offer for subscription - fmdq group...benue state government of nigeria offer for subscription...

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 PAGES 34 - 36 HEREOF.

BENUE STATE GOVERNMENT OF NIGERIA

Offer for Subscription

N4,950,000,000 16.50% FIXED RATE 7 YEAR BOND ISSUE 2015/2022

Issue Price: N1,000.00 per unit

Payable in full on Application

Application List Opens: 27th February, 2015

Application List Closes: 27th February, 2015

This offering of 7 years 16.5% Fixed Rate Bonds (the “Issue”) is being made through a 100% Underwriting Process

wherein 100% of the Issue shall be offered to Qualified Institutional Investors (“QIIs”) and High Net worth Individuals

(“HNIs”) as defined under Rule 321 of the Rules and Regulations of the Securities & Exchange Commission (“the

Commission” or the SEC”).

This 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 Prospectus shall not be taken to indicate that the Securities & Exchange Commission

endorses or recommends the debt securities or assumes responsibility for the correctness of any statements made

or opinions or reports expressed herein.

Lead Issuing House/Underwriter Joint Issuing House/Underwriter

RC: 444999

RC: 446599

This P rospectus is dated 27 t h , February 2015

TABLE OF CONTENTS

Benue State Government Bond Prospectus

2

1 ABRIDGED TIMETABLE ..................................................................................................................................... 3

2 DEFINITION OF TERMS AND ABBREVIATIONS ................................................................................................ 4

3 INFORMATION RELATED TO THIS PROSPECTUS ............................................................................................. 7

4 PARTIES TO THE TRANSACTION ...................................................................................................................... 8

5 DECLARATION BY THE ISSUER ...................................................................................................................... 11

6 THE BOND ISSUE ............................................................................................................................................ 12

7 TERMS AND CONDITIONS OF THE BOND ISSUE .......................................................................................... 13

8 SUMMARY OF THE BOND ISSUE.................................................................................................................... 17

9 OVERVIEW OF THE NIGERIAN ECONOMY .................................................................................................. 20

10 PROFILE OF BENUE STATE ............................................................................................................................. 22

11 RISK FACTORS AND MITIGANTS .................................................................................................................. 34

11.1 COUNTRY RISKS ........................................................................................................................................... 34

11.2 MACROECONOMIC RISKS ............................................................................................................................ 34

11.3 POLITICAL RISKS AT THE STATE LEVEL .............................................................................................................. 35

11.4 RISKS RELATING TO THE BONDS ..................................................................................................................... 36

11.5 STRUCTURAL RISKS ........................................................................................................................................ 36

12 HISTORICAL FINANCIAL INFORMATION OF BENUE STATE ......................................................................... 38

12.1 REPORTING ACCOUNTANT REPORT ............................................................................................................... 38

12.2 STATEMENT OF ASSETS AND LIABILITIES ............................................................................................................ 40

12.3 STATEMENT OF CONSOLIDATED REVENUE FUND ............................................................................................. 41

12.4 STATEMENT OF CAPITAL DEVELOPMENT FUND ................................................................................................ 42

12.5 STATEMENT OF CASH FLOWS ......................................................................................................................... 43

12.6 NOTES TO THE ACCOUNT .............................................................................................................................. 44

13 USE OF PROCEEDS ........................................................................................................................................ 57

13.1 OVERVIEW ................................................................................................................................................... 57

13.2 PROJECT DESCRIPTION ................................................................................................................................. 57

14 OTHER GENERAL INFORMATION ................................................................................................................. 59

14.1 STATEMENT OF INDEBTEDNESS ........................................................................................................................ 59

14.2 STATEMENT OF CLAIMS, LITIGATIONS AND DISPUTES ........................................................................................ 59

14.3 COSTS & EXPENSES ...................................................................................................................................... 59

14.4 RELATIONSHIP BETWEEN THE STATE & ADVISERS............................................................................................... 59

14.5 OFFICIAL LISTING ON STOCK EXCHANGES ..................................................................................................... 59

14.6 CLEARING SYSTEM ....................................................................................................................................... 59

14.7 EXTRACT FROM THE BOND LAW..................................................................................................................... 60

14.8 EXTRACTS FROM THE TRUST DEED ................................................................................................................... 62

14.9 EXTRACT OF THE RATING REPORT FOR THE ISSUER & ISSUE ................................................................................ 63

14.10 CONSENTS ................................................................................................................................................... 65

14.11 DOCUMENTS AVAILABLE FOR INSPECTION ..................................................................................................... 66

14.12 SINKING FUND SCHEDULE ............................................................................................................................. 66

14.13 BOND AMORTIZATION SCHEDULE .................................................................................................................. 68

15 PROCEDURE FOR APPLICATION AND ALLOTMENT .................................................................................... 69

1. ABRIDGED TIMETABLE


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1 Abridged Timetable

Date Activity Responsibility

16-Feb-15 Receive SEC approval of Prospectus and clearance for Signing

Ceremony Issuing Houses

27-Feb-15 Hold /Signing Ceremony Issuing Houses / BESG

27-Feb-15 Application List Open and Closes All Parties

02-Mar-15 Disburse underwritten Amount to BESG Issuing Houses

02-Mar-15 File Executed documents with SEC Issuing Houses

02-Mar-15 File Allotment Proposal and draft newspaper announcement to

SEC Receiving Bank

9-Mar-15 Receive SEC clearance of Allotment Proposal Issuing Houses

12-Mar-15 Publish Allotment Announcement in at least two (2) national

dailies Stockbrokers

16-Mar-15 Distribute Certificates/Credit CSCS Accounts Registrars

16-Mar-15 Forward Declaration of Compliance to The Exchange Registrars

30-Mar-15 Listing of the Bonds Stockbrokers

6-Apr-15 Post Offer Compliance/Submission of Summary report to the

SEC Issuing Houses

2. DEFINITION OF TERMS AND ABBREVIATIONS


4

2 Definition of Terms and Abbreviations

“AGF” The Accountant General of the Federation or any public officer for the

time being in charge of the Federation Account in accordance with the

Constitution of the Federal Republic of Nigeria

“Allotment Date” Date on which the allotment of the Bonds is approved/cleared by the SEC

“Auditor” The Auditor General of Benue State Government of Nigeria

“BESG” Benue State Government of Nigeria and the Issuer of the Bonds

“Bidder” Any Qualified Investor who makes a Bid pursuant to the terms of a

Prospectus

“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

“Bonds Law” The Benue State Bonds Law, 2009

“Business Day” Monday to Friday, other than weekends and public holidays

“CAC” The Corporate Affairs Commission

“CAMA” Companies and Allied Matters Act Cap C20, LFN, 2004

“CBN” The Central Bank of Nigeria

“CITA” Company Income Tax Act Cap C21, LFN 2004.

“Coupon” The interest paid on the Bond semi-annually, expressed as a percentage of

the face value of the Bond

“Coupon Payment Date” The date on which the Coupon on the Bond is paid to the bondholders, as

specified in the Prospectus

“Coupon Rate” Interest rate stated on a bond when it is issued

“CSCS” Central Securities Clearing System Plc

“Certificates”

“Dealers”

In relation to the Bonds, a certificate in or substantially in the form specified

in the First Schedule to the Trust Deed and with respect to any Additional

Bonds, a Certificate in or substantially in the form specified in a Trust Deed

to the particular Securities being issued or in such other form as may be

agreed from time to time by the Trustee

The financial institution(s) appointed by the State from time to time to

exclusively purchase or underwrite and trade in the Bonds

“Daily Official List” The official publication of The Nigerian Stock Exchange which appears

daily, detailing price movements and information for all securities quoted

on the Exchange

“DMO” The Debt Management Office of the Federal Government of Nigeria

“EXCO” The Executive Council of the Benue State Government of Nigeria

“FAAC” Federation Account Allocation Committee

“FBN Capital” FBN Capital Limited

“FGN” Federal Government of Nigeria

“FIRS” Federal Inland Revenue Service

“FMDQ-OTC” Financial Markets Dealer Quotation – Over The Counter

“GDP” Gross Domestic Product

“IGR” Internally Generated Revenue

“Interest Commencement Date” Coupon shall accrue from the Allotment Date



5

“Investors” The registered holder(s) for the time being of any Securities issued

hereunder

“ISA” Investments & Securities Act No 29 of 2007

“Issue Date” The date on which the Bond is issued and allotted, as specified in the

Prospectus

“Issuer” or “State” or “BESG” Benue State Government of Nigeria

“ISPO” The Irrevocable Standing Payment Order dated January 22nd, 2015 issued

by the Office of the State Accountant General on behalf of the State to

the Accountant General of the Federation for the periodic deduction of

monies as a first line charge from the State’s statutory allocation from the

Federation Account and payment thereof into a Sinking Fund held by the

Trustee by way of security for the Bond; and any subsequent ISPO issued

with respect to future Bond Issues

“Issuing Houses/Underwriters” Lead and Joint Issuing Houses

“Joint Issuing House/ Underwriter” FBN Capital Limited

“Lead Issuing House/ Underwriter” United Capital Plc

“LFN” Laws of the Federation of Nigeria

“Maturity Date” The date as specified in Prospectus on which the Principal Amount is due.

“Naira” , “NGN” or “N” The Nigerian Naira

“NBS” National Bureau of Statistics

“NSE” The Nigerian Stock Exchange

“Offer Documents” This Prospectus, 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 BESG Bonds in the

aggregate principal amount on the terms and conditions set out in this

Prospectus

“Payment Date” Either the Maturity date or the Coupon payment date;

“PENCOM” National Pension Commission

“Pension Act” Pension Reform Act Cap P4, LFN 2004

“PFAs” Pension Fund Administrators

Principal Amount Outstanding Any day in relation to the Bond issued, the principal amount of that Bond

on issue less the aggregate of all principal payments that have become

due and payable in respect of that Bond and have been paid on or prior

to that day

“Projects” The projects that would be described in the Prospectus to which the

proceeds of the bond issuance will be applied

“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 and conditions of the Bonds

“Receiving Bank” UBA Plc

“Record Date” Period of 21 (twenty-one) days immediately preceding each Payment

Date during which the Register will be closed

“Red Herring Prospectus” An indicative prospectus filed with the S.E.C outlining details of the

proposed Offer



6

“Redemption Amount” The Aggregate principal amount outstanding in respect of the Bond on the

Maturity Date as specified in the Prospectus

“Register” The register kept by the Registrar containing the names, particulars and

Securities held for the time being by each Investor

“Revenue” Monies to be credited to 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

“Senior ranking obligation” Obligation ranked higher than any other obligation

“SEC” or “The Commission” The Securities and Exchange Commission established under the

Investments and Securities Act 2007

“Settlement Date” The date by which an allottee must pay for the Bonds following an

allocation of Bonds; which in the case of a Book Build will be the same

date as the Completion Meeting

“Sinking Fund” The fund established pursuant to the provisions of Section 251 of the ISA

and Section 1 of the Law to be administered by the Trustee on behalf of

the Bondholders, for the purpose of effecting payment of coupon and

principal obligations on the Bond issue

“The Bonds” The N4,950,000,000 16.50% Fixed Rate Development Bonds due 2022 issued

under the terms and conditions of this Prospectus

“The Constitution” The Constitution of the Federal republic of Nigeria 1999

“Trustees” FBN Trustees Limited, Skye Trustees Limited and United Capital Trustees

Limited for the time being appointed under the Trust Deeds or in

replacement of any existing trustee

“Trustees Act” Trustees Investment Act Cap T22, LFN 2004

“Trust Deed” The Trust Deed between the Issuer and the Trustees dated on 27-02-2015

“Underwriter” Means the agreement made between the Issuer and the Underwriters, to

fully underwrite the Bonds on a firm basis

“United Capital” United Capital Plc

“VAT” Value Added Tax

“Vending Agreement” The agreement made between the Issuer and the Issuing Houses on the

Bond Issue, stating the terms and conditions within which the Issuing

House(s) execute mandate

3. INFORMATION RELATED TO THIS PROSPECTUS


7

3 Information Related To This Prospectus

Presentation of Information

This Prospectus has been prepared by United Capital and FBN Capital in connection with the up to N4,95 Billion

Debt Issuance by the Benue State Government of Nigeria for the purpose of giving information to prospective

investors in respect of the Instruments and other securities described herein. The SEC has cleared this Prospectus

and registered the Securities listed herein.

The Benue State Government and the members of the Benue State Executive Council individually and

collectively accept full responsibility for the accuracy of the information contained herein and 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 material statement herein misleading or untrue. Additional

information may be obtained through the offices of the Issuing Houses/Book Runners as listed on page 10 of this

Prospectus on any Business Day during the period of the respective opening and closing dates of the issuance of

Instruments under the Debt Issuance, provided the Issuing Houses/Book Runners possess such information or can

acquire it without undue effort or unreasonable expense.

The receipt of this Prospectus or any information contained in it or supplied with it or subsequently communicated

to any person does not constitute investment advice from United Capital and FBN Capital to any prospective

investor. Each prospective investor should make their own independent assessment of the merits or otherwise of

subscribing for the securities offered herein and should take their own professional advice in connection with any

prospective investment by them.

Forward-Looking Statements

This Prospectus includes certain statements, estimates and projections with respect to the future performance of

Benue State Government. These statements, estimates and projections reflect various assumptions by the Benue

State Government concerning its anticipated development programme, which have been included solely for

illustrative purposes. 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 of the Benue State Government and

actual occurrences described to be materially different from any future results, performance or achievements

expressed or implied by such forward-looking statements.

Financial Information

The Benue State Government maintains its books of accounts in Naira in accordance with the generally

accepted accounting principles applicable in Nigeria (“Nigerian GAAP”). The financial information included in

this document comprises the audited financial statements of Benue State Government for the five years ended

December 31, 2013.

Certain statistical information presented in this document on topics such as the Nigerian economy and political

landscape and related subjects have been obtained from third party sources, as described herein. The third

party information is presented in the following sections of this document: “Nigeria Overview”, “Profile of Benue

State” and “Risk Factors”. The Benue State Government has accurately reproduced such information and as far

as the State is aware and is able to ascertain from information published by such third parties, no facts have been

omitted that would render the information inaccurate or misleading. Nevertheless, prospective investors are

advised to consider this data with caution. Prospective investors should note that some of the State’s estimates

are based on such third party information and as such subject to investor verification.

A wide variety of other information concerning the State, including financial information, is available from the

State website – www.benue.gov.ng - and other authorised State publications. Any such information that is

inconsistent with the information set forth in this Prospectus should be disregarded. No such information is a part of

or incorporated into this Prospectus.

Certain figures included in this document have been subject to rounding adjustments. Accordingly, figures shown

for the same category presented in different tables may vary slightly and figures shown as totals in certain tables

may not be an arithmetic aggregation of the figures which precede them.

4. PARTIES TO THE TRANSACTION


8

4 Parties to the Transaction

Issuer: Benue State Government of Nigeria

State Secretariat Complex

Makurdi

Benue State

Nigeria

Representatives Of Benue State

Executive Council

His Excellency, Rt. Hon. Gabriel Torwua Suswan, PhD, CON

Executive Governor and Chairman of Council

Chief Steven Obekpa Lawani, OFR

His Excellency, the Deputy Governor

Dr. David Salifu

Secretary to the State Government

Mr. Terna Ahua

Head of Service

Hon. Omadachi Oklobia

Commissioner for Finance and Budget

Hon. Egbiri Idaah

Commissioner for Youth and Sport

Hon. John Tondu

Commissioner for Land and Survey

Hon. (Sir) John Ngbede

Commissioner for Works and Transport

Hon. (Pharm) Alexander Akpera

Commissioner for Environment and Urban Development

Hon. Dr. Elizabeth Ugo

Commissioner for Education

Hon. Elizabeth Allagh

Commissioner for Women Affairs and Social Development

Hon. Comfort Ajene

Commissioner for Culture and Tourism

Hon. (Dr.) Orduen Abunku

Commissioner for Health and Human Services

Hon. Esther Dzungwe

Commissioner for Water Resources

Hon. Terfa Hindan

Commissioner for Commerce and Industry

Hon. Anumeh Innocent

Commissioner for Housing

Hon. Gbugho Amokaha Donald

Commissioner for Agriculture and Natural Resource

Hon. Anthony Onuh

Commissioner for Science and Technology



9

Hon. Justin Amase

Commissioner for Information and Orientation

Hon. Aondowase Chia

Commissioner for Rural Development & Corporative

Barrister Philip Ierkwagh

Attorney-General and Honourable Commissioner for Justice

Auditor General to BESG

Mr. Linus Akpen

Office of the Auditor General

Makurdi

Benue State

Ag. Accountant General

to the State

Mr. Kpaakpa T. Joseph

Office of the Accountant-General

Makurdi

Benue

Other Parties

Lead Issuing House / Underwriter United Capital Plc

12th Floor, UBA House 57, Marina

Lagos

Joint Issuing House / Underwriter FBN Capital Limited

16, Keffi Street

Ikoyi South-West

Lagos

Trustees

FBN Trustees Limited

16, Keffi Street

Ikoyi South-West

Lagos

Skye Trustees Limited

Skye Bank Building

30, Marina

Lagos

United Capital Trustees Limited

12th Floor, UBA House

57, Marina

Lagos

Registrars Africa Prudential Registrars Plc

220B, Ikorodu Road

Palmgrove

Lagos

Stockbrokers

Elixir Securities Limited

9th Floor, Eleganza Building

Adeyemo Alakija Street

Victoria Island

Lagos

UBA Securities Limited


57, Marina

Lagos

GEM Assets Management Limited

6th Floor Mandilas House

35 Simpson Street

Lagos



10

Stockbrokers

IMTL Securities Limited

Kajola House

62/63, Campbell Street

2nd Floor, Phase II,

Lagos

Solicitor to the Issue Wali-Uwais & Co.

Plot 2669, Aguyi Ironsi Street

Maitama

Abuja

Solicitor to the Trustees Greenfield Chambers

No. 4, Euphrates Street

Maitama

Abuja

Reporting Accountant Akintola Williams Deloitte

235, Ikorodu Road

Ilupeju

Lagos

Rating Agency Agusto & Co. Limited


57, Marina Lagos

Receiving Bank UBA Plc

57, Marina

Lagos

5. DECLARATION BY THE ISSUER


11

5 Declaration by the Issuer

6. THE BOND ISSUE


12

6 The Bond Issue

A copy of this Prospectus and the documents specified herein has been delivered to the Securities & Exchange

Commission (SEC) for clearance and registration.

