or the Issuer may attend any meeting.

(f) Quorum

At any such meeting, two persons holding or representing by proxy 51% (fifty one per cent) in value of the Bonds for the time being outstanding shall form a quorum for the transaction of business and no business shall be transacted at any meeting unless the requisite quorum is present when the meeting proceeds to business.

(g) Absence of Quorum

If within an hour from the time appointed for any meeting of the Bondholders a quorum is not present the meeting shall if convened upon the requisition of the Bondholders be dissolved. In any other case it shall stand adjourned to such day, time and place being not less than 7 (seven) days thereafter as may be appointed by the Chairman and at such adjourned meeting the Bondholders present in person or by proxy and entitled to vote whatever the value of the Bond held by them) shall form a quorum and shall have power to pass any resolution and to decide upon all matters which could properly have been disposed of at the meeting from which the adjournment took place had there been a quorum.

(h) Notice of Adjournment

At least 7 (seven) days’ notice of any adjourned meeting of Bondholders at which a Special Resolution is to be submitted shall be given in the same manner (mutatis mutandis) as for an original meeting but it shall not be necessary to specify in such notice the business to be transacted


64

at the adjourned meeting and such notice shall state that the Bondholders present at the adjourned meeting whatever the amount of Bond held by them will form a quorum.

(i) Adjournment

The Chairman may subject as aforesaid with the consent of (and shall if directed by) any such meeting at which a quorum is present adjourn the same from time to time and from place to place but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting from which the adjournment took place.

(j) Method of Voting

Every question submitted to a meeting of Bondholders shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded as hereinafter mentioned and in case of any equality of votes the Chairman shall vote on a show of hands and on a poll have a casting vote in addition to the vote or votes (if any) to which he may be entitled as or on behalf of a Bondholder.

(k) Evidence of Passing of Resolutions

At any meeting of Bondholders unless a poll is demanded by the Chairman or by a Bondholder or Bondholders present in person or by proxy and holding or representing in the aggregate not less than one-tenth of the Bonds then outstanding a declaration by the Chairman that a resolution has been carried or carried by any particular majority or lost or not entitled by any particular majority shall be conclusive evidence of the fact without proof of the number or proportion of votes recorded in favour of or against such resolution.

(l) Demand for Poll

If at any such meeting a poll is so demanded it shall be taken in such manner and at such time (not more than 30 (thirty) days after the date of the meeting) as the Chairman may direct and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded but any poll demanded at any such meeting on the election of a Chairman or any question of adjournment shall be taken at the meeting without adjournment. No notice need be given of a poll not taken immediately and any business other than that upon which a poll is demanded may be proceeded with pending the taking of the poll.

(m) Proxies

The registered holder of any of the Bonds or in case of joint holders any one of them shall be entitled to vote in respect thereof either in person or by proxy and in the latter case as if such joint holder were solely entitled to such Bond. If more than one of such joint holders be present at any meeting either personally or by proxy that one of the joint holders so present whose name stands first in the register as one of the holders in respect of such Bond shall alone be entitled to vote in respect thereof in person or by proxy.

(n) Form of Proxy

i) A Bondholder may appoint any person (who needs not be a Bondholder) as his proxy to vote for him at any meeting. Every instrument appointing a proxy must be in writing under the hand of the appointor or his attorney duly authorised in writing or in the case of a


65

corporation either under its common seal or under the hand of an officer or of an attorney duly authorized in writing and must be in the usual common form or in such other form as the Trustees may prescribe or accept. A proxy unless the contrary is stated thereon will be valid as well for any adjournment of the meeting as for the meeting to which it relates and need not be witnessed.

ii) In every notice calling a meeting of the Bondholders there shall appear with reasonable

prominence a statement that a Bondholder entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of him and that a proxy need not be a Bondholder.

(o) Deposit of Proxy

The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed or a notarially certified or office copy of such power or authority shall be deposited at such place as may be specified in the notice convening the meeting or in some document accompanying the same or if no place is so specified then at the registered office of the Issuer not less than 48 (forty-eight) hours before the time appointed for holding the meeting or adjourned meeting (or in case of a poll before the time appointed for the taking of the poll) at which the person named in such instrument proposes to vote and in default the instrument of proxy shall not be treated as valid. No instrument appointing a proxy shall be valid after the expiration of twelve months from the date named in it as the date of its execution. An instrument appointing a proxy shall be deemed to confer authority to demand or to join in a demand for a poll.