This Prospectus is being issued in compliance with the provisions of the Investments and Securities Act (ISA) No. 29,

2007, the Rules and Regulations of The Commission and the listing requirements of the Nigerian Stock Exchange

(NSE), FMDQ and contains particulars that are in compliance with the requirements of SEC and the Exchange, for

the purpose of giving information to the public with regards to the N4,950,000,000 16.50% Fixed Rate Bond Issue

due 2022 by the Issuing Houses on behalf of the Benue State Government of Nigeria.

The Issue Price is 100% of the Par Value of the Bonds. The Coupon on the Bonds will be payable semi-annually in

arrears in equal instalments at the rate of 16.50% from the date of allotment of the bond in each year till the

Maturity Date. Payments of Principal of, and Coupon on, the Bonds will be made without withholding or

deductions for, or on account of any State and Federal income and capital gains taxes in the Federal Republic

of Nigeria. An application has been made to the Governing Council of the Exchange for the admission of the

Bonds to the Daily Official List (Bonds) of the Exchange.

The EXCO on behalf of the Benue State Government collectively and individually accepts full responsibility for the

accuracy of the information contained in this Prospectus and have taken reasonable care to ensure that the

facts contained herein are true and accurate in all 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 contained herein misleading or untrue.

LEAD ISSUING HOUSE:

RC: 444999

Joint ISSUING HOUSE:

RC: 446599

on behalf of

BENUE STATE GOVERNMENT OF NIGERIA

Offer for Subscription

N 4,950,000,000 16.50% Fixed Rate 7year Bond Issue

Issue Price: [N 1,000] per unit

Payable in full on Application

Application list Opens: February 27, 2015 Application list Closes: February 27, 2015

7. TERMS AND CONDITIONS OF THE BOND ISSUE


13

7 Terms and Conditions of the Bond Issue

1. Amount of Bonds

The Aggregate principal amount of Bonds issued pursuant hereto is N4,950,000,000 comprising 4,950,000

registered Bonds at N1,000 ( One thousand Naira) per unit.

2. Type of Bonds

Fixed Rate Bonds.

3. Status of Bonds

The Bonds constitute senior and direct obligations of the State. The Bonds are not guaranteed by the Federal

Government of Nigeria. The Bonds qualify as securities in which trustees may invest under the Trustees

Investment Act Cap T22 LFN 2004. The Bonds are also acceptable pledging collateral for accessing CBN

Expanded Discount Window obligations. The Bonds qualify as “Government Securities” within the meaning of

CITA and PITA, for purposes of tax exemption.

4. Minimum Subscription

The minimum subscription amount for the Bonds is 10,000 units or N10,000,000 (Ten Million Naira Only) and

multiples of 1,000 units or N1,000,000 (One Million Naira Only) thereafter.

5. Taxation

The Bonds shall be exempt from all forms of taxation in the Federal Republic of Nigeria. Accordingly, all

payments made to Bondholders shall be free and clear of withholding, or any deductions at source or

otherwise and/or State and Federal income and capital gains or other taxes.

6. Tenor

The period from the Allotment Date to the Maturity, that is, 7 years.

7. Event of Default and Remedies

An event of default (“Event of Default”) shall be triggered if:

I. The Issuer fails to pay any sums representing principal or interest on the Bond or any fees or other

sums due under the Transaction Documents within five (5) Business Days of the due date thereof;

II. an Insolvency Event occurs in respect of the Issuer;

III. the Issuer fails to perform or observe any covenant or agreement required by the Transaction

Documents to which it is a party or any other document delivered in connection with the Bond to be

performed or observed by it without remedy for [twenty (20)] Business Days after the Trustees have

given notice of it to the Issuer requiring the same to be remedied (except where that failure is

incapable of remedy, in which case no notice will be required); and the Trustees have certified that

the failure to perform or observe is materially prejudicial to the interests of the Bondholders; or

IV. any representation or warranty of the Issuer in any Transaction Document to which it is a party or any

other document delivered in connection with the transactions contemplated thereunder proves to

have been materially incorrect at the time it was made or repeated or deemed to have been made

or repeated and the Trustees have certified that the failure to perform or observe is materially

prejudicial to the interests of the Bondholders;

V. if any authorization necessary for the performance of any obligation of the Issuer under the Deed

fails, or for a period of twenty (20) Business Days after so failing, to become or remain valid and

subsisting in full force and effect;

VI. any Authority takes any action that in the opinion of the Trustees on behalf of the Majority

Bondholders, as the case may be, is likely to have a Material Adverse Effect if that action is not

rescinded on or before the tenth (10th) day after it occurs or if that rescission ceases to be in effect;

VII. the occurrence of any event that affects the ability of the Issuer to perform its obligations under any

of the Transaction Documents which continues for a continuous period of ten (10) Business Days.

Upon the occurrence of an Event of Default: I. the Trustees may at its discretion or upon the receipt of an Extra Ordinary Resolution of Bondholders



14

requesting same, give notice in writing to the Issuer, (a “Bond Acceleration” Notice), declaring the

Bond to be immediately due and payable. When a Bond Acceleration Notice is given, all Bond will

become immediately due and payable at their principal amount outstanding together with accrued

but unpaid interest without further action or formality;

II. the Issuer shall promptly give notice to the Trustees of each event that constitutes or that with the

giving of notice or lapse of time or both would constitute an Event of Default and of each other

event that has or might have a Material Adverse Effect on its ability to perform its obligations under

the Deed.

8. Payments

I. All principal, interest or other money payable on or in respect of any Bond may be paid by the

Trustees through the Registrar through electronic payment transfer. Provided that any payment of

value may be made by cheque or warrant sent through registered post to the registered address of

the holder or Person entitled thereto, or in the case of joint holders to the registered address of the

joint holder who is first named on the Register in respect of such Bond, or to such Person and to such

address as the holder or holders may in writing direct.

II. Every such cheque or warrant shall be made payable to the order of the Person to whom it is sent or

to such other Person or Persons as the holder, or in the case of joint holders, all such joint holders may

in writing direct and payment of the cheque or warrant shall be a satisfaction of the moneys

represented thereby. Every such cheque or warrant shall be sent by registered mail.

III. However, upon application or notification by the Bondholder to the Registrar or the Trustees, such

payment may be made by transfer to a designated account (denominated in naira) maintained by

the payee with any Nigerian bank as notified to the Registrar.

IV. Whenever any part of the Bond is redeemed a proportionate part of each holding of the Bond shall

be repaid to the Bondholders.

V. Payments will be made to the Person shown in the Register at the close of business on the Record

Date

VI. The Registrar shall give to the Bondholders not less than one (1) month notice in writing of the time

and mode for repayment of the Bond to be redeemed and each such notice shall state the amount

of the Bond for redemption.

VII. At the time and place so fixed for redemption, each Bondholder shall, where applicable, deliver to

the Registrar evidence of title issued by the CSCS in order that the same may be cancelled together

with a receipt for the redemption moneys payable in respect of the Bond, and upon such delivery,

the Trustees shall acting through the Registrars pay to the Bondholder the amount payable to him in

respect of such redemption together with all interest accrued thereon

9. Coupon Payments

I. At least 48 hours before any Payment Date, the Trustees shall ensure that an amount equal to the

Coupon and part principal repayment, net of all transaction costs, is transferred to the Registrar for

payment to the Bondholders on the next Payment Date.

II. Any outstanding amounts in the custody of the Registrar not paid to the Bondholders for any

reason(s) whatsoever shall be returned to the Trustees not later than 7 (Seven) Days after the relevant

Coupon Payment Date.

III. Any payment made by the Trustees to the Registrar pursuant to Clause 9.1 shall be deemed valid

and shall satisfy and discharge the Issuer and the Trustees from any obligation to make payment on

the Bond to the extent of the amount paid.

10. Clearing and Settlement

The CSCS shall act as the Depository and Clearing Agent for the Bonds issued in dematerialized form. The



15

CSCS will be responsible for maintaining the book-entry accounts for the Bondholders and/or Dealers named

in the Prospectus having interests in the Bonds. Each Dealer can perform the depository function if:

i. The book-entry ceases to exist

ii. The Issuer determines that the CSCS is no longer willing or able to discharge its responsibilities as

depository with respect to the Bonds and the Issuer is unable to locate a qualified successor, or

iii. The Bondholder at their option elect, or the Issuer is required by applicable law or the rules of any

securities exchange, to withdraw the Bonds from book-entry system, then physical certificates will be

issued to Bondholders thereof or their nominees.

11. Form of Bond

i. The Bond shall be in a registered form.

ii. The Bond shall be listed on the Nigerian Stock Exchange

iii. The Bond shall be issued in dematerialized form and held in electronic book entry form with the Clearing

System

iv. The Bond shall be transferable in accordance with the terms and Conditions of the bond

v. The Bond shall be issued in Naira.

vi. The Bond constitutes an irrevocable, unsubordinated and unconditional obligation on the Issuer. The

Bond as and when issued shall rank pari passu in all respect without any preference or priority

whatsoever.

vii. Statements issued by the CSCS as to the aggregate number of bonds standing to the account of any

bondholder shall be conclusive and binding evidence of ownership of the Bond and such person shall be

duly registered by the Registrar as legal and beneficial owner of such aggregate number of bonds.

12. Registration and Transfer of Bond

i. A Register of the Bond shall be kept by the Registrar at its office, and there shall be entered in such

Register:

a. The names and addresses of the holders for the time being of the Bond;

b. The amount of the units of Bond held by every registered holder;

c. The account number of the Bondholder; and

d. The date at which the names of every registered holder is entered in respect of the Bond

standing in his name

ii. Any change of name or address on a part of the Bondholder shall forthwith be notified to the Registrar

and thereupon the Register shall be altered accordingly. The Trustees and the Bondholders and any

Person authorized by any of them shall be entitled at all reasonable times during office hours to inspect

the Register and to make copies of or take extracts from the same.

iii. The transfer of title to the Bonds shall be effected in accordance with the rules governing the electronic

transfer of securities held by CSCS.

iv. Upon the transfer of Bonds from the transferor Bondholder to the transferee, the Registrar shall update the

Register and the registration of such transfer shall be effected without any charge by the Registrar save

the payment of any fee or taxes imposed by Applicable Law to effect a transfer.

v. Any Person becoming entitled to the Bond in consequence of the death, bankruptcy, winding-up or

dissolution of the holder thereof may, upon producing such evidence that he has or is entitled to the

capacity in respect of which he proposes to act under this Condition or of his title as the Registrars shall

think sufficient, be regarded as the holder of such Bond, or subject to the preceding Conditions as to

transfer may transfer the same. The Issuer shall be at liberty to retain the interest payable upon any Bond

which any Person is entitled to transfer under the preceding Condition until such Person shall be

registered or duly transfer the same as aforesaid.



16

vi. No Bondholder may require the transfer of a Bond to be registered during a period of 21 (twenty-one)

days immediately preceding each Payment Date during which the Register will be closed (“Record

Date”)

13. Redemption of the Bond

i. The Bond shall be partially redeemed in instalments on each Payment Date at the Redemption Amount

whereupon the Principal Amount Outstanding shall be reduced by the Redemption Amount on each Payment Date until fully redeemed at the Maturity Date.

ii. The Issuer may at any time and from time to time purchase, at any price, the Bond through the market or

by tender (available to all Bondholders alike) but not otherwise. Any Bond so purchased will be cancelled

and will not be available for re-issue.

iii. The entire Bond which is redeemed in accordance with the provisions of the Trust Deed will be cancelled

and may not be reissued or resold. For so long as the Bond is admitted to listing and/or trading on the

Stock Exchange and the rules of such exchange so require, the Registrar shall promptly inform the Stock

Exchange of the cancellation of any Bond.

14. Security/Repayment Structure

The Trust Deed provides that the Bonds will be payable from a Sinking Fund to be created and managed by

the Trustees for the benefit of the Bondholders. The Sinking Fund shall be funded primarily through an ISPO,

pursuant to which upfront deductions will be made by the AGF on a monthly basis from the State’s share of

the Federation Account.

15. Notices

i. Any notice may be given by the Issuer or by the Trustees to any Bondholder by sending the same through

the post in a prepaid letter addressed to such Bondholder at its address appearing on the Register of

Bondholders.

ii. Any notice, or other communication may be given to the Trustees hereunder by sending the same

through the post in a prepaid letter addressed to the Trustees at their registered offices in Nigeria.

iii. Any notice, or other communication may be given to the Issuer by sending the same through the post in

a prepaid letter addressed to the Ministry of Finance, Benue State

16. Governing Law and Jurisdiction

i. Governing Law

The Bonds and all matters arising from or connected with the Bonds are governed by, and shall be

construed in accordance with, Nigerian Law.

ii. Jurisdiction

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

the Bond save as may be contained in precept directing parties to arbitration generally.

8. SUMMARY OF THE BOND ISSUE


17

8 SUMMARY OF THE BOND ISSUE

Summary of Terms & Conditions of the Bond Issuance

The following summary does not purport to be complete and is taken from, and qualified in its entirety by the

remainder of this Prospectus. Words and expressions defined in “Form of the Bonds” and “Terms and Conditions of

the Bonds” shall have the same meaning in this summary

1 Issuer: Benue State Government

2 Issuance: 16.50% Fixed Rate Bond due 2022, constituted pursuant to the

provisions of the Trust Deed dated February 27, 2015

3 Aggregate Nominal Amount: N4,950,000,000

4 Instrument Type: Naira-Denominated Fixed Rate Bond

5 Being Issued: 4,950,000 unit of Bonds

6 Par Value: N1,000.00 (One Thousand Naira Only)

7 Issue Price At Par

8 Tenor: 7 years

9 Minimum Subscription Amount: N10,000,000 (Ten Million Naira) and multiples of N1,000,000

(One Million Naira) thereafter.

10 Issue Date: February 27, 2015

11 Use of Proceeds: To finance priority projects described on Page 57-58

12 Underwriting: The Offer shall be 100% underwritten on a firm basis as follows:

Name of Underwriter

Amount

underwritten

(N)

Percentage

United Capital Plc 2,950,000,000 59.6%

FBN Capital Limited 2,000,000,000 40.4%

Total 4,950,000,000 100.0%

13 Payment Terms: In full on Application

14 Investors: Qualified Institutional Investors and High Net worth Individuals.

They shall include Fund Managers, Insurance Companies,

Investment/Unit Trusts, Multilateral and Bilateral Institutions,

Registered and/or Verifiable PE funds, Registered and/or

verifiable Hedge Funds, Market Makers, Staff Schemes,

Trustees/Custodians, Stock Broking Firms and any other

category as the Commission may determine.

15 Status: Registered and listed Bonds.

16 Sinking Fund: A Sinking Fund will be created 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 an ISPO from Benue State to the Accountant General

of the Federation authorizing a monthly deduction of

N103,855,987.23 (One Hundred and Three Million Eight

Hundred and Fifty Five Thousand Nine Hundred and Eighty

Seven Naira Twenty Three Kobo Only) from its Statutory

allocations during the tenor of the Bond Bonds



18

17 Listing(s): The Nigerian Stock Exchange (“NSE”) and the Financial

Markets Dealers Quotations - Over the Counter (“FMDQ-

OTC”)

18 Clearing System: Central Securities Clearing System Plc

19 Rating:

i. Issuer Rating: Bb- (Agusto & Co.)

ii. Bond Rating: Bbb+ (Agusto & Co.)

An issue rating is not a recommendation to buy, sell or hold securities and may be subject to

suspension, reduction or withdrawal at any time by the assigning rating agency

20 Interest Provisions:

i. Coupon Basis: Fixed Rate

ii. Coupon Rate: 16.50%

iii. Interest Payment Date(s): Interest is payable semi-annually in arrears, with the first

interest payment due 6 months from allotment clearance

date. Subsequent interim interest payments shall be due

every consecutive 6 months and final interest payment

date due 84 months from Allotment Date.

iv. Business Day Convention: Where a Coupon Payment Date falls on a non-business

Day, such payment shall be postponed to the next day

which is a Business Day provided that if such a Business

day falls into the next calendar month, such Coupon

Payment Date shall be brought forward to the

preceding Business Day.

v. Business Day: A day (other than a Saturday, Sunday or Federal

Government of Nigeria declared public holiday) on which

commercial banks are open for general business in Abuja

and Lagos;

21 Redemption Provisions

i. Redemption/Repayment Basis: The Bonds shall be redeemed at par, in semi-annual

repayments on an amortizing basis, in line with the

amortization schedule contained on Page 67-68

ii. Scheduled Redemption Dates: The first redemption date shall be 6 months from the

allotment clearance date and subsequent interim

redemption dates every consecutive 6 months.

iii. Final Scheduled Redemption

Date:

The final redemption date shall be 84 from the allotment

clearance date being the 7th year anniversary of

Allotment Date

iv. Optional Early Redemption: Not Applicable

v. Redemption Amounts: N4,950,000,000



19

vi. Aggregate Redemption

Amount of each Bond:

Each Bond shall be redeemed in line with the amortization

schedule

22 Form of Bonds: The Bonds shall be issued without certificates

(dematerialised or book entry), which shall be registered

with a separate securities identification code with the

CSCS

23 Tax Considerations: The Bonds are exempt from taxation in Nigeria. As such, all

payments made to Bondholders shall be free and clear of

Withholding, State and Federal Income and Capital Gains

Taxes with no deductions whatsoever being made at

source

24 Qualified Investment:

The Bonds qualify as instruments in which (i) the Banks may

invest under the Central Bank of Nigeria Act, 2007; and (ii)

liquid assets for banks for the purposes of computing

liquidity ratios.

25 Qualified Investors: Qualified Institutional Investors and High Net Worth

Individuals, in accordance with Section 78(c) of the SEC

Rules and Regulations

26 Liquidity Status: The Bonds shall qualify for the conferment of liquid asset

status to Deposit Money Banks, in accordance with the

CBN Act (2007)

27 Bonds Settlement:

Bond purchases will be settled by electronic funds

transfers through either Central Bank of Nigeria Inter-Bank

Funds Transfer System (“CIBFTS)”, National Electronic Funds

Transfer (“NEFT”) or Real Time Gross Settlement (“RTGS”)

Issuing Houses/Underwriters:

i. Lead: United Capital Plc

28 ii. Joint: FBN Capital Limited

29 Trustees: FBN Trustees Limited, Skye Trustees Limited and United

Capital Trustees Limited

30 Registrar: Africa Prudential Registrars Plc

31 Closure of Register:

Section 236 of the Investment & Securities Act 2007 (‘ISA’)

stipulates the closure of the register of bondholders at 21

(twenty-one) days immediately preceding the date on

which a coupon falls due. Furthermore, no transfers of

bonds are registerable during the closure period.

Accordingly, the Register of Bondholders will be closed for

the 21 (twenty-one) days preceding each Coupon

Payment Date.

32 Governing Law: The Issue and all related contractual documentation will

be governed by, and construed in accordance with

Nigerian law

9. OVERVIEW OF THE NIGERIAN ECONOMY


20

9 OVERVIEW OF THE NIGERIAN ECONOMY

THE NIGERIAN ECONOMY

Gross Domestic Product

The recent GDP rebasing shows nominal GDP of Nigeria at US$510bn. This ranks Nigeria as the world’s 26th largest

economy and the largest economy in Africa. The 89% jump in GDP exceeds the expectations and forecasts of

analysts who projected an increase of between 40% - 60% from the rebasing.

Consequent to the rebasing, the GDP has continued to grow at an impressive rate. In the first quarter of 2014, the

growth rate of real GDP was 6.21%, higher than 4.45% recorded in the corresponding quarter of 2013, but lower

than 6.77% recorded in the fourth quarter of 2013.

Sector Contribution

The Services sector accounted for the largest share of real GDP in Q1 2014, amounting to US$51.3bn or 52.99%.

Industrial sector ranked second with a contribution of US$26.4bn or 27.36%, whilst Agriculture constituted the

smallest sector in the first quarter, representing US$17.0bn or 19.65% of GDP. With respect to sector growth, the services sector recorded a growth rate of 7.20% during the first quarter of 2014, followed by Agriculture at 5.53%

and Industry at 4.84%.

19.65%

27.36%

52.99%

Agric Industry Services

Source:NBS

Oil & Gas Production

Oil and gas industry is the backbone of the Nigerian economy and earnings from the sector provide the

government with around 80% of its revenue and approximately 95% of its exports. Nigeria is currently Sub-Saharan

Africa's second largest oil producer and is the world’s eighth-largest oil exporter. Although the sector has been

crippled by social and political problems in the past, there is some optimism that positive changes are under way

especially in light of the current review of legislation governing the sector through the introduction of the

Petroleum Industry Bill. It is anticipated that these developments would engender expansion production from the

current 2.26m barrels/day (b/d). There are however mounting risks to the progress of the sector both domestically

and in terms of the global trends in oil and gas supply which are likely to reduce the market for Nigerian oil

exports in the foreseeable future. There is likely to be an increasingly urgent need to diversify the economy away

from oil and gas, but there are serious doubts over whether the prevailing political and social situation will permit

this.

Public Debt

DMO reports that domestic debt stood at N10.16tn as at March 31st, 2014 a 16.37% increase from N8.5tn in 2013. A

breakdown of the domestic debt shows the Federal Government of Nigeria FGN Bonds accounted for N7.18tn or

82.2% of the total domestic debt, Nigeria Treasury Bills accounted for N2.74tn or 38.09% of the government’s total

domestic debt and Treasury Bonds accounted for N315.39bn or 4.39% of the debts.

However, it is important to note that the Nigeria’s debt to GDP ratio of 11% is acceptable as it is below the

applicable critical limit of 56% for countries in Nigeria’s economic peer group.

Sovereign Credit Rating

Nigeria received a credit rating from several international rating agencies based on the country’s economic

outlook and debt position in 2013. A rating of BB- was given to Nigeria by Standard & Poor's (S&P) and Fitch

Ratings and a Ba3 by Moody's ratings. The upgrade to Nigeria’s credit rating from B rating by S&P and Moody was

consequent upon the tighter fiscal stance of the Central Bank of Nigeria, the increase in foreign exchange

reserves and increased agricultural output which has helped reduce imports. According to S&P, the upgrade is

based on a stable outlook with the premise that the Nigerian government will continue to reform key sectors to

9. OVERVIEW OF THE NIGERIAN ECONOMY


21

support strong economic growth, political tensions will be lessened and there will be no significant return of

insurgency in the Niger Delta.

Monetary Policy

The tight monetary policy in 2013 was targeted at containing inflationary pressures and achieving exchange rate

stability but this has resulted in keeping lending rates very high. With the Monetary Policy Rate still retained at 12%

following the Monetary Policy Committee meeting in July 2014, the CBN may still find it difficult to maintain a

balance between its objective of managing inflation and the government's aim of reducing the cost of borrowing by the private sector to encourage investment in productive activities. The committee considered the

positive global growth outlook, most especially the gradual recovery in the Euro zone, the satisfactory level of

growth in the local economy, among other factors.

Fiscal Policy

The 2014 budget of N4.962 trillion comprises capital expenditure of N1.1 trillion and recurrent expenditure of N2.43

trillion, which is not slightly lower than the 2013 appropriations, with estimates of a decline in the fiscal deficit

through lower fiscal spending and improvement in revenue generation. A cursory look at the 2014 budget shows

that about 20% of the budget was allocated to the defence sector due to the rising security issues in the country

while the government tries to push for a tightening of fiscal policy and attempt to counter Nigeria's crippling

infrastructure deficit.

Inflation

Inflation rate is typically reported by the National Bureau of Statistic and has historically averaged 10.6% between

2006 and 2013, reaching an all-time high of 15.6% in February 2010 and a record low of 3.0% in July 2006. As at

June 2014, inflation rate stood at 8.2%, a marked reduction over the 9.0% rate it stood a year ago. It is anticipated

that stricter fiscal policies strong and currency stability will provide some respite as election approaches.

Exchange Rate

Since the beginning of the year 2014, exchange rate has maintained an average US$1=NGN162.6 rate. The CBN

is expected to continue to favour maintaining the value of the local currency, within a narrow ban to restrict

imported inflation with periodic adjustments to avoid a further significant decimation of foreign exchange

reserves. With oil prices remaining strong and investment inflows continuing (assuming no major deterioration in

political stability), the naira should remain relatively stable for the rest of the year.

Foreign Direct Investment

Foreign Direct Investments (FDI) in Nigeria reduced marginally from $6.8bn in 2012 to US$5.5bn in 2013 despite

Nigeria being one of the top 3 Sub-Saharan destinations for FDI flow in 2013. Nigeria’s FDI remains below

expectation as a result of the country’s vulnerability to commodity price movements, insecurity and over-

dependence on the oil and gas sector. The prevailing security issue in the country was a major deterrent of FDI

inflow into the country. However, the inflow of FDI into the country is expected to increase significantly in 2014.

Factors like Nigeria’s market size, government’s commitment towards infrastructure development, and improved

macroeconomic policy in 2014 are positive indicators for foreign investors that will drive the inflow of FDI into the

country upward.

International Relations

Nigeria is a member of the United Nations (“UN”), Commonwealth of Nations, African Union (“AU”) and the

Organisation of Petroleum Exporting Countries (“OPEC”) and currently wields a lot of influence in the Sub-Saharan

particularly in the West Africa Sub-region. Nigeria is expected to remain a leading power on the continent given

its sheer size and resource base. The country is a large supplier of oil to the US, although the growing exploitation

of unconventional oil and gas supplies in North America will mean that Nigeria will need to look for alternative

markets over the longer term. Western oil companies are likely to maintain their dominance of the oil sector,

given how well established they are, but they could face challenges as China increases its competitive bids for

Nigerian hydrocarbons resources and efforts are made to encourage local participation in the sector.

Source:

NBS, CBN, United Capital Research

10. PROFILE OF BENUE STATE


22

10 Profile of Benue State

The information in this section has been extracted from documents and publications that are publicly available

and have previously been released by the Benue State Ministry of Information and the Nigerian Bureau of

Statistics. Neither the Issuer not its advisers are able to ascertain the omission of any facts, and whether such

omission would render any extracted information inaccurate or misleading.

History

Benue State, created on February 3, 1976 was one of the seven states created by the military administration

headed by the late General Murtala Mohammed, which increased the number of states in the country from 12 to

19. The State derives its name from the River Benue, the second largest river in the country and the most

prominent geographical feature in the State.

At its inception, the State comprised of only seven Local Government Areas (LGAs) namely: Gboko, Katsina-Ala,

Makurdi, Ankpa, Dekina, Idah and Otukpo. Several Local Government creation exercises increased these, first to

13 and later 19. With the creation of more states and local governments in 1991, the Igala-speaking Local

Governments were excised to form the present Kogi State. The new Benue State has twenty-three Local

Governments, 14 from the Tiv-speaking area and 9 from the Idoma-speaking area. The State has two traditional councils, the Tiv Traditional Council, headed by the Tor Tiv and the Idoma Traditional Council headed by the

Och'ldoma.

Area & Population

Benue State, lies within the lower river Benue trough in the north-central region of Nigeria. Its geographic

coordinates are longitude 7° 47’ and 10° 0’ East Latitude 6° 25’ and 8° 8’ North. The State shares boundaries with

five other States namely: Nassarawa (to the north), Taraba (to the east), Cross-River (to the south), Enugu (to the

south-west) and Kogi (to the west). The State also shares a common boundary with the Republic of Cameroun on

the south-east. Benue has three predominant ethnic groups namely; Tiv, Idoma and Igede.

The State has a total population of 4,219,244 (2006 census) and a landmass of 32,518 square kilometers. This

makes Benue the 7th most populous State in Nigeria. However, the distribution of the population according to

Local Government Areas shows marked duality. There are areas of low population density such as Guma, Gwer,

Ohimini, Katsina Ala, Apa, Logo and Agatu, each with less than 120 persons per sq. km. while Vandeikya,

Okpokwu, Ogbadibo, Obi and Gboko have densities ranging from 200 persons to 260 persons per sq. km. Makurdi

LGA with its restricted coverage around the town has over 400 person per sq. km. The State's population shows a

slight imbalance in favour of the males. The males are 51 percent of the total population while females constitute

49percent.

Administrative Structure

The State administration is made up of the Executive, Legislature and the Judiciary.

The Executive arm of the Government comprises the Governor, Deputy Governor, Head of Service and the

Commissioners.

The Legislature has in its composition, the Speaker, Deputy Speaker, Majority Leader, Minority Leader, Majority

Whip, Minority Whip, the Clerk of the House and Clerks of the arms. The Clerks of the house are responsible for

taking minutes of the Standing Committees of the House. Lastly are the rest of the members of the State House of

Assembly. Benue State has twenty-nine members in the State House of Assembly.

The Judiciary is the system of Courts of the Judges collectively. The State Judiciary is made up of the State Chief

Judge, High Court Judges, the Registrar of the High court, Deputy Registrar, the Directors, the Judges of the

Customary Courts and their Registrars.



23

Economy

Mineral Resources

The State is endowed with a number of mineral resources; these include limestone, kaolin, coal and various

deposits of feldspar, barites, wolframite, bauxite, mineral salt and precious stones which are yet to be properly

exploited. It is possible many mineral resources in the State remain unknown due to inadequate geological

survey.

Agricultural and Fisheries Resources

Agriculture forms the backbone of the Benue State economy, engaging more than 70 per cent of the working

population. Bush fallow using simple tools is the dominant system though mechanization and plantation

agriculture/agro-forestry are gradually creeping in. Farm inputs such as fertilizers, improved seed, insecticides and

herbicides are on the increase through the activities of the Ministry of Agriculture, BNARDA and the National

Agricultural Land Development Authority (NALDA).

Benue state is acclaimed the nation's "food basket" because of its rich and diverse agricultural produce which

include yams, rice, beans, cassava, potatoes, maize, Soya beans, sorghum, millet and coco-yam. The state also

accounts for over 70percent of Nigeria's Soya beans production. There has been a gradual shift from a grain and

root crop economy to a tree economy in much of the State. It also boasts of one of the longest stretches of river

systems in the country with great potential for a viable fishing industry, dry season farming through irrigation and

for an inland water way through irrigation.

Basically, all crop farmers in the State raise at least one form of livestock to supplement income from crop

farming. There are few commercial farms in existence and the most common livestock kept are pigs, goats and

poultry. Breeds of animal kept are predominantly unimproved and the system of husbandry practiced ranges

from free range to semi-intensive

Employment

Benue State faces several infrastructural challenges particularly inadequate power supply which is a major

constraint in attracting investments. However, there are a few companies which operate in the State including

Benue Cement Company, the two Coca-Cola plants in Makurdi, the Benue Breweries and Taraku Oil Mills. The

situation means that there are also relatively fewer employment opportunities in Benue State when compared to

other States. For the State as a whole employment distribution is as follows: 75% are farmers, 10% traders, 6% civil

servants, 9% other occupations. In the rural areas, subsistence farming is the dominant occupation, although

trading, hunting, fishing, carving and weaving also engage a good percentage of people. A handful of people

are now exploring for precious stones in the rural areas. In the urban areas the civil service is the predominant

employment followed by petty trading and handcraft or vocational jobs.

Education

Benue State stands out clearly as one of the educationally advanced States in the country. Literacy level is high,

and enrolment of Benue State indigenes in Nigerian universities is also high. The State and Local Governments

and the voluntary agencies have established several schools in different parts of the State to cater for the

educational needs of the people. There are, in addition, a school of Nursing and Midwifery, Advanced Teachers'

College at Katsina Ala and another at Oju, a Polytechnic at Ugbokolo, a College of Advanced and Professional

Studies at Makurdi, Institute of Christian and Management Studies at Mkargboko, and two Universities (Federal

University of Agriculture and Benue State University), Makurdi.



24

Tourism and Recreation

Benue State possesses immense tourism potentials which are yet to be exploited. Since some of the tourist

attractions are best selected by the tourist, Benue State in her bid to develop tourism embarked on infrastructural

development necessary for the overall wellbeing of the tourist. The programme of road development, hotels,

postal, telephone and Email services, electricity, potable water, recreational facilities and the general hospitality

of the people will eventually open up the State to tourists. An amusement park and Zoo have been developed at

Makurdi. There is a wild life park at lkwe where a conference hall and chalets have been built to serve tourists.

Tourist attractions in the State may be grouped into natural scenic, historical monuments and festivals.

The state has a rich and diverse cultural heritage which finds expression in colourful cloths, exotic masquerades,

sophisticated music and dances. Traditional dances from Benue have won acclaim at national and international

cultural festivals. These dances include Ingyough, Ange, Anchanakupa and Swange among the Tiv and

Anuwowowo and Obadaru among the Idoma. The Tiv Kwagh-hir theatre provides memorable entertainment in

its dramatization of Tiv folklore and social commentary.

Transportation and Communication

Benue State is accessible by land (road and rail), air and water. The river Benue and KatsinaAla require dredging

of the in channel deposits and the building of modern river ports at Makurdi, Tyuren, Buruku and Katsina Ala to

turn them into busy inland waterways during the high discharge period of July to November. At the moment, the

waterways are wasting away. Ships are rarely sighted offloading cargo at the Abinsi jetty. The eastern rail line

connects Makurdi, Oturkpo, Taraku, Utonkon and lgumale with the rest of the country. Benue currently has about

180km of rail line that traverses the State but there is a proposed 120km rail line from Oturkpo to the Steel Plant at

Ajaokuta in Kogi State.

The location of Benue State in the center of the country plus the presence of bridges on two large rivers, the

Benue and Katsina Ala, makes the State a major crossroads center. Two major highways connect the Eastern

States to the North and North East. The local communities, with the aid of the now defunct Directorate of Food,

Roads and Rural Infrastructure (DFRRI), the Benue Agricultural Development Authority (BNARDA) and Benue

Electricity and Rural Development Authority (BRRDA) are important in rural roads development. There are about

1,400km of tarred roads (apart from township roads) and over 2,000km of earth roads. These roads form an

intricate network, connecting all the local Governments and district headquarters, towns, major markets and

other centers of rural population.

Investment Opportunity

Investment opportunities abound in Benue State in the following sectors: solid mineral, agriculture, industrial and

tourism which are largely untapped due to poor infrastructural development amongst other reasons. The key

drivers of investment in these sectors (water, road, power, and good governance) which have combined to

trigger the expected growth trends in the volume of socioeconomic activities in Benue State can be captured as

follows:

� Agro – Allied sector:

o Large scale mechanized farming;

o Post-harvest processing and packaging of agricultural produce;

o Vegetable oil processing;

o Sugar processing;

o Livestock production, meat processing and marketing;

o Fruit juice processing;

o Starch and glue production;

o Fertilizer production.

� Solid Mineral Resources:

o Limestone, currently exploited for cement production by Benue Cement Company;

o Glass sand, found in Buruku, Katsina-Ala, Makurdi and Vandeikya local Government Areas;

o Barytes, useful in oil well drilling, glass and chemical;

o Kaolin, industrial uses include production of paper plastics, filter, paints etc.;

o Brick Clay, useful for pottery products, building bricks, tiles, etc;



25

o Lead/zinc, useful for auto battery production, paint alloys, etc;

o Coal, useful for energy/fuels, chemicals;

o Gypsum, industrial application includes cement production, fertilizer, etc.

� Industry:

o Benue State has abundant cheap labour, land, raw materials, urban infrastructure but insufficient

capital. The few industrial establishments in the State include Benue Cement Company PLC,

Taraku Mill Ltd., Benue Roof Tiles Company, Benue Breweries, Benue Burnt Bricks Company, Coca-

Cola Co., Benro Packaging Co. and Agro Millers Ltd. These provide finished products and raw

materials for other possible industries;

o Industries under construction or consideration include second Cement Company at Mbatyav, a

Fruit Juice Factory at Katsina Ala, a Fertiliser Blending Plant at Makurdi, a Furniture Factory and

Plastic Factory at Makurdi. There are huge deposits of mineral salt in Guma and Logo LGAs which

can form the basis of a salt industry. The availability of feldspar and wolframite in the State also

makes the establishment of industries for the manufacture of glass and electric bulbs viable

ventures;

o Based on the study by the Benue State Department of Commerce and Industry, other possible

small scale industries for the State include paper conversion, leather and plastic footwear,

manufacture of knots, bolts, nails, locks, metal containers, etc. Agricultural products, such as grains,

tubers, nuts, fruits, livestock and fisheries, provide raw materials for the establishment of agro allied

industries such as flour processing, meat canning, juice extraction.

The Benue State Executive Council

The State has an Executive Council, which comprises the Governor, the Deputy Governor, Secretary to the State

Government, the Commissioners, the Head of Service and the Chief of Staff. Occasionally, the Special Assistants

are in attendance at the meetings of the Council.