(p) Revocation of Proxy

A vote given in accordance with the terms of an instrument appointing a proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the instrument of proxy or of the authority under which the instrument of proxy was executed unless previous intimation in writing of such death insanity or revocation shall have been received by the Issuer at its registered office before the commencement of the meeting or the adjourned meeting at which the proxy is used.

(q) Votes

On a show of hands every Bondholder who (being an individual) is present in person or (being a company) is present by a representative not being himself a Bondholder shall have one vote and on a poll every Bondholder present in person or by proxy shall have one vote for every N1, 000.00 (One Thousand Naira) of the Bonds of which he is the holder. On a poll a Bondholder entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way.

(r) Representative of Corporate Bondholders

Any company which is a Bondholder may by writing under the hand of a duly authorised officer authorise such person as it think fit to act as its representative at any meeting of the Bondholders and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Bondholder.

STATUTORY AND GENERAL INFORMATION

66

INDEBTEDNESS

The State’s indebtedness as at December 31st 2011 is N9,811,295,357.64 (June 30, 2012: N7,383,179,708.84).and is composed as follows:

S/N TYPE AS AT DECEMBER 31, 2011 AS AT JUNE 30, 2012

=N= =N=

1 Internal Loans 5,946,304,183.81 3,572,562,636.19

2 External Loans 3,864,991,173.83 3,810,617,072.65

TOTAL 9,811,295,357.64 7,383,179,708.84

Purpose of the Programme The proceeds of the Bonds (after deduction of statutory fees) shall be applied towards the purpose specified in the applicable Supplemental Trust Deed and Pricing Supplement. Authorization and Legal Framework The Bond Programme is authorized by the State Government’s gazette dated August 12, 2011 confirming the instrument authorising the Programme. Claims and Litigation The State is currently involved in 6 cases ranging from claims for consultancy services and professional fees to damages. All 6 cases were instituted against the State. A review of these cases was conducted with a view to confirming their status and ascertaining the “Contingent Liability” of the State. The total amount claimed in the cases instituted against the State is estimated at N2, 838,045,028.63. In addition to the above, the State may also have a liability to pay interest, which will be calculated from the dates on which the suits are determined to the date the amounts are fully liquidated. However, the eventual liability of the State will be determined by the courts. The Solicitors to the Issue and the Attorney General of the State are of the opinion that the claims against the State will not have any material adverse effect on the State and/or the Bond Issue and are not aware of any pending and/or threatened claims or litigation involving the State other than those disclosed above. Material Contracts

The following agreements have been entered into and are considered material to this Offer: (i) Vending Agreement dated September 28, 2012 under the terms of which the Issuing Houses have agreed to

offer for subscription the Gombe State Bond. (ii) Programme Trust Deed September 28, 2012 between Gombe State Government, and the Trustees. (iii) 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.


67

Bond Rating

The rating agencies, Agusto &Co. Ltd and Global Credit Rating Co. Ltd have assigned the following rating:

Issuer Rating BBB by Global Credit Rating Co. Limited (“GCR”) Bb by Agusto & Co. Limited (“Agusto”)

Bond Rating A- by Global Credit Rating Co. Limited (“GCR”) A by Agusto & Co. Limited (“Agusto”)

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 Gombe State S/N Name Responsibility 1. His Excellency, Alhaji Ibrahim Hassan Dankwambo Executive Governor 2. His Excellency, Tha’Anda Jason Rubainu Deputy Governor 3. Abubakar Sulei Bage Secretary to the State Government 4. Mr. Hassan Muhammadu Commissioner for Finance 5. Mr. Abdul-Hameed Ibrahim Commissioner for Justice and Attorney General 6. Mr. Ahmad Abubakar Walama Commissioner for Local Govt. and Community