The profiles of some key members of the State Executive Council are provided below:

Rt. Hon. Gabriel Suswam CON, PhD - Governor of Benue State and Chairman of the Executive Council

Rt. Hon. Suswam, the current Governor is the fifteenth Chief Executive of Benue State. He was born on November

15, 1964 in Anyiin, Logo Local Government Area of Benue State. He obtained his First School Leaving Certificate

from NKST Primary School, Zaki Biam in 1977.

Rt. Hon. Suswam completed his Secondary education in 1982 at Government College, Makurdi. He transited

through the School of Basic Studies, Makurdi from 1982–1984 as he prepared himself for an engaging university

education. In 1989 he obtained the LL.B (Hons), and proceeded to acquire the requisite BL Certificate at the

Nigerian Law School, Lagos. In 1990, he was called to the Bar. Hon. Suswam did his National Youth Service at

Trendex Finance Firm in Lagos, from 1990–1991.

From 1991–1994 Suswam cut his legal teeth at Takode & Co, a corporate legal firm in Lagos. In 1994, he formed

Tingir & Associates Law Firm, based in Lagos which later metamorphosed into a corporate outfit engaged in legal

practice and consultancy in Lagos.

In 1999, Hon. Suswam contested the House of Representatives seat to represent Katisna-Ala/Ukum/Logo Federal

Constituency at the National Assembly. He contested and won under the umbrella of the Peoples Democratic

Party. From 1999–2001, Hon. Suswam was the Chairman, House Services Committee on Federal Capital Territory

from 2001–2003.

In 2003 National elections, he was re-elected into the House of Representatives to represent the same

Constituency on the PDP ticket where he was chairman of various committees over the period. He was elected

as the Governor of Benue State in May 2007 and re-elected for the second term in 2011.

Chief Steven Obekpa Lawani, OFR - The Deputy Governor

Chief Steven Obekpa Lawani, OFR, Ochagwu K’Idoma was born on December 30th, 1947.



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Chief Lawani had his post-primary education at Mt. St. Michael’s Secondary School, Aliade from 1962 to 1967 and

later at the Government College, Kaduna from 1968 to 1969.

In 1971, he obtained a Bachelor of Science Honours (B.Sc. Hons.) degree in Economics from the Ahmadu Bello

University, Zaria. Between 1975 and 1976, Chief Lawani proceeded abroad for further studies at Manchester

Polytechnic, United Kingdom from where he obtained an Advanced Diploma in Hotel Management. He also

attended Cambridge University in 1980 and obtained a Diploma in Management Development.

Chief Lawani was Chairman of Nigerian Hotels Limited. In the third republic, Chief Lawani was the Deputy

National Chairman of the National Republican Convention (NRC). He also served as an elected member of the

National Constitutional Conference after which he sought and was elected a Senator under the defunct United

Nigeria Congress Party (UNCP).

He is both Fellow of Nigeria Hotels and Catering Institute, and the Nigeria Institute of Chartered Economics.

He has travelled all over the globe and interacted with many cultures both within and outside the country and

which has defined his cosmopolitan perspective on issues and shaped his philosophy of life—that of service and

sacrifice.

Chief Steven Lawani is happily married with Children. He is a recipient of the Officer of the Federal Republic

award.

Dr. David Salifu - The Secretary to the State Government

Dr. David Salifu, who hails from Iga-Okpaya, Apa Local Government Area of Benue State was born on 26

September 1962.

Dr. Salifu obtained his B.A. (Hon) in 1987 and MA (Sociology of Religion), from University of Jos in Plateau State,

Master in Public Administration (MPA), 1995 and his doctorate in Public Administration in 2000 from University of

Nigeria, Nsukka.

Upon completing his NYSC, Dr. Salifu worked with Otukpo Local Government Council as Administrative Officer II in

1989 and was later promoted to Senior Administrative Officer in 1992. He was appointed Personal Assistant to the

Chairman Otukpo Local Government Council between 1997 and 1998. Dr. Salifu was Director of Personnel

Management/Secretary, Obi and Okpokwu Local Government Councils between 1998–1999 and 1999–2001

respectively. He was appointed Member, Benue State Independent Electoral Commission from 2001–2006, and

Chairman, Benue State Local Government Service Commission, 2007–2010.

Dr. David Salifu was appointed to fill in the vacant position of Secretary to the State Government in January 2011.

He was reappointed Secretary to the State Government in May 2011.

In addition to his working career, Dr. Salifu is a Member of Nigeria Institute of Management; Associate Member,

Institute of Personnel Management of Nigeria, and Fellow of African Business School. Due to his track records of

achievement in industrial relations and exceptional administrative qualities in local government development, he

was honoured with a meritorious award by Nigerian Union of Local Government Employees, Benue State Chapter

in 2000. He was conferred with the honorary chieftaincy title of the Owujoyi K’Idoma by the Och’Idoma in 2012.

Dr. Salifu, who is happily married with four children, likes reading, hunting, badminton, Bible reading and listening

to Christian Songs.

Mr Terna Ahua - Head of Service

Mr Terna Ahua was born on April 12, 1957, at Annune, Tarka Local Government Area of Benue State.

He started his early education at LGEA Primary School, Annune in 1965. He attended the Government College;

Katsina-Ala for his secondary education from 1972 to 1976. Upon completion of his Secondary education, Terna

gained admission into Ahmadu Bello University, Zaria to read English Literature and completed his Masters degree

in 1985 at the University of Jos.

In 1981 Mr Ahua completed his mandatory NYSC Service at the University of Ilorin in the Department of Modern

European Languages. He joined the Benue State Civil Service as Assistant Secretary II and was posted to Internal

Affairs and Special Services, which he served from 1981–1982. Until his appointment as Head of Service, he served

in the following capacities as: Assistant Secretary II with the Ministry of Local Government and Primary Education

from 1982–1983; Assistant Secretary I, Senior Assistant Secretary in the Office of the Secretary to the State

Government/Head of Service from 1983–1989. Administrative Manager/Assistant General Manager, Benue Links



27

Nig. Limited, 1989–1994; Director of Administration, Office of the Secretary to the State Government and Head of

Service, 1994–1997; Pioneer Director, Benue State Liaison Office, Abuja, 1997–1998; General Manager, Benue Links

Nig. Ltd., 1998–2000; Permanent Secretary, Ministry of Water Resources and Environment, 2000–2007; Permanent

Secretary, Ministry of Finance, 2007–2010; and Permanent Secretary, Special Duties Government House, January

2012–Feb 2013

He attended various courses such as Transport Administrators Course (NITT, Zaria, 1999); Change Management,

RIPA London, 2000; –Modernizing Government, RIPA London 2000; Out Sourcing, Privatization and Public/Private

Partnerships, RIPA London, 2008; Public Service Reforms (DFID), 2002–2003. He is also an alumnus of the National

Institute for Policy and Strategic Studies, Kuru.

Mr Terna is married with children. His hobbies includes, travelling, reading of novels, magazines and periodicals

and playing of lawn tennis.

Barrister Philip Ierkwagh - Attorney General and Commissioner for Justice

Barrister Philip Ierkwagh was born 2nd of June1965. Dr. Philip Ierkwagh started his formal Education at the L.G.E.A

Primary School Aliade in 1970, went to the Army Children School Ugah in Anambra State in 1973 and St. Martins

Primary School, Abenga in 1974 where he eventually completed his Primary School in 1977. He enrolled at the

Prestigious Mt. St. Michael Secondary School Aliade in 1977 where he graduated in 1982 and passed the

WASC/GCE.

Dr. Philip proceeded to the Federal School of Arts and Science in 1984 where he obtained the GCE “A” Level in

1985. He received the following qualifications from the Benue State University Makurdi; LL.B Second Class Upper

Division in 1998, LL.M in 2003 and the Doctor of Philosophy of Law Ph. D 2003 (Specializing in the Law of Taxation).

Dr. Philip Ierkwagh is well experienced in the teaching Profession briefly taught at Government Day Secondary

School, Shanah and Ngyohov Community Secondary School Gbache – Aliade. He joined the services of the

Gwer Local Government Aliade in 1993 as an Assistant Planning Officer and disengaged in 2001 as an Accounts

Assistant 1. In 2001 Dr. Ierkwagh joined the services of the Benue State University Makurdi as an Assistant Lecturer

in the Department of Commercial and property Law, rose to the position of Lecturer II in 2003, Lecturer I in 2006

and Senior Lecturer in 2012 a position which he held until July 2014 when he was appointed the Attorney-General

and Commissioner for Justice.

Dr. Ierkwagh has about twenty publications in both Local and international journals to his credit, while his

membership of Professional Associations include the Nigeria Bar Association (NBA) Nigerian Association of Law

Teachers (NALT), and Academic Staff Union of Nigerian Universities (ASUU).

He has also been in private legal practice since his call to the Nigerian Bar in 2001 in the law firm of Tarhule, Iaren

and Company.

Hon. Gbugho Amokaha Donald - Commissioner for Agriculture and Natural Resources

Hon. Gbugho Amokaha Donald is a career civil servant from Ukum Local Government Area of Benue State.

He started his career as an Accountant with Katsina-Ala Local Government of Benue State and spent majority of

his career serving in various capacities in a number of Local Government areas of Benue in the Finance and

Accounting department, culminating as Treasurer, Okpokwu Local Government from 2011—2013.

He is a Certified Nigerian Accountant (CNA) from the Nigerian College of Accountancy in 2003 and also holds an

MBA in Finance and Accounting and an MSc in Finance from the University of Agriculture, Makurdi in Benue State,

Nigeria in 2010 and 2014 respectively.

Hon. Gbugho Amokaha Donald has professional interests in Strategic Governance, Management and Finance.

His leisure interests include reading and playing table tennis.

He lives in Benue State with his wife and four (4) children.

Hon. Terfa Hindan - Commissioner for Commerce and Industry

Hon. Terfa was born on 30 January 1966 in Mbacher, Katsina-Ala Local Government Area of Benue State.

Hon. Terfa Ihindan began his educational career in 1971 at the NKST Primary School, Harga in Katsina-Ala Local

Government Area. He attended the School of Basic Studies and obtained his Bachelor of Science degree in

Psychology in 1988 from University of Jos. He later proceeded to the Ahmadu Bello University, Zaria in 1997 where



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he obtained a Post Graduate Diploma in Management. He was back again at the same University from 2002–

2003 where he bagged a Masters degree in Business Administration.

Hon. Terfa Ihindan began his career as sales Executive with America International insurance Company (AIICO)

Jos in 1989 and later moved to Man-Agro Nigeria Ltd, Jos as operations manager. Between 1990 and 1992, he

worked with people’s Bank of Nigeria, Jos as Zonal program Officer. Between 1992 and 2003 Hon. Terfa Ihindan

worked with the national Board for Community Banks as Chief appraisal Officer.

Between 2003 and 2007, Mr. Ihindan was senior special assistant to the Senior Special Assistant to the Governor on

project monitoring before being appointed as a Commissioner.

Mr. Hindan is happily married with children.

Barr. Mrs. Comfort Ajene - Commissioner for Culture and Tourism

Barr. Comfort O. Ajene was born on 2nd June 1970 at Otukpo, Benue State and hails from Obi Local Government

Area.

She attended Tilley Gyado College, Makurdi from 1983—1988 and obtained the West African School Certificate

(WASC). She later got admission into Benue State Polytechnic Ugbokolo in 1990 and in 1992 obtained the

Ordinary National Diploma in Local Government and Business Administration Studies. She later obtained the

Advanced Diploma in Public Administration from the same Polytechnic in 1995. Mrs. Comfort later enrolled at the

Benue State University Makurdi in 2000 and obtained an LLB Degree in 2005 and obtained the Barrister at Law (LB)

and was called to the Nigerian Bar in 2007.

Barr. Mrs. Ajene’s hobbies are Religious activities, reading, and housekeeping. She has travelled widely within and

outside Nigeria.

She is happily married children.

Dr. Elizabeth Ugo - Commissioner for Education

Dr. Elizabeth Aundu Ugo was born on 31 October 1956 to the family of Honourable Ugba Uye of Vandeikya Local

Government Area of Benue State.

She attended the LGEA Primary School from 1964–1969, where she obtained her First School Leaving Certificate.

She proceeded to the Queen of the Rosary Secondary School and got her GEC O’ Level Certificate in 1974.

She later attended the College of Education, Katsina-Ala in 1980 and graduated in 1983 with a National

Certificate in Education (NCE), (English/History). Dr. Mrs. Ugo attended the University of Jos, Plateau State and

graduated in 1988 with a Bachelor of Education, Special Education and also Masters degree in 1990. She

obtained Doctorate Degree, Special Needs Education (LD) in 2010 from the same insitution.

Dr. Elizabeth Ugo was a teacher under the National Youth Service Corps (NYSC) Scheme in Jos, Plateau State

form 1983–1984. From 1991–1996, she was a teacher at Command Day Secondary School, Jos, Plateau State and

from January–March 1997 she was the Programme Officer, Rafiki Foundation, a Non-Governmental Organization

in Jos. She served as an Administrative Officer in the Standards Organization of Nigeria from April 2000 to March

2004. She was a lecturer on Special Needs Education at the University of Jos from February 2011.

She was appointed as the Commissioner for Education on 19 July 2011.

Dr. Mrs. Ugo is a member of many professional bodies like, Teachers’ Registration Council of Nigeria; National

Council for Exceptional Children; Curriculum Association of Nigeria; Nigerian Primary and Teacher Education

Association, Christian Rural and Urban Development Association of Nigeria and International Centre for Gender

and social Research (Inter-Gender); Nigeria Association of Special Education Teachers; National Association of

Women in Academics; Rehoboth Empowerment Initiative Centre and Reading Association of Nigeria.

Her hobbies include reading, travelling and playing table tennis. She is happily married with four children.

Hon. Alexander Atime Akpera - Commissioner for Environment and Urban Development

Hon. Alexander Atime Akpera is a registered Pharmacist from Korinya Village of Konshisha Local Government

Area of Benue State.

He obtained his BSc. in Pharmacy from the University of Jos, Plateau State in 1990. He joined Benue State Civil

Service in 1994 as Pharmacist 1, and rose to the rank of Chief Pharmacist.



29

Hon. Akpera served as the Vice Chairman of Konshisha Local Government Council from 2008 to 2010. He served

as Commissioner for Housing from 2 May 2013 to 2 May 2014. His professional experience spans several years in

the public sector, private sector and Non-Governmental Organisations (NGOs). Through the years, he has worked

on various projects, for governmental and development organizations.

Hon. Akpera has attended numerous trainings in Logistics, Pharmaceutical care, essential drug management as

well as ART.

He is married with five children.

Hon Omadachi Oklobia - Commissioner for Finance

Born on October 8, 1965 in Kano City of Nigeria, Mr Oklobia hails from Otukpo Local Government Area of Benue

State. After his primary school education, he attended Government College, Katsina-Ala from 1977–1982; Federal

College of Arts and Science, Suleja, between 1984–1985; University of Jos, between 1985–1989 and University of

Abuja from 1990–1991.

He holds the Bachelor of Science certificate, Political Science, Master of Science, Political Economy and

Development Studies, and is currently pursuing a Doctor of Philosophy degree in Development Studies. He also

has considerable expertise in information technology.

His work experience spans both the academic and public service. He was a Graduate Assistant, Department of

Political Science, University of Jos, from 1991–1992; Personal Assistant to the Director-General/Chief Executive

Officer, National Council on Intergovernmental Relations, from September 1992 to July 1993; Visiting Research

Fellow, Institute of Federalism, Fribourg, University of Fribourg, Switzerland, from July 1993 to September 1994;

Research Assistant/Computer Analyst, State Creation, Local Government and Boundary Adjustment Committee,

May to July 1996 and Administrative Officer, Department of Planning, Research and Statistics, Office of the

Secretary to the Government of the Federation, The Presidency, from July 1996 to November 1997.

Oklobia has attended several workshops and trainings over the years both nationally and internationally and has

contributed academically to the academic world. In 1994, he wrote and published: The Federal Imperative in

Africa: How is Federalism a Resolution Mechanism and not a Solution. (1994) ISBN 2-940049-09-2, Institute of

Federalism, University of Fribourg. He is currently working two titles on budgeting at subnational levels of a federal

society and the modernising state in Africa.

Oklobia also worked as Administrative and Budget Officer, Department of Expenditure, Budget Officer, Federal

Ministry of Finance, from December 1997 to May 2001 and Technical Assistant to the Permanent Secretary,

Budget, Budget Office, Federal Ministry of finance, from May 2001 to August 2003. He served as Technical

Assistant to the Director-General/Adviser to the President on Budget, Budget Office Federal Ministry of Finance

from August 2003 to May 2007 when the Executive Governor, Rt. Hon. Gabriel Torwua Suswam, appointed him

Hon. Commissioner for Finance.

Hon. Oklobia enjoys reading, writing and travelling and is married and blessed with children.

Dr. Orduen Abunku - Commissioner for Health and Human Resource

Born on 7th April 1961, Dr. Orduen Abunku hails from Ukough, Mbatiav in Gboko local government area of Benue

State.

He attended Ahmadu Bello University, Zaria, Nigeria from where he obtained the Bachelor of Medicine, Bachelor

of Surgery (MBBS) degree in 1984 and at the University of Glasgow in Scotland where he undertook a

postgraduate basic science course. Between 1996 and 1999, Dr. Abunku was at the Brockton Hospital in

Massachusetts in the United States of America where he completed his internship training and at The Christ

Hospital, Cincinnati, Ohio, in 1997-1999 also in the United States for a residency-training programme.

He has served as medical officer at several hospitals including The Christ and Brockton Hospitals in the United

States, Linstead and Spanish Town Hospitals in Jamaica between 1992-1996, The Polyclinic in Makurdi in 1989-

1990, TBT Hospital between 1988-1989, Gboko, Mkar Christian Hospital between 1986-1988, Mkar, Gboko and the

General Hospital, Makurdi between 1984-1985.

Dr. Orduen Abunku is married with children.



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Hon. Innocent Ioryoosu Anumeh - Commissioner for Housing

Hon. Innocent Ioryoosu Anumeh was born on May 5th 1955 at Tse Apenda in Gwer West Local Government Area.

Hon. Anumeh attended St. Paul’s and Theresa’s Primary Schools from 1960-1967 for his Primary Education, the

prestigious St. Francis Secondary School, Otukpo in 1972 where he obtained his WASC ‘O’ Level. He proceeded

to the London School of Accountancy in 1985 for his Association of Accounting Technicians (AAT II) in

Accountancy.

He also attended Obafemi Awolowo University Ille-Ife; Imo State University, Owerri and Ambrose Alli University,

Ekpoma where he obtained an Advance Diploma in Accounting in 2000, Postgraduate Diploma in Accounting in

2001 and an MBA in Business Administration in 2011 respectively. He is currently pursuing another MBA in Political

Science at the Benue State University, Makurdi.

Between1973 and 1996, he worked at the Nigerian Defence Academy, Kaduna; Chanchangi Motors, Kaduna;

Tilley Gyado Foods/Motors, Makurdi; and Benue Educational Supply Company limited, Makurdi as an

accountant.

He served as Secretary, Gwer West Local Government Council in 1992-1993, and later served as Chairman in the

same local Government Council from April 2006-August 2006. He represented the Gwer West Local Government

Area at the Benue State House of Assembly from 2007-2011. He was also a special Adviser to the Governor on

Assembly matters.

Hon. Anumeh, a Fellow of the Treasury Management in Nigeria, is a widely travelled person who loves travelling,

reading, meeting people and making friends.

Hon. John Tondu - Commissioner for Lands and Survey

Hon. John Timbee Tondu was born on December 12, 1974 in Guma Local Government Area of Benue State.

He completed his primary education in 1986 and had his secondary education young Tondu was at Government

Science Secondary School, Ganye, Taraba State between 1987 and 1989 and Government Science Secondary

School from 1990 - 1992. Hon. Tondu was an under-graduate at the Federal University of Technology Yola,

Adamawa State of Nigeria between 1994 and 2000 and subsequently bagged a Masters degree in Surveying

and Geo-Informatics between 2008 and 2010.

He worked with the FCDA Abuja between 2002 and 2008 as Surveyor II and I respectively. He took another

appointment with MTN as Telecom Consultant, the position he held until he was appointed Hon. Commissioner for

Lands and Survey with the Benue State Government in 2009.

Mr John Tondu is a professional member of many societies including Registered Surveyor, Surveyors Registration

Council of Nigeria (SURCON), Nigerian Institution of Surveyors (NIS), GEOSON and Rotary International Makurdi

District 9125.

He is a recipient of numerous awards and honours in Nigeria and abroad. He is married and has children.

Hon Justin Amase - Commissioner for Information and Orientation

Hon Justin Amase was born in Ikyurav-Ya District of Kwande Local Government Area of Benue State on 30

November 1964. He completed his primary school at St. Patrick's Primary School Dagba Ikyurav-ya in June 1975

and proceeded to St. Andrew Secondary School Adikpo where he graduated in 1980 in Division One in his West

African School Certificate Examination. He later proceeded to University of Jos where he obtained Bachelors of

Science degree in Economics (Second class upper division) and Masters of Science degree in Economics (Money

and Finance) in 1988 and 1991 respectively. He later proceeded for Masters of Business Administration (MBA) in

global financial management at Manchester Business School of The University of Manchester, England in 2012. He

has attended various courses in Nigeria and abroad and he is a member and fellow of many Local and

International professional bodies. He has also received several honours and awards for excellence.

He started his banking career with UBA PLC in 1986, and later moved to Credite Bank (1991 - 1994), Zenith Bank

(1994 - 2000), New Nigerian Bank (2000 - 2001), ACB International Bank (2001 - 2005) and Enterprise Bank (2006 -

2009). In his banking career, he served at various times as Head Marketing/Business Development in the

Corporate Banking Division; Branch Manager; Head, Strategy, Consumer Banking and Product Development;

Special Assistant to the Managing Directors of New Nigerian and ACB International Bank Plc; Head Corporate

Services (overseeing Administration, Human Resources and Security); Regional Manager Ikeja, Jos and Abuja, as



31

well as Acting Divisional Head Strategy and Corporate Development at Enterprise Bank Plc. He retired voluntarily

in December 2009 and went into private business and became the MD/CEO Caspian Petrogas Projects, Lagos.

He was appointed the Honourable Commissioner of Information and Orientation in 2013 by His Excellency, Rt.

Hon. Gabriel Torwua Suswam Ph. D, CON. He is happily married with four children

Hon. Aondowase Chia - Commissioner for Rural Development and Cooperatives

Hon. Aondowase Chia was born on 22 October 1968 at Tse-Chia, Mbaatirkyaa Ward in Buruku Local Government

Area of Benue State.

He attended St. John’s Primary School, Katsina-Ala from 1972–1977 where he obtained his First School Leaving

Certificate. He had his secondary education at Government Secondary School, Dekina where he obtained his

General Certificate of Education (GCE) O’ Level in 1982 and School of Nursing, Mkar from 1983–1986 where he

obtained General Nursing Certificate. He proceeded to the University of Nigeria and obtained an Advanced

Diploma in Public Administration in 2003 and a B.Sc. (Ed) in Health Education. Hon. Chia also obtained a Post

Graduate Diploma in Public Administration (PGDPA) from the University of Mkar in 2008.

Hon. Chia worked as a Nursing Officer II with Juladaco Specialist Hospital Katsina-Ala from 1986–1987; worked as

Nursing Officer I with the NKST Health Services from 1987–1990. He became the Director of Administration, Buruku

Clinic, Buruku in 1993. He was a member of Peace and Security Committee Buruku Local Government Area from

1996–2006 and, from 1988–1999; he was a tutor at the School of Nursing, Mkar.

Hon. Chia served as a Member of Save Our Souls (SOS) Yellow Fever Epidemic Monitoring Committee Oju and

Member State Immunization for Killer Diseases in the State from 1986–1987.

He also served as Chairman, Task Force on Environmental Sanitation, Buruku Local Government Area from 1988–

1989 and was a Supervisor for the National Programme on Immunisation (NPI) in 1998–2001.

Mr. Chia was a member of the Project Advisory Committee, Buruku Women Against HIV.

Hon. Aondowase Chia joined Politics in 1986 and was elected member, Benue State House of Assembly in 1992

under the platform of the Social Democratic Party (SDP), served on various committees and headed two of these

including Chairman, House Committee on Health and Human Services, Chairman, Ad hoc Committee on

Commerce and Industries and member, Ad hoc Committee on Local Government Crisis in the State. He was also

coordinator National Poverty Eradication Programme (NAPEP) from 2001–2003, Director, Benue Burnt Bricks Ltd

Otukpo, 2004–2006 and was appointed Special Assistant to the Governor on Legislative Matters in April 2010.

Hon. Chia was member, Social Democratic Party (SDP) Caucus from 1990–1993; State Publicity Secretary,

National Centre Party of Nigeria (NCPN) from 1996–1997; State Deputy Chairman, Benue North West (Zone B)

People’s Democratic Party (PDP) 1988–1999; member, People Democratic party State Caucus from 2000–2006

and Director, Directorate of Research and Planning Suswam/Lawani Campaign Organization (SULACO) 2010–

2011.

His professional and other associations include Member, National Association of Nigerian Nurses and Midwives

(NANNM); Member, Private Nurses Association (PNA); Chairman, Central Parent Teacher Association 1996–2000,

and Member, Dekina Old Boys’ Association (DOBA). Other associations which he belongs to are Tombo

Development Association, patron, Vigilante Group of Nigeria Zone B, Benue State from 1995–date; Member

former Benue State House of Assembly Forum, 1994 to date.

His hobbies include Health Talks, Volleyball and reading of magazines and newspapers.

He is married with children.

Hon. Anthony Onuh - Commissioner for Science and Technology

Hon Anthony Onuh was born on 5th March 1964 into the family of Mr and Mrs Onuh Ogbu of Okpudu Okpoga,

Okpokwu Local Government Area of Benue State. He attended the Local Government Education Authority (St.

Bernard) Primary School Ugwu Okpoga from 1972 to 1977.

Hon. Onuh attended Emmanuel Secondary School Ugnokolo from 1997—1982. He obtained Higher National

Diploma at Benue State Polytechnic Ugbokolo in 2000. In 2002 Hon. Onuh graduated from the Benue State

University with a Post Graduate Diploma in Management and also an MBA in Accounting and Finance from the

Benue State University, which he obtained in 2005. Until his current appointment as Commissioner for Science and

Technology, he was a Lecturer with the Benue State Polytechnic, Ugbokolo.



32

Hon. Anthony Onuh is happily married with children.

Hon. Mrs Esther Dzungwe - Commissioner for Water Resources

Hon. Mrs Esther Ngunengen Dzungwe was born on 10 July 1963 to the family of Aban Ikpa Mbagbera in

Vandeikya Local Government Area of Benue State. She attended the Local Government Education Authority

Primary School Gboko, Central Gboko, where she obtained her First School Leaving Certificate in1977. In 1978,

she transferred to Queen of the Rosary Secondary School Gboko and graduated in 1982 with a General

Certificate of Education. Between 1982 and 1989, Hon. Dzungwe attended the University of Jos, where she

graduated with a Bachelor of Agriculture in Animal Production.

Hon. Mrs Dzungwe began her working carrier as a NYSC Lecturer at the College of Agriculture, Yandev. After her

national service she was retained as Graduate Assistant from 1990 to 1992. She left College of Agriculture in 1992

to Chair the Board of Directors of Wan-Dan and Devester Nigeria Limited with core responsibilities for transport

and cement distribution and general contractor. She joined politics in 2008 and was appointed as Secretary to

the Ushongo Local Government Council from 2008 to 2010. She was appointed as Supervisory Councillor with

responsibility for Works and Housing from 2011 to 2012.

In 1989 Mrs Dzungwe published, among others, her academic work: Composition of Plants Feeds to Rabbits in

Benue State. Jr Appl. Rabb. Res. 12:159-170. She is a member of several professional bodies and development

association. She is a registered Animal Scientist (RAS), a member of Benue Cement Transporters Association

(BTCA). She is also a Patron of Boys Brigade of Nigeria (BB) and NKST Choir Gboko Classis, and also member PDP

Cuscus, Benue State PDP Elders Forum from 2007 to date.

She has attended many workshops/seminars and is widely travelled. She loves reading, politicking and socialising.

She has received meritorious awards in the country and was the first State Deputy Chairman of the Peoples

Democratic Party in Benue State. Hon. Mrs Dzungwe was appointed Commissioner for Water Resources in May

2014. She is blessed with children.

Mrs Elizabeth Allagh - Commissioner for Women Affairs and Social Development

The Commissioner for Women Affairs, Mrs Elizabeth Nguvan Allagh was born on 15 October, 1960 at Mkar in

Gboko Local Government Area of Benue State.

She attended NKST Transfer School, Yaikyo between 1967–1969 and St. Paul’s Anglican Primary School, Jos from

1970–1972 and later NKST Primary School Wadata, Makurdi from 1972–1973 where she obtained her First School

Leaving Certificate. She had her secondary school education at St. Peter’s Secondary School, Adikpo from 1974–

1976 and also proceeded to Tofi Memorial Grammar School Gboko from 1977–1979 where she obtained her West

African School Certificate.

She later proceeded to College of Agriculture, Yandev from 1986–1987 where she obtained her National Diploma

certificate (ND). In 2005, Mrs. Allagh enrolled into the Benue State University Makurdi and graduated in 2010 with

B.A. Hons (B.Ed. Management).

Mrs Allagh started work as a Clerical Assistant with Benue State Health Management Board, Makurdi between

1980 and 1984. She was later transferred to the Ministry of Agriculture and Natural Resources as Agriculture

Superintendent in 1994 and later promoted to the position of Higher Agriculture Superintend in 1989, Senior

Agricultural Superintendent in 1992, and Principal Agricultural Superintendent II in 1995. In 1999, she was again

promoted to Agricultural Superintendent I, Assistant Chief Agricultural Superintendent in 2002 and served as Chief

Agricultural Superintendent between 2005 and 2011, when she was appointed Commissioner for Women Affairs

and Social Development.

She is happily married with children.

Hon. John Ilodu Ngbede - Commissioner for Works and Transport

Mr Ngbede was born of the family of Obagaji in Agatu Local Government Area on 23rd October 1962.

He was educated at LGEA Primary School, Obagaji, 1968—75; Community Secondary School, Otobi, 1975—80;

and the University of Jos, 1985-90 where he graduated with a Bachelor of Science degree inChemistry.

Mr Ngbede was a class teacher at Methodist High School, Obagaji, 1980—81; tutor, Community Secondary

School, Ugbakwa, during the National Youth Service Corps program, 1990-91. From 1991 to 1993 he worked as a

Senior Agriculture Superintendent with Apa Local Government Council. He was once Chairman, Nigeria Union of

Local Government Employees, NULGE, Apa Chapter. He also served as Supervisory Councillor for Health, Apa



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Local Government Council, 1995-96; Chairman, Apa Local Government Council, 1996-97 as well as member,

Governing Board, National Horticultural Research Institute, Ibadan, 2000—4. He was appointed Commissioner for

Water Resources and Environment from 2007–2011.

In the political sphere, he was member, PDP Gubernatorial Campaign Organisation in Benue State, 1999, Director

of Media, Dr. George Akume Re-election Campaign Organisation, and Director of Administration, Rt. Hon Gabriel

Suswam Governorship Campaign Organisation.

A Knight of John Wesley (KJN), member of several clubs and organizations, he has also attended many seminars,

symposia and workshops within and outside the country.

He is married and enjoys reading, travelling, reading novels and games

Hon. Egiri Idaah - Commissioner for Youth and Sports

RT. Hon. Egbiri Idaah was born in Iyakom Oboru, Igede Central District, Oju Local Government Area of Benue

State on 12th December, 1964. He completed his primary school at Wesley Transferred School Oboru Centre in

June 1978 and proceeded to Government Secondary School, Ikachi where he obtained his O’level GCE/WAEC

Certificate in 1983. A year later, he was enlisted into the Nigerian Police Force where he served from 1984—1998

in the following capacities: General Duties; Criminal Investigation Bureau (C.I.B) and Administrative Officer.

RT. Hon. Idaah went to the College Of Education Katsina-Ala and obtained the National Certificate in Education

(NCE) in 1994, while still in the Police service.

He later engaged in active politics after voluntarily retiring from the Police Force and was subsequently elected

as member of the Benue State House of Assembly, to represent Oju State Constituency for two terms from 1999 to

2007.

While in the House of Assembly, he obtained B.Sc in Government and Public Administration from Imo State

University, Owerri where he enrolled in 2003 and currently pursuing M.Sc in Political Science in Benue State

University.

RT. Hon. Idaah has attended many seminars and workshops and has been awarded certificates of excellence

both home and abroad. He is a philanthropist who has served in communities, impacted the lives of many and

has contributed to the socio-economic wellbeing of many Nigerians.

He is happily married and blessed with children.

11. RISK FACTORS AND MITIGANTS


34

11 RISK FACTORS AND MITIGANTS

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 repay 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 from their own views or obtain such professional advice as

they deem appropriate, before making a decision in respect of the Bonds.

11.1 Country Risks

i. Political Risk

There is a concern about the ongoing spate of insecurity in the country particularly in the North Eastern part

of the country. Concerns are also high as to the risk involved in investing in a state-issued security around

this time given that this period represent an election year.

Mitigating Factor:

The Federal Government has also increased its security presence in the affected Northern areas and across

the nation. The Government has also promised to stem the growing insecurity in the country and ensure the

protection of lives and property.

ii. Economic Risk

The Nigerian economy was impacted by the global recession which created a significant downturn in the

capital markets as well as a liquidity squeeze, creating a challenging operating environment. A prolonged

recession put further constraints on business spending, investments and lending which in turn reduced

activities in the private sector, which has had an impact on the State’s tax revenues.

The Nigerian economy is largely dependent on oil production and is directly affected by fluctuations in the

global prices of oil. According to the World Bank, oil accounts for circa 17.0% of Nigeria’s GDP, over 95.5%

of its export earnings and approximately 81.0% of its budgetary earnings.

Mitigating Factor:

The global financial crisis has slowed down significantly. Economies are beginning to emerge from

recession and are witnessing improved performance. In Nigeria, the current administration remains

committed to the wide-ranging reforms aimed at diversifying the economy and increasing macro-

economic stability. The Central Bank of Nigeria (CBN) continues to introduce reforms aimed at stimulating

and stabilising the economy and creating a secure and healthy platform for growth.

11.2 Macroeconomic Risks

i. 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 mostly 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.



35

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 policy which has kept inflation rate at

single digits in 2014 and we expect this trend to continue in the short term.

ii. 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 year. It is expected that this policy will be maintained, thereby mitigating this risk.

iii. 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 sector have usually hit Nigeria hard because of the country’s mono-product

economy. A decline in the price of crude oil will reduce the funds available for distribution via the FAAC

account. The State, like most of the other Nigerian States is heavily reliant on the FAAC account, as its main

source of revenue, and will experience a drop in revenue with a decline in the price of crude oil.

Mitigating Factor:

The price of crude oil is beyond the control of Benue 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 federation account. We do not see any major risk to the

sustainability of the IGR of the State at current levels.

11.3 Political Risks at the State Level

i. Sovereign Risk

Benue 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 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.

ii. 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 incoming Administration may make amendments to utilization of proceeds of the

offer stated in the prospectus, but with the prior approval of the Securities and Exchange Commission.

Mitigating factor:

The State’s House of Assembly has passed a law enabling the offer to proceed. Furthermore, regardless of

the administration in the State, or the use to which the proceeds of the Bond are put, the repayment



36

source is from the FAAC account. Investors can therefore reasonably expect repayment of principal and

receipt of the coupons due to them as and when they become due.

Iii. 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

possibility that the statutory and regulatory environment may change during the life of the Bond and the

policies that have created an enabling environment for the issuance of the Bonds may be amended.

Mitigating Factor:

The Benue 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.

11.4 Risks Relating to the Bonds

i. Reduced FAAC allocation

There is a risk that due to falling oil prices, FAAC allocation will reduce which may negatively impact the

ability of the State to meet its obligations.

ii. Internally Generated Revenues

The state’s internally generated revenues may not attain the projected growth rate and thus impact the

States’ ability to redeem the Bonds as at when due.

Mitigating Factor:

The Benue State Government is currently putting in place various measures to cushion the effect of

dwindling FAAC revenues as a result of falling oil prices. In addition, both the state and federal government

are currently diversifying the economy to ensure that more revenues are generated from non-oil related

sources. The bond repayment takes a first charge (ISPO) on the revenue of the State and as such will be

deducted prior to other obligations of the State. As such even a deduction in revenue allocation of the

State, it will still be sufficient enough to cover the bond repayment.