Development 7. Mr. Mijinyawa Sani Labaran Commissioner for Youth and Empowerment 8. Dr. Ishaya Kennedy Commissioner for Health 9. Alhaji Jalo Abubakar Commissioner for Special Duties 10. Dr. Hamza Sule Wuro Bokki (FCPIN) Commissioner for Trade and Industry 11. Dr. Hassan A. Haruna Commissioner for Cooperative and Rural

Development 12. Mrs. Aishatu M.B Ahmad Commissioner for Education 13. Mr. Dahiru Buba Biri Commissioner for Agriculture 14. Mr. Mohammed Danladi Commissioner for Economic Development 15. Mr. Bulus Samuel Adamu Commissioner for Culture and Tourism 16. Mr. Muhammed Isa Abdullahi Commissioner for Higher Education 17. Mrs. Fatima Abubakar Commissioner for Women Affairs 18. Mr. Habu Dawaki (Rev) Commissioner for Information 19. Mr. Ahmad Shehu Hadi Commissioner for Works 20. Mr. Babagoro Abdulkadir Yahaya Commissioner for Science and Technology 21. Mr. Idris Muhammad Mahdi Commissioner for Water Resources Town

Planning 22. Hon. Dr. Rabenson Z. Wasa (JP) Commissioner for Housing and Transport


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Other Transaction Parties

Auditors Gombe State Auditor General

Accountant Gombe State Accountant General

Issuing Houses Access Bank Plc, BGL Plc, Greenwich Trust Limited, GTB Asset Management Limited, Finmal Finance Services Limited, UBA Capital Limited

Reporting Accountants PriceWaterHouse Coopers

Solicitor to the Issuer: Gombe State Attorney General & Commissioner for Justice

Solicitors to the Issue: Tokunbo Orimobi & Co., Akanbi & Wigwe

Solicitors to the Trustees: Aluko & Oyebode

Trustees to the Issue ARM Trustees Limited and UBA Trustees Limited and ALM Consulting Limited

Stockbrokers to Issue Marina Securities Limited, Camry Securities Limited, Finmal Finance Services Limited, Gombe Securities Limited, Security Swaps Limited

Rating Agencies Agusto & Co Limited, Global Credit Rating

Registrars to the Issue United Securities Limited

Receiving Bank Access Bank Plc


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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 Gombe State Executive Council dated January 25, 2012 authorizing the

Programme; (c) The State Government’s gazettes (for the Principal Law and Amendment) dated August 12, 2011 and 16 June

2012 respectively confirming the instrument authorising the Programme; (d) The House of Assembly Resolution dated January 26, 2012 authorizing the Programme; (e) Letter dated January 27, 2012, from the Federal Ministry of Finance, approving the Irrevocable Standing

Payment Order (with respect to the series being issued) by Gombe State to the Accountant-General of the Federation, authorizing a monthly deduction of N381,149,795.00 directly from the State’s statutory allocation to service the principal and interest obligations on the series 1;

(f) Letter from the Securities and Exchange dated September 26, 2012 approving the registration of the Shelf Prospectus and the Programme;

(g) The Programme Trust Deed dated September 28, 2012 between the Gombe State Government on one part and the Trustees on the other part;

(h) The Supplemental Trust Deed dated September 28, 2012 for series 1; (i) The Audited Financial Statements of Gombe State for each of the five years ended 31st December 2007, 2008,

2009, 2010, and 2011; (j) The Report by PWC on the audited Financial Statements of Gombe State for the five years ended 31st

December 2007, 2008, 2009, 2010, and 2011; (k) The Report of the Solicitors on Claims and Litigation; (l) The Rating Reports of Agusto & Co and GCR, the Rating Agencies; (m) The Material Contracts referred to on page 65 of the Shelf Prospectus 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;

FORM OF PRICING SUPPLEMENT

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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 [ ] GOMBE STATE GOVERNEMNT Issue of (20,000,000,000.00) Naira –denominated Fixed Rate Bonds Under the N30, 000,000,000 Debt Issuance Programme. Issue Price: N1,000 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 xx 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.


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FINAL TERMS OF SERIES [ ] BONDS 1. Issuer Gombe State Government (“GOSG”) 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: 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 [ ]


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- 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: [ ]

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


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APPENDICES 35. Appendices [List and Attach Appendices if applicable]

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