11.5 Structural Risks

i. Liquidity risk:

There is a risk that when the Bonds are listed, the demand for them may 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 FMDQ trading platforms and will also be openly traded at the Over-

The-Counter market which 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.

ii. 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 (i.e ranked higher than any other obligation) of the State, payable

from and secured by a first line charge on the State’s revenues. The monthly appropriation from the State’s

revenues toward the debt service obligations in respect of the Bonds is authorized by a resolution duly



37

adopted by the State House of Assembly, dated 20th May 2014. 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.

iii Environmental Risk:

Natural disasters could occur and negatively impact the expected revenue streams or destroy some of the

projects under construction. This will decrease the projected cash flows which the State expects to

generate. There may also be negative environmental impacts of respective projects proposed by the

Benue State Government.

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. The State is also

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.

Furthermore, any impact on projected revenues is mitigated by the fact that the State will service its

obligations under the Bond from the federation account allocation and not on project specific revenues

12. HISTORICAL FINANCIAL INFORMATION OF BENUE STATE


38

12 HISTORICAL FINANCIAL INFORMATION OF BENUE STATE

12.1 Reporting Accountant Report



39

Statement of Significant Accounting Policies

The significant accounting policies adopted by Benue State Government of Nigeria are as follows:

i. Basis of accounting

The financial statements have been prepared using modified cash basis. Transactions are recorded

only when money is received and paid within the given period, whether or not the receipts and

payments are in respect of goods supplied or services rendered during that period and whether

they relate to recurrent or capital expenditure or revenue.

ii. Revenue

The revenue of the State consists of the following:

o Statutory allocation

o Internally generated revenue

o Capital receipts.

iii. Expenditure

The State's expenditure comprises:

o Recurrent expenditure

o Capital expenditure.

iv. Capital expenditure

In line with the modified cash basis of accounting, capital expenditures are recognised in the year

of occurrence only. No cumulative value of fixed assets and depreciation are disclosed in the

financial statements.

v. Investments

Investments are managed by Benue Investment & Property Company Limited (BIPC), a Special

Purpose Vehicle for managing the State's investment in both quoted and unquoted companies. The

investments are stated at nominal value. Investments which form part of Capital Development Fund

are expensed under the cash basis of accounting and disclosed in the Statement of assets and

liabilities.

vi. Long term loans

Long-term internal and foreign loans written off under the cash basis of accounting are re-stated in

the Statement of assets and liabilities in order to accommodate the full disclosure in line with the

standard reporting format for Federal, States and Local governments in Nigeria.

vii. Assets and liabilities

Assets are stated at their net values, liabilities are recognised in full.

viii. Foreign currencies

Transactions in foreign currencies are translated to Naira at the rates of exchange ruling at the dates

of the transaction. Foreign currency balances are converted to Naira at the rates of exchange

ruling at the Statement of assets and liabilities date.



40

12.2 Statement of Assets and Liabilities

<---------------------------------- As at 31 December -------------------------------->

2013 2012 2011 2010 2009

Notes N'000 N'000 N'000 N'000 N'000

ASSETS:

Cash & bank balances 6.1 6,668,335 9,074,798 8,284,597 3,071,774 2,666,756

Investments 6.2 70,975 70,975 70,975 86,744 86,744

Other assets 6.3 - 414,033 16,247,751 7,127,457 5,156,676

Other accounts 6.4 - - - 32,249 652,154 Excess of operating liabilit ies

over assets 6.5 23,749,943 25,992,209 28,244,847 18,610,374 20,335,753

Total Assets 30,489,253 35,552,015 52,848,171 28,928,598 28,898,083

LIABILITIES:

Public funds

Consolidated Revenue Fund 472,611 74,394 1,360,616 7,681,053 5,399,957

Capital Development Fund 6,266,699 9,485,412 23,242,708 2,637,171 3,162,373

6,739,309 9,559,805 24,603,324 10,318,224 8,562,330

Debt obligations

Internal loans 6.6 12,431,941 12,491,837 7,918,112 4,641,840 6,300,000

Development Bond 2011/2016 6.7 6,283,333 8,883,333 11,483,333 - -

Foreign loans 6.8 5,034,669 4,617,039 8,843,402 13,968,534 14,035,753

23,749,943 25,992,209 28,244,847 18,610,374 20,335,753

Total Liabilities 30,489,253 35,552,015 52,848,171 28,928,598 28,898,083



41

12.3 Statement of Consolidated Revenue Fund

<--------------------------- Year ended 31 December ------------------------->

2013 2012 2011 2010 2009

Notes N'000 N'000 N'000 N'000 N'000

REVENUE

Statutory allocation 6.9 61,564,603 53,369,852 54,060,625 36,468,211 34,037,110

Internally generated revenue 6.10 9,497,032 14,617,528 5,455,059 2,795,043 4,580,214

Miscellaneous revenue 6.11 1,837,857 1,063,392 - 5,610,301 1,596,875

72,899,492 69,050,772 59,515,684 44,873,555 40,214,199

EXPENDITURE

Personnel costs 6.12 33,035,183 37,713,665 18,694,843 4,028,502 3,736,342

Overheads cost 6.13 7,432,679 23,694,427 15,682,785 11,830,732 11,275,294

Consolidated revenue fund

charges 6.14 7,016,532 7,879,868 3,577,447 17,038,596 8,959,993

47,484,394 69,287,960 37,955,075 32,897,830 23,971,629

Surplus of revenue over

expenditure for the year 25,415,098 (237,188) 21,560,610 11,975,725 16,242,570

Consolidated Revenue Fund

as at 1 January 74,394 1,360,616 7,681,053 5,399,957 5,462,889

Appropriations:

Repayment of Internal loans 6.6.3 (8,523,696) (2,947,218) (528,675) (4,485,740) (8,178,192)

Repayment of Bond

(Principal+Interest) 6.7.1 (4,420,698) (4,420,698) (2,578,742) - -

Repayment of Foreign loans 6.8.2 (72,487) (12,681,118) (5,196,591) (208,889) (127,310)

Transfer to/(from) Capital

Development Fund (CDF) (12,000,000) 19,000,000 (19,577,038) (5,000,000) (8,000,000)

Consolidated Revenue Fund

as at 31 December 472,611 74,394 1,360,616 7,681,053 5,399,957



42

12.4 Statement of Capital Development Fund


2013 2012 2011 2010 2009

Notes N'000 N'000 N'000 N'000 N'000

Capital receipts:

VAT Revenue 8,982,190 8,091,044 7,420,796 6,361,423 5,451,611

Transfer from/(to)

Consolidated Revenue Fund 12,000,000 (19,000,000) 19,577,038 5,000,000 8,000,000

Internal loans 6.6.2 8,463,800 7,355,150 3,804,948 2,344,247 5,500,000

Proceeds from bond

issuance 6.7.1 - - 13,000,000 - -

Foreign loans 6.8.3 490,117 3,541,829 - 141,670 286,045

Grants and reimbursements 6.15 9,000 5,896,527 2,591,039 288,968 348,718

revenue - 5,083,213 2,028,518 503,333 -

Total capital receipts 29,945,107 10,967,763 48,422,339 14,639,641 19,586,374

Capital expenditures:

Economic sector 6.16 20,449,267 5,958,539 4,251,073 4,201,684 9,442,803

Social serv ice sector 6.17 10,695,486 15,165,648 18,382,787 6,827,455 5,044,552

Env ironmental sector 6.18 632,408 785,262 3,453,470 3,466,542 2,601,877

sector 6.19 1,386,659 2,815,610 1,729,473 669,162 600,077

33,163,820 24,725,059 27,816,803 15,164,842 17,689,309

Net capital (expenditure)/receipts (3,218,713) (13,757,296) 20,605,536 (525,202) 1,897,065

Capital Development Fund

as at 1 January 9,485,412 23,242,708 2,637,171 3,162,373 1,265,308

Capital Development Fund

as at 31 December 6,266,699 9,485,412 23,242,708 2,637,171 3,162,373



43

12.5 Statement of Cash Flows


2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

Cash flows from operating activities:

Receipts

Statutory allocation 61,564,603 53,369,852 54,060,625 36,468,211 34,037,110

Value added tax 8,982,190 8,091,044 7,420,796 6,361,423 5,451,611

Internally generated revenue 9,497,032 14,561,234 5,455,059 2,794,378 4,568,529

Grants and reimbursements 9,000 5,896,527 2,591,039 288,968 348,718

Miscellaneous 1,837,857 1,063,392 - 6,113,634 1,596,875

81,890,682 82,982,049 69,527,519 52,026,614 46,002,843

Payments

Personal costs 33,035,183 37,713,665 18,694,843 4,028,502 3,736,342

Consolidated revenue fund

charges 7,016,532 7,879,868 3,577,447 17,038,596 8,959,993

Overhead costs 7,432,679 23,694,427 15,682,785 11,830,732 11,275,294

47,484,394 69,287,960 37,955,075 32,897,830 23,971,629

Net cash flows from operating

activities 34,406,288 13,694,089 31,572,445 19,128,784 22,031,214

Cash flows from investing activities:

Capital expenditures (33,163,820) (24,725,059) (27,816,803) (15,164,842) (17,689,309)

Net (increase)/decrease in

advances 414,033 15,833,718 (9,120,294) 1,970,781 66,329

Net increase in investments

and current accounts - - 48,018 (1,543,375) (222,208)

Net cash flows from investing

activities (32,749,787) (8,891,341) (36,889,079) (14,737,436) (17,845,188)

Cash flows from financing activities:

Proceeds from internal loans 8,463,800 7,355,150 3,804,948 2,344,247 5,500,000

Proceeds from bond

issuance - - 13,000,000 - -

Proceeds from external loans 490,117 3,541,829 - 141,670 286,045

Div idends received - 56,296 - 666 11,684

Repayment of loans (13,016,881) (20,049,034) (8,304,008) (4,694,629) (8,305,502)

Net cash flows from financing

activities (4,062,964) (9,095,759) 8,500,940 (2,208,046) (2,507,773)

Net increase/(decrease) in

Cash and cash equivalents (2,406,463) (4,293,011) 3,184,306 2,183,301 1,678,253

Adjustments affecting

cash and bank balances - 5,083,213 2,028,517 (1,778,283) (4,294,456)

Cash & cash equivalents as

at I January 9,074,798 8,284,597 3,071,774 2,666,756 5,282,959

Cash & cash equivalents as

at 31 December 6.1 6,668,335 9,074,798 8,284,597 3,071,774 2,666,756



44

12.6 Notes to the Account

<---------------------------------- As at 31 December -------------------------------->

2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.1 CASH AND BANK BALANCES

6.1.1 Summary

Cash and bank balances 1,106,284 3,512,746 7,801,264 2,588,441 2,666,756

5,562,051 5,562,052 483,333 483,333 -

6,668,335 9,074,798 8,284,597 3,071,774 2,666,756

6.1.2 Debit balances in Loan accounts

Internal loans:

Access Bank Plc 333,333 333,333 333,333 333,333 -

Guaranty Trust Bank Plc 150,000 150,000 150,000 150,000 -

Union Bank of Nigeria Plc 165,792 165,792 - - -

649,126 649,126 483,333 483,333 -

Foreign loans:

Paris Club 4,912,925 4,912,926 - - -

5,562,051 5,562,052 483,333 483,333 -

6.2 INVESTMENTS

6.2.1 Summary

Quoted investments (note 6.2.2) 70,975 70,975 70,975 70,975 70,975

Unquoted investments (note 6.2.3) - - - 15,769 15,769

70,975 70,975 70,975 86,744 86,744

6.2.2 Movement

Balance as at 1 January 70,975 70,975 86,744 86,744 86,744

Disposals/write offs - - (15,769) - -

Balance as at 31 December 70,975 70,975 70,975 86,744 86,744

6.2.3 Quoted Investments

Mainstreet Bank Limited (Afribank) 33,918 33,918 33,918 33,918 33,918

AIICO Insurance Plc 7,952 7,952 7,952 7,952 7,952

Ashaka Cement Plc 449 449 449 449 449

19,521 19,521 19,521 19,521 19,521

Conoil Plc 228 228 228 228 228

Dunlop Nigeria Plc 17 17 17 17 17

Fidelity Bank Plc 183 183 183 183 183

First Bank of Nigeria Plc 51 51 51 51 51

Julius Berger Nig Plc 922 922 922 922 922

Nigerian Energy Sector Fund 4,000 4,000 4,000 4,000 4,000

PZ Industries Plc 2 2 2 2 2

Sterling Bank Plc 2,154 2,154 2,154 2,154 2,154

Trade Bank Plc 3 3 3 3 3

UAC Nig. Plc 960 960 960 960 960

Union Bank of Nigeria Plc 123 123 123 123 123

United Bank for Africa Plc 63 63 63 63 63

United Nigeria Textile Limited 423 423 423 423 423

Savannah Bank plc 6 6 6 6 6

70,975 70,975 70,975 70,975 70,975

We were informed that the debit balances in loan accounts represent over-repayment made to the mentioned

local banks and foreign agencies in respect of debt obligations. We are unable to confirm the recoverability of the

amounts due from the respective banks as no relevant information was prov ided.

Loan accounts with debit balances

(note 6.1.2)

Benue Cement Company Limited

(Dangote Cement)



45

6 . NOTES TO THE FINANCIAL STATEMENTS (CONT'D)

<---------------------------------- As at 31 December -------------------------------->

2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.2.3 Unquoted investments

Hotel Cross Ben Ltd - - - 350 350

Hill Station Hotel Ltd - - - 57 57

Holman Brothers Nig. Ltd - - - 3,561 3,561

Agro Millers Ltd - - - 2,000 2,000

St irling Civ il Engineering - - - 2,688 2,688

Nig. Elect. Supply Corporation - - - 3,073 3,073

Kaduna Textiles Ltd - - - 4,040 4,040

- - - 15,769 15,769

6.2.4 Benue Investment & Property Company Limited (BIPC)

6.2.5 Valuation of investments

<------------------------------------ As at 31 December ------------------------------>

2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.3 OTHER ASSETS

Sundry advances - - - 1,050,018 862,520

Cash advances - Judiciary - - - 4,700 (300)

Car loan advance balance - - 60,294 - -

Car loan defaulters - - 8,730 - -

- 414,033 16,178,727 6,072,739 4,294,456

- 414,033 16,247,751 7,127,457 5,156,676

<---------------------------------- As at 31 December -------------------------------->

2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.4 TREASURY CLEARANCE AND

Staff housing fund - - - (60,580) (49,614)

Small Scale Industries - - - 7,467 7,483

Treasury clearance - - - 76,087 685,011

Other government Funds - - - 9,275 9,274

- - - 32,249 652,154

6.5 EXCESS OF OPERATING LIABILITIES OVER ASSETS

Internal loans (note 6.6) 12,431,941 12,491,837 7,918,112 4,641,840 6,300,000

Development Bond 2011/2016 (note 6.7) 6,283,333 8,883,333 11,483,333 - -

Foreign loans (note 6.8) 5,034,669 4,617,039 8,843,402 13,968,534 14,035,753

23,749,943 25,992,209 28,244,847 18,610,374 20,335,753

We were unable to determine the existence, ownership and valuation of investments as at the rev iew dates as the

necessary information were not available for verification. However, the investments were stated at nominal values

as there was no record of cost.

We were unable to confirm the existence and valuation of advances for the five years ended 31 December 2013.

Consequently, they may not represent any asset.

BIPC was set-up as a Special Purpose Vehicle for managing the State's investment in both quoted and unquoted

companies. Investments are held by BIPC on behalf of Benue State Government.

Other assets/advances



46


<---------------------------------- As at 31 December -------------------------------->

2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.6 INTERNAL LOANS

6.6.1 Summary

Balance as at I January 12,491,837 7,918,112 4,641,840 6,300,000 8,978,192

Additions (note 6.6.2) 8,463,800 7,355,150 3,804,948 2,344,247 5,500,000

Debit balances reclassified (note 6.1.2) - 165,793 - 483,333 -

Repayments (note 6.6.3) (8,523,696) (2,947,218) (528,675) (4,485,740) (8,178,192)

12,431,941 12,491,837 7,918,112 4,641,840 6,300,000

6.6.2 Additions

Access Bank Plc - - - 220,415 -

Central Bank of Nigeria - 1,000,000 - - -

First Bank of Nigeria Plc - 2,000,000 2,120,000 1,000,000 5,500,000

Nexim Bank - - - 499,002 -

Stanbic IBTC Bank Plc 463,800 - 500,000 600,000 -

Unity Bank Plc - - - 24,830 -

Union Bank of Nigeria Plc - 452,273 1,184,948 - -

United Bank for Africa Plc 8,000,000 3,902,877 - - -

8,463,800 7,355,150 3,804,948 2,344,247 5,500,000

6.6.3 Repayments

Access Bank Plc - - - 753,749 2,982,215

Central Bank of Nigeria 270,000 83,333 - - -

Ecobank Nigeria Plc - - - - 850,000

First Bank of Nigeria Plc 2,479,459 1,091,111 176,667 2,520,833 1,666,667

First City Monument Bank Plc - - - 150,000 -

Guaranty Trust Bank Plc - - - 750,000 1,121,461

Stanbic IBTC Bank Plc 357,528 - 17,462 311,158 -

Union Bank of Nigeria Plc - 1,468,467 334,547 - 666,164

United Bank for Africa Plc 5,416,709 304,307 - - 891,685

8,523,696 2,947,218 528,675 4,485,740 8,178,192

6.6.4 Analysis by lender

Access Bank Plc - - - - 200,000

Central Bank of Nigeria 646,667 916,667 - - -

First Bank of Nigeria Plc 4,351,930 6,831,389 5,922,500 3,979,167 5,500,000

First City Monument Bank Plc 450,000 450,000 450,000 450,000 -

Guaranty Trust Bank Plc - - - - 600,000

Stanbic IBTC Bank Plc 776,653 670,381 670,381 187,843 -

Unity Bank Plc 24,830 24,830 24,830 24,830 -

Union Bank of Nigeria Plc - - 850,401 - -

United Bank for Africa Plc 6,181,861 3,598,570 - - -

12,431,941 12,491,837 7,918,112 4,641,840 6,300,000



47


<---------------------------------- As at 31 December -------------------------------->

2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.7 DEVELOPMENT BOND 2011/2016

6.7.1 Principal

Balance as at I January 8,883,333 11,483,333 - - -

Additions - - 13,000,000 -

Repayments (2,600,000) (2,600,000) (1,516,667) - -

Balance as at 31 December 6,283,333 8,883,333 11,483,333 - -

6.7.2 Interest

Balance as at I January 6,220,715 8,041,413 - - -

Additions - - 9,103,488 -

Repayments (1,820,698) (1,820,698) (1,062,075) - -

Balance as at 31 December 4,400,017 6,220,715 8,041,413 - -

10,683,350 15,104,048 19,524,746 - -

<---------------------------------- As at 31 December -------------------------------->

2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.8 FOREIGN LOANS

6.8.1 Summary

Balance as at I January 4,617,039 8,843,402 13,968,534 14,035,753 13,877,018

Repayments (note 6.8.2) (72,487) (12,681,118) (5,196,591) (208,889) (127,310)

Additions (note 6.8.3) 490,117 3,541,829 - 141,670 286,045

Debit balances reclassified (note 6.1.2) - 4,912,926 - - -

- - 71,459 - -

Balance as at 31 December 5,034,669 4,617,039 8,843,402 13,968,534 14,035,753

6.8.2 Repayments

African Development Bank 4,579 4,624 - - -

IBRD - Universal Basic Education (UBE) - 421,558 - - -

- 323,589 - - -

IDA 67,908 15,987 - - -

HIV/AIDS Programme Dev. Project - - - -

London Club - 421,065 - - -

Multilateral - - 208,889 127,310

Paris Club - 11,339,208 5,196,591 - -

- 155,087 - - -

72,487 12,681,118 5,196,591 208,889 127,310

6.8.3 Additions

African Development Bank - 259,943 - - -

IBRD - Universal Basic Education - - - 139,544 -

490,117 3,281,886 - 2,126 286,045

490,117 3,541,829 - 141,670 286,045

Total (Principal + Interest)

In 2011, the State Government issued a N13 billion Development Bond with a tenure of 5 years, at a fixed rate of

14%, to finance on-going projects and refinance existing loan obligations. The Bond is repayable semi-annually on

31 May and 30 November. The last installment is due for repayment on 31 May 2016.

International Development

IBRD - Local Empowerment &

Env ironmental Management (LEEMP)


United Nations Development

Programme (UNDP)

Adjustment for difference in opening



48


<---------------------------------- As at 31 December -------------------------------->

2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.8 FOREIGN LOANS (CONT'D)

6.8.4-

African Development Bank 1,107,740 1,112,319 857,000 857,000 204,635

IBRD - UBE 34,186 34,187 455,744 455,745 281,521

- - 323,589 323,589 455,745

IDA 3,892,743 3,470,533 204,635 204,635 321,463

HIV/AIDS Programme Dev. Project - - - 155,086

Paris Club - - 6,426,284 11,622,874 11,622,874

Mult ilateral - - - (71,460) 137,429

London Club - - 421,064 421,064 -

UNDP - - 155,086 155,087 857,000

5,034,669 4,617,039 8,843,402 13,968,534 14,035,753

6.8.5

Multilateral:

National FADAMA (75%) - - 4,217 10,407 18,302

National Agric Tech. Support - - 2,499 5,649 9,446

National Water Rehabilitation - - 3,280 29,734 91,660

Health System - - 3,436 30,923 97,268

- - 13,433 76,714 216,677

International Development Association (IDA):

Ist Education 1,242 2,484 3,905 4,906 6,199

Health System Development Project II 255,614 261,785 266,477 101,096 102,139

HIV/AIDS Programme Dev. Project 1,134,202 1,162,662 1,216,486 1,159,031 1,176,077

IBRD - LEEMP 1,190,384 1,190,921 1,198,991 1,140,299 1,136,077

Universal Basic Education 282,619 302,155 304,434 289,312 288,410

Third National FADAMA 976,053 702,441 599,808 309,828 113,652

Second HIV/AIDS programme 390,638 240,669 - - -

Community and Social Dev Project - - 469 - -

Health System Dev (Additional) 537,458 549,811 561,539 534,023 541,102

4,768,210 4,412,929 4,152,108 3,538,495 3,363,656

Total 4,768,210 4,412,929 4,165,542 3,615,208 3,580,333

Exchange rate N155.2/US$ N155.3/US$ N156.2/US$ N148.67/US N147.6/US$

6.8.6 Unreconciled differences

<---------------------------------- As at 31 December -------------------------------->

2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

Balance per audited financial statements 121,744 (295,887) 8,843,402 13,873,556 14,035,753

Balance per DMO Schedules (note 6.8.5) 4,768,210 4,412,929 4,165,542 3,615,208 3,580,333

Difference (4,646,466) (4,708,816) 4,677,860 10,258,348 10,455,420

IBRD - LEEMP

Analysis by lender (Nigerian Naira) -

Based on BNSG records

Analysis by lender (Nigerian Naira) -

Based on DMO schedule

However, we were informed that an external consultant has been appointed by the State Government to carry out

a reconciliation of the balances with Debt Management Office (Federal); the exercise is yet to be concluded.


We were unable to ascertain the extent of the State's liability on external loans as at the financial year-ends as the

records maintained by the State were not in agreement with the audited financial statements as follows:



49

<---------------------------- Year ended 31 December ------------------------>

2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.9 STATUTORY ALLOCATION

6.9.1 Summary

Federation account allocation (note 6.9.2)47,606,565 37,964,031 36,996,688 26,983,618 25,805,717

Excess crude & Others (note 6.9.3) 13,958,038 15,405,821 17,063,937 9,484,593 8,231,393

61,564,603 53,369,852 54,060,625 36,468,211 34,037,110

6.9.2 Federation account allocation

January 3,654,082 3,220,308 2,570,181 1,659,776 2,979,100

February 3,491,999 2,627,907 2,596,763 1,984,419 2,035,919

March 3,706,907 2,830,168 2,670,305 1,602,826 1,695,197

April 3,994,637 3,496,639 2,532,975 1,656,918 1,605,151

May 4,076,234 3,119,425 2,364,484 2,471,910 2,002,834

June 3,880,120 3,319,121 2,835,968 2,355,212 3,163,779

July 4,750,829 3,280,963 3,402,298 2,530,146 3,317,008

August 3,870,245 3,378,685 3,764,109 2,528,683 2,461,288

September 4,080,995 3,167,468 4,154,991 2,548,960 1,651,205

October 4,174,572 3,220,506 3,916,593 2,551,450 1,676,787

November 3,713,173 3,390,327 3,272,249 2,545,568 1,202,029

December 4,212,772 2,912,514 2,915,774 2,547,749 2,015,421

47,606,565 37,964,031 36,996,688 26,983,618 25,805,717

6.9.3 Excess crude & Others

Excess crude 3,154,304 3,667,910 3,141,328 5,987,819 7,626,982

Exchange rate gain - 512,131 850,658 1,151,494 604,411

Federation account augmentation 6,606,453 3,785,140 4,417,725 2,345,280 -

Subsidy savings (Sure-P) 2,889,983 1,680,827 - - -

NNPC refund 1,307,298 1,217,125 442,591 - -

Other refund - 4,542,688 8,211,635 - -

13,958,038 15,405,821 17,063,937 9,484,593 8,231,393

6.10 INTERNALLY GENERATED REVENUE

Taxes 5,247,305 7,903,321 3,125,335 1,778,746 1,138,571

Fines & fees 425,817 339,102 567,152 260,645 369,979

Licenses 39,756 33,510 29,332 24,936 19,751

Earnings & sales 318,585 302,540 182,387 705,725 1,036,913

Rent on Government property 129 3,540 681,846 24,326 48,437

Proceeds from State investments 406,018 - - - 1,954,878

Interest & div idends - 56,294 - 665 11,685

3,059,422 5,979,221 869,007 - -

9,497,032 14,617,528 5,455,059 2,795,043 4,580,214

Revenue from parastatals (see note

below)

Agencies for operations during the period under review. The corresponding debit is in Consolidate Revenue Fund

Charges (note 6.14).



50



2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.11 MISCELLANEOUS REVENUE

Refunds - 274,280 - 10,175 19,879

Unspecified revenue 1,835,628 789,028 - 1,000,108 197,797

Rural infrastructure development levy 2,229 84 - 9 23

- - - - 66,383

- - - 4,600,009 1,312,793

1,837,857 1,063,392 - 5,610,301 1,596,875

6.12 PERSONNEL COSTS

Ministries/Departments 31,427,239 33,935,625 17,310,460 3,239,526 3,025,324

Political office holders 1,607,944 3,778,040 1,384,383 768,976 697,018

LG Pension Board - - - 20,000 14,000

33,035,183 37,713,665 18,694,843 4,028,502 3,736,342

6.13 OVERHEAD COSTS

Education serv ices 46,579 72,705 63,674 41,205 223,344

Transport serv ices 22,889 76,327 41,112 64,894 71,664

Health and human resources 18,762 22,723 114,592 12,219 199,338

Manufacturing and industries - 50,910 30,351 2,575,621 2,981,742

Agricultural and natural resources 48,057 34,355 10,272 9,720 70,345

Power and rural electricity - - - 20,818 19,454

Information and communication 213,902 838,285 61,908 16,537 81,084

Housing, Urban and country planning 25,475 136,830 44,639 11,908 102,714

Water resources serv ices 119,970 245,806 113,880 99,392 4,208

Youth and social development 27,661 101,519 182,111 45,722 202,130

Subvention to parastatals 709,620 700,891 849,370 659,489 -

General administration 6,199,764 21,414,077 14,170,875 8,273,204 7,319,272

7,432,679 23,694,427 15,682,785 11,830,732 11,275,294

6.14 CONSOLIDATED REVENUE FUND CHARGES

Pension and gratuities 3,104,189 1,194,077 1,859,070 1,338,597 1,342,524

Subvention to Parastatals 809,620 700,891 849,370 11,999,479 7,435,272

3,059,422 5,979,221 869,007 - -

Consolidated revenue fund charges 43,301 5,679 - 3,700,520 182,197

7,016,532 7,879,868 3,577,447 17,038,596 8,959,993

Local government counterpart

contribution for rural infrastructure

development

Revenue retained by Parastatals relates to revenue generated and retained by the various Ministries, Departments

and Agencies for operations during the period under rev iew. The corresponding credit is in Internally Generated

Revenue (note 6.10).

Revenue retained by parastatals (see

note below)

Refund of external loan over-

deduction - May 2009



51



2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.15 GRANTS AND REIMBURSEMENTS

GCC from MDGs Programme - 1,200,000 919,797 - -

HIV/AIDS Programme Development - 545,000 135,371 - -

Fadama III (World Bank) - 145,050 131,180 - -

- 149,500 - - -

UNDAF Assisted Projects (UNICEF) - 1,160,000 134,029 - -

Commercial Agriculture Credit Scheme - 1,000,000 1,244,662 - -

- 54,000 26,000 - -

- 522,837 - - -

Employees' pension contribution - 1,120,140 - - -

Greater Water Works - - - 288,968 348,718

9,000 - - - -

9,000 5,896,527 2,591,039 288,968 348,718

6.16 ECONOMIC SECTOR

Agriculture, livestock & natural resources 634,894 401,037 2,872,221 2,671,946 1,972,112

Finance 19,439,998 1,214,283 801,002 - -

Manufacturing/ industries - 14,498 - 1,058,790 1,195,318

Commerce, Co-operative and supply 258,524 - 17,750 - -

Mining, power & quarrying 99,213 1,690,065 461,878 428,568 732,667

Transport & roads construction 16,638 2,638,656 98,221 42,380 5,542,706

20,449,267 5,958,539 4,251,073 4,201,684 9,442,803

6.17 SOCIAL SERVICE SECTOR

Community Development 57,735 240,629 273,711 - -

Education 1,389,609 3,243,231 3,801,182 1,632,747 1,764,160

Health & human serv ices 76,052 849,149 2,619,278 1,525,981 1,700,021

Housing 481,965 70,784 1,948,274 801,114 1,224,659

Road construction 3,330,159 7,446,103 9,465,659 2,763,697 -

Information 2,162 - 196,072 - -

Social development, youth and sports 5,357,804 3,315,752 78,611 103,915 355,712

10,695,486 15,165,648 18,382,787 6,827,455 5,044,552

6.18 ENVIRONMENTAL SECTOR

Community development - 4,812 10,138 4,795 33,509

Drainage 136,572 243,000 1,046,938 332,274 495,854

Sewages refuse disposal - 3,000 1,335 - -

Urban and regional planning 5,000 57,100 139,495 456,767 66,058

Water 490,836 477,350 2,255,564 2,672,706 2,006,456

632,408 785,262 3,453,470 3,466,542 2,601,877

Health System Development project

II (World Bank)

Root, crops and tuber expansion

Programme (NPFS)

Contributions from LGS for TorTiv and

Och'Idoma Palaces

Other Grants for capital projects from

indiv iduals/communities/corporate

bodies



52



2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.19 GENERAL ADMINISTRATIVE SECTOR

House of Assembly 6,675 - 69,225 - -

Judiciary - - 34,800 - -

Ministries, Departments and Agencies 1,379,984 2,815,610 1,625,448 669,162 600,077

1,386,659 2,815,610 1,729,473 669,162 600,077

6.20 CLAIMS AND CONTINGENCIES

6.20.1 Pending litigation

6.20.2 Pensions and gratuity

Total gratuity Payments Balance

N'000 N'000 N'000

Liv ing Pensioners 5,191,926 69,263 5,122,663

Dead Pensioners 1,623,803 18,064 1,605,739

6,815,729 87,327 6,728,402

Balance brought forward as

at October 2011 (Liv ing and 3,861,870

10,590,272

<---------------------------------- As at 31 December -------------------------------->

2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.21 STATEMENT OF ADJUSTMENTS

6.21.1 Cash and bank balances

Per audited financial statements 1,106,284 3,512,746 5,772,746 8,661,180 6,961,212

Adjustments:

649,126 649,126 483,333 483,333 -

4,912,925 4,912,926 - - -

- - 2,028,518 - -

- - - (6,072,739) (4,294,456)

6,668,335 9,074,798 8,284,597 3,071,774 2,666,756

Total gratuity owed as at April 2014

Debit balances reclassified from

internal loans


foreign loans

Bank balances omitted from audited

accounts

According to the information prov ided by the Office of the Head of service, Bureau of Pensions, a summary of

gratuity owed to liv ing and dead pensioners from November 2011 to April 2014 is as follows:

State Government and its agencies in the ordinary course of business with the various claims amounting to

N981,242,907 as at April 2014, majority of them relate to land disputes. The claims are being contested in the

various law courts and the State Executive Council is of the opinion that none of the pending suits is likely to have

any material adverse effect on the State's financial position.

Reclassification to Other assets

(Imprest & Others)



53


<---------------------------------- As at 31 December -------------------------------->

2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.21 STATEMENT OF ADJUSTMENTS (CONT'D)

6.21.2 Other assets

Per audited financial statements 10,828,028 17,195,362 20,631,402 1,054,718 862,220

Adjustments:

6,072,739 6,072,739 6,072,739 6,072,739 4,294,456

(2,272,812) (2,272,812) (10,956,567) - -

Duplication of VAT Revenue in CRF - (8,091,044) - - -

(14,741,211) (14,741,211) - - -

(3,683,915) 2,578,740 368,390 - -

Other adjustments (2,136,765) (327,741) 131,787

Balance transferred to

Economic Sector (CDF) 5,933,936 - - - -

- 414,033 16,247,751 7,127,457 5,156,676

6.21.3


Adjustments:

Adjustments for understatement - - - (399,931) -

- 2,272,812 9,526,102 - -

3,966,686 7,260,368 1,430,465 - -

649,126 649,126 483,333 483,333 -

4,912,925 4,912,926 - - -

Net adjustments on Medium-

term Bond 6,283,333 8,883,333 11,483,333 - -

23,749,943 25,992,209 28,244,847 18,610,374 20,335,753

6.21.4 Internal loans


Adjustments:

(2,316,648) (3,053,430) (10,052,868) - -

649,126 649,126 483,333 483,333 -

12,431,941 12,491,837 7,918,112 4,641,840 6,300,000

Reclassification from Cash & bank

(Imprest & Others)

Understatement of Development

Bond balance

Debit balances reclassified to Cash

and bank balances

Reclassification to Development

Bond 2011/2016

Excess of operating liabilities over assets


Internal loans to cash

Understatement of Excess of liabilities

over assets


Foreign loans to cash

Understatement of Excess of liabilities

over assets

Unsubstantiated balances transferred

from Miscellaneous revenueUnder/(over) statement of Bond

repayments



54


<---------------------------------- As at 31 December -------------------------------->

2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000


6.21.5 Development Bond 2011/2016

Per audited financial statements - - - - -

Adjustments:

Reclassification from Internal loans 2,316,648 3,053,430 10,052,868 - -

Reversal of interest repayment 4,703,471 2,882,773 1,062,075

- - - - -

Overstatement of repayment in 2011 368,390 368,390 368,390

Overstatement of repayment in 2012 2,578,740 2,578,740 -

Understatement of repayment in 2013 (3,683,916) - -

6,283,333 8,883,333 11,483,333 - -

6.21.6 Foreign loans

Per audited financial statements 121,744 (295,887) 8,843,402 13,873,556 14,035,753

Adjustments:

4,912,925 4,912,926 - - -

Understatement in IBRD UBE loan - - - 94,978 -

5,034,669 4,617,039 8,843,402 13,968,534 14,035,753

6.21.7 Consolidated Revenue Fund

Per audited financial statements 5,932,205 6,800,863 937,043 7,625,870 5,344,774

Adjustments:

Duplication of VAT revenue (8,091,044) (8,091,044) - - -

Reclassification of CDF revenue 55,183 55,183 55,183 55,183 55,183

Reclassification of grants from CRF (5,896,527) (5,896,527) - - -

(14,741,211) (14,741,211) - - -

(736,785) 2,947,130 368,390 - -

Adjustment in transfer to CDF 4,950,790 - - - -

Transfer from Capital development fund 19,000,000 19,000,000 - - -

472,611 74,394 1,360,616 7,681,053 5,399,957


and bank balances


and bank balances


to Other assets

repayments



55


<---------------------------------- As at 31 December -------------------------------->

2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000


6.21.8 Capital Development Fund


Adjustments:

2,033,013 2,033,013 2,028,518 - -

649,126 649,126 483,333 483,333 -

4,912,926 4,912,926 - - -

Correction of understatement of grants 2,565,039 2,565,039 2,565,039 - -

Correction of casting error 2,067,671 2,067,671 2,067,671 - -

Transfer to Consolidated revenue fund (19,000,000) (19,000,000) - - -

Adjustment in transfer from

CRF (4,950,790) - - - -

Reclassification of grants from CRF 5,896,527 5,896,527 - - -

Reclassification of CDF revenue (55,183) (55,183) (55,183) (55,183) (55,183)

5,933,926 - - - -

Other adjustments 141,350 141,350 141,351 - -

6,266,699 9,485,412 23,242,708 2,637,171 3,162,373


2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000

6.21.9 VAT Revenue (CRF)

Per audited financial statements - 8,091,044 - - -

Adjustment:

Duplicated entries in CDF - (8,091,044) - - -

- - - - -

6.21.10

Per audited financial statements 1,837,857 15,804,603 - 5,610,301 1,596,875

Adjustments:

- (14,741,211) - - -

1,837,857 1,063,392 - 5,610,301 1,596,875

6.21.11

Per audited financial statements 736,783 6,999,438 2,947,132 - -

Adjustment:

3,683,915 (2,578,740) (368,390) - -

4,420,698 4,420,698 2,578,742 - -



repayments

Miscellaneous revenue (CRF)


to Other assets



Repayment of Medium-term Bond


accounts

Correction of understatement of

additions to internal loans



56



2013 2012 2011 2010 2009

N'000 N'000 N'000 N'000 N'000


6.21.12 Internal loans - Additions (CDF)


Adjustment:

Correction of understatement - - - 220,416 -

8,463,800 7,355,150 3,804,948 2,344,247 5,500,000

6.21.13 Grants & Reimbursements (CDF)

Per audited financial statements 9,000 5,896,527 26,000 288,968 348,718

Adjustment:

Correction of understatement of grants - - 2,565,039 - -

9,000 5,896,527 2,591,039 288,968 348,718

6.21.14

Per audited financial statements - - - 20,000 -

Adjustments:

- 4,495 2,028,518 - -

- 165,792 - 483,333 -

- 4,912,926 - - -

- 5,083,213 2,028,518 503,333 -

6.21.15 Economic sector (CDF)


Adjustment:

(5,933,926) - - - -

20,449,277 5,958,539 4,251,073 4,201,684 9,442,803

6.21.16 General administrative sector (CDF)

Per audited financial statements 1,386,659 2,815,610 1,729,473 448,746 600,077

Adjustment:

- - - 220,416 -

1,386,659 2,815,610 1,729,473 669,162 600,077






accounts





Other miscellaneous revenue (CDF)

13. USE OF PROCEEDS


57

13 USE OF PROCEEDS

13.1 Overview

After deduction of the costs and expenses of the Issue, which are estimated at N153,028,698 representing 3.09%

and the underwriting fees of N173,250,000 representing 3.50% of the gross issue proceeds the net proceeds

amounting to N4,623,721,302.50 will be utilized to fund the following on-going and new projects:

S/N Project

Total

Cost of

Project

% of work

done till

date

Amount

Spent till

Date

Amount

allocated from

offer proceeds

%Estimated time

to Completion

1 Construction of Oshigbudu-Obagaji 10.0Km (Additional Works to Completion 776.8 59.8% 464.8 312.0 6.7% 12 months

2Construction of Oju-Obusa-Utonkon 51.48Km Road (Additional Works to

Completion)3,997.8 84.6% 3,383.3 614.5 13.3% 12 months

3Construcction of Tarku-Naka-Agagbe 61 Km Road (Additional Works to

Completion4,728.6 85.2% 4,028.6 700.0 15.1% 12 months

4 Up-grading/Rehabilitation of Daudu-Gbajimba 48.50 Km Road 3,114.8 80.7% 2,514.8 600.0 13.0% 12 months

5 Construction of Wannune-Ikpa-Igbor Road 36.732 Km 2,326.6 81.1% 1,886.6 440.0 9.5% 12 months

6 Township Roads 745.1 39.3% 293.1 452.0 9.8% 12 months

7 Reticulation and Upgrading of Water Works at Makurdi 3,995.8 74.8% 2,990.6 1,005.2 21.7% 12 months

8 Completion of Rural Electrification Projects (across the State) 1,018.7 50.9% 518.7 500.1 10.8% 6 months

TOTAL 4,623.7

13.2 Project Description

i. Construction of Oshigbudu-Obagaji 10.0 km Road This 10 km road located in Agatu local government area will serve as a good link for the

transportation of local farm produce. The road will begin from Oshigbudu on Oweto federal

road and will terminate at Obagaji, the Agatu local government area headquarters. It the

major link with the surrounding communities to the biggest market in the local government.

ii. Construction of Oju-Obussa-Utonkon 51.48 km Road The Oju-Obussa-Utonkon 51.48 km road located in Oju local government is expected to create

an access for farmers in moving their produce to the markets. The road will considerably

increase the economic activities of the affected communities.

iii. Construction of Taraku-Naka-Agada 61 km Road

This 61 km rural road located in a section of the Makurdi – Enugu road links major industrial hub

of Taraku, where the Taraku Oil Mills, one of the largest oil, flour and feed mills in West Africa is

located and Naka, the local government headquarters of the Gwer West Local government

area, which hosts a concentration of higher education institutions. The rehabilitation of this road

will alleviate the transportation problems faced in the local government area. It will also link the

key produce community of Agada to the major road network in the state, thus easing access

to produce.

iv. Up-grade/Rehabilitation of Daudu-Gbajimgba Road from rural road

This road which will cover 47.27 km road will provide direct access to Gbamjima, which is the

headquarters of Guma Local government. It will also link the University of Agriculture Makurdi and other private and public institutions within its axis.

v. Construction of Wannune-Ikpa-Igbo Road This 36.732 km road will open up direct access to Igbor Market. The current route to Wannune

from Igbor includes passing Enug-Makurdi road, which is heavily congested. The 36.732 km road will increase soci economic activities of the region by offering an alternative less congested

access road.

vi. Rehabilitation and up-grading of Water works at Makurdi, Otukpo and Katsina-Ala)

The rehabilitation of Otobi-Otukpo Water Works was commissioned on 8th March 2012 and is

partially completed.

13. USE OF PROCEEDS


58

The plant is powered by River Otobi and serviced by a 1000m3 overhead tank located in

Otukpo. To enhance reticulation the Plant is equipped with 3 water pumps. It possesses a

combined installed capacity of 15, 000 m3 per day. Power is supplied from the National Grid

and possesses a 1,000 KVA backup power generating set. Although the Water Works is located

in Otobi, it is only about 13km from the heart of Otukpo. The Otukpo Water Works consists of the

old 5,000 m3 and the new 10,000 m3 Plants. This Water Works is projected to function for 35

years.

vii. Rural Electrification Project

This is an initiative of the BESG to increase the access of electricity to its citizens living in rural

areas of the state. 20 projects spread across the 23 local governments in the state have been

identified.

14. OTHER GENERAL INFORMATION


59

14 OTHER GENERAL INFORMATION

14.1 Statement of Indebtedness

Save as disclosed herein, as at the date on which this Prospectus is issued, the State had no outstanding

debentures, mortgages, loan capital, overdrafts, short term loans, charges or similar indebtedness or

material contingent liabilities other than those arising from the ordinary course of activities. As at the date

of the audited financial statement for the year ended December 31, 2013 the aggregate net debt position

of the State amounted to N23.8 billion including the outstanding bond obligation issued in 2011. This consists

of the State’s internal loans (naira denominated borrowings) and external loans (long term foreign currency

borrowings).

14.2 Statement of Claims, Litigations and Disputes

The detailed list of all the State’s Claims & Litigation is set out in the document titled “Schedule of Claims &

Litigation”. Except as disclosed in this Prospectus, including the documents referred to under "Documents

Available for Inspection" on page 66 of this Prospectus, there are no pending or threatened legal or

arbitration actions, suits or proceedings against or affecting the State which may have, or have had during

the 12 months prior to the date hereof, individually or in the aggregate, a significant effect on the financial

position of the State and, to the best of the knowledge of the State, no such actions, suits or proceedings

are pending or threatened.

There are currently about 64 (sixty four) cases involving the Benue State Government. A review of these

cases as supplied to the Solicitors to the Issue was undertaken with a view to ascertaining the contingent

liability on the State. The total sum of the claims against the State is approximately in the sum of N981,

242,907.83. (Nine Hundred and Eighty One Million, Two Hundred and Forty Thousand Nine Hundred and

Seven Naira Eighty Three kobo only).

On the whole, the Solicitors to the Issue are of the opinion that none of the cases are likely to have any

material adverse effect on the State or the Issue. The Solicitors to the Issue are also not aware of any other

pending or threatened litigation against the State.

14.3 Costs & Expenses

The costs, charges and other expenses incidental to the Bond Issuance including the fees payable to the

regulatory authorities, professional parties, brokerage commission, printing, distribution, publicity and

advertising expenses are estimated at N153,028,697:50K (One Hundred and Fifty Three Million, Twenty Eight

Thousand, Six Hundred and Ninety Seven Naira, Fifty Kobo only) representing approximately 3.0915% of the

total amount to be raised. This is exclusive of the Underwriting cost of N173,250,000 (One Hundred and

Seventy Three Million, Two Hundred and Fifty Thousand Naira only) being 3.50% of the Offer size.

14.4 Relationship between the State & Advisers

As at the date of this Prospectus, there is no relationship between the Issuer and any of its advisers except in

the ordinary course of business.

14.5 Official Listing on Stock Exchanges

The Bonds will be listed on the Nigerian Stock Exchange, the FMDQ-OTC and/or any other recognized

Exchange and will be admitted to the Daily Official List which shall be subject to the approval of the SEC.

As set out herein, this Prospectus thereto will only be valid for the admission of the Bonds to the Daily Official

List.

14.6 Clearing System

The Bonds will be cleared through the CSCS. Transactions will normally be effected for settlement not earlier

than 3 working days after the date of the transaction



60

14.7 Extract from the Bond Law

Extracts from Benue State Bonds, Notes and other Securities Issuance Law No. 5 of 2009

POWER TO RAISE LOANS AND BORROW FROM THE PUBLIC

Section 3(1) –(2) 3.(1) The Government is hereby authorized to issue, through the

Department, any Debt Securities with such fixed, floating or zero

coupon rates, and upon such other terms including the tenor

thereof and in such tranches, sequence and currency as may be

determined by the Executive Council, or raising and borrowing any

sums of money required to meet the obligations of the State in

respect of its public investment and commitments or otherwise as

shall be approved by the State House of Assembly.

(2) The borrowings or loans secured by the issuance of any instrument

and or Debt Securities under this Law shall be incurred and used for

any or a Combination of the following purposes:

(a) Financing the budget of the State as approved by the House of

Assembly in respect of Projects as defined in section 2 of this Law;

(b) Refinancing the existing obligations of the State in respect of its

public investment Projects within the meaning of section 2 of this Law, and

(c) Such other Project-related purpose as may be determined of

approved by the Executive Council as may be prescribed by a law

of the House of Assembly.

ESTABLISHMENT OF A SINKING FUND

Section 19(1) – (4) 19(1) The State shall establish a specific Sinking Fund in

connection with a particular tranche of Debt Securities and or

instruments issued.

(2) Any sum credited to the Sinking Fund established pursuant to

subsection (1) shall be utilized solely for the purpose of making

principal and interest payments on a particular tranche of Debt

Securities and or instruments.

(3) The Accountant General of the Federation, as appropriate and on

the due dates, pay out of the Federal Allocation due to Benue

State on a monthly basis into the Sinking Fund, the sums required to

meet necessary payment obligations which have been specified in

the terms and conditions of issue of the tranche of debt Securities

and or account balance in the Sinking Fund would be the amount

outstanding on the next due date.

(4) The sinking funds shall at all times be completely segregated and set apart from all other Funds of the State and shall be a Trust Fund

for the repayment of the principal and interest on the tranche of

Debt Securities and or instruments in respect of which it was

established, as the same shall become due

FACTORS THAT WILL DETERMINE THE SPECIFIC OR AGGREGATE AMOUNT TO BE RAISED, REDEMPTION,

PUBLICATION AND LISTING

Section 3(3)-(8) 3 (3) The specific or aggregate amount that the Government may

raise or borrow by the issuance of any instrument and or Debt

Securities under this law shall be determined by the Executive

Council upon the recommendation of the Commissioner, taking

into account the following:

(a) The total revenue of the State for the year preceding the year in

which the instruments are to be issued;

(b) The current revenue of the State and the projected revenue for the

succeeding years;

(c) The average economic growth rate for the three years preceding

the year of any issue;

(d) The existing public debt portfolio;



61

(e) The gross domestic product of the State for the year preceding any

issue; and

(f) The subsisting credit balances in the Debt Service Reserve fund.

(4) The date for the redemption of any instrument and or Debt

Securities issued pursuant to this Law shall not exceed twenty five

years from the date of issuance of the instruments.

(5) Any issuance of Debt Securities made pursuant to subsection (3) of

this section shall be published in the Gazette within twenty-one days

from the issuance of the Debt Securities. The Department shall,

thereafter, subject to further directions of the Commissioner, make

all necessary and appropriate arrangements to issue the Debt

Securities in accordance with the approved terms and conditions. (6) The Gazette published pursuant to subsection (5) of this section shall

give details of the specific information and terms of the issue,

including-

(a) The sum of money to be raised by the issue;

(b) The mode or modes of effecting the issue;

(c) The rate of interest payable on the loan raised from the

issued instrument and or Debt Securities;

(d) The dates in each year on which the interest on the loan

shall be payable;

(e) The date of redemption of the instrument issued;

(f) The purpose of borrowing;

(g) The market and the currency of issue; and

(h) any other information relating to the issue which is deemed

necessary to effectively raise the required sums, and or

provide preliminary information to holders or as required by

any other relevant laws relating thereto.

(7) Any instrument and or Debt Securities issued under this law may be

listed on any stock exchange or any equivalent trading floor in any

jurisdiction, or may be unlisted.

(8) The Commissioner, on the direction of the Governor, may enter into any rescheduling arrangements under this law.

MODE OF ISSUANCE

Section 4. 4. Any instrument and or Debt Securities under this Law may

be issued by the Department by means of:-

(a) Public offering;

(b) Auctions;

(c) Syndications;

(d) Private placements;

(e) Reverse enquiries; and

(f) Such other transactions or issuance made as may be

determined by the commissioner.

TRANSFER, REGISTRATION AND RATING OF INSTRUMENTS

Section 13 13(1) the instrument and or Debt Securities issued under this law shall be

transferable in the manner specified in the Gazette published in respect of

their issuance.

(2) The title to any instrument and for Debt Securities shall not be

deemed to be transferred to any other person save upon the execution of an approved instrument of transfer or in accordance

with the transfer process of any stock exchange and upon the

registration of the transferee as the holder thereof in the Register.

(3) Interest which has fallen due in respect of any instrument and or

Debt Securities but which has not been paid to the holder thereof

for the time being, shall not be deemed payable to a transferee of

that instrument and or Debt Securities unless the instrument of



62

transfer expressly provided for the transferee and the transferee

and the transferee’s name has been registered in the Register.

14.8 Extracts from the Trust Deed

The Trust Deed contains, inter alia, the following provisions:

AMOUNT, TENOR AND STATUS

Amount: The Aggregate Amount of the Bond is N4,950,000,000 comprising 4,950,000 registered Bonds at a

par value of N1,000 each.

Type of Bonds: Fixed Rate Bonds

Status of Bonds: The Bonds constitute senior and direct obligations of the State. The Bonds are not

guaranteed by the Federal Government of Nigeria. The Bonds qualify as Securities in which Trustees may

invest under the Trustees Investment Act Cap T22 LFN 2004.

Minimum Subscription: The minimum Subscription amount for the Bonds is N10,000,000 and multiples of

N1,000,000 thereafter.

Tenor: The period from the Issue Date to the Maturity Date.

Tax Consideration: The Bonds shall be exempt from all forms of taxation in the Federal Republic of Nigeria.

Accordingly, all payments made to the Holders shall be free and clear of withholding, or any deductions at

source or otherwise and/or State and Federal income and capital gains or other taxes.

Eligible Investors: Subscription to the Bond is restricted to Qualified Institutional Investors and High Net worth

Individuals.

REPRESENTATIONS AND UNDERTAKINGS

Representations and Warranties of the Issuer

• The Issuer hereby certifies that the neither the execution of this Trust Deed nor the creation of the

charge hereunder contravenes the provisions of any laws of the State.

• The Issuer also warrants that no amalgamation, reconstruction or other change in the status of the

State shall be interpreted to avoid the obligations herein imposed on the Government, and in the

event of any change in the status of the State, the successor(s)-in-title of the State Government

shall be held and deemed responsible for the performance of the obligations imposed hereunder.



63

14.9 Extract of the Rating Report for the Issuer & Issue



64



65

14.10 Consents

The following have given and not withdrawn their written consents to the issue of this Prospectus with their

names and reports (where applicable) included in the form and context in which they appear:

Representatives Of Benue State

Executive Council

His Excellency, Rt. Hon. Gabriel Torwua Suswan, PhD,

CON

Chief Steven Obekpa Lawani, OFR

Dr. David Salifu

Mr. Terna Ahua

Hon. Omadachi Oklobia

Hon. Egbiri Idaah

Hon. John Tondu

Hon. (Sir) John Ngbede

Hon. (Pharm) Alexander Akpera

Hon. Dr. Elizabeth Ugo

Hon. Elizabeth Allagh

Hon. Comfort Ajene

Hon. (Dr.) Orduen Abunku

Hon. Esther Dzungwe

Hon. Terfa Hindan

Hon. Anumeh Innocent

Hon. Gbugho Amokaha Donald

Hon. Anthony Onuh

Hon. Justin Amase

Hon. Aondowase Chia

Mr. Linus Akpen

Mr. Kpaakpa T. Joseph

Barr. Philip Ierkwagh

Lead Issuing House / Underwriter United Capital Plc

Joint Issuing House / Underwriter FBN Capital Limited

Trustees

FBN Trustees Limited

Skye Trustees Limited

United Capital Trustees Limited

Registrars Africa Prudential Registrars Plc

Stockbrokers

Elixir Securities Limited

United Capital Securities Limited

GEM Assets Management Limited

IMTL Securities Limited

Solicitor to the Issue Wali-Uwais & Co.

Solicitor to the Trustees Greenfield Chambers



66

Reporting Accountant Akintola Williams Deloitte

Rating Agency Agusto & Co. Limited

Receiving Bank UBA Plc

14.11 Documents Available for Inspection

The following documents will be available for inspection throughout the life of the Bond Issuance at the

principal offices of the Joint Issuing Houses as indicated on pages 9, the Benue Debt Management Office,

the Benue State Ministry of Finance, Makurdi:

o The Benue Bonds Law 2009

o The State’s most recently published annual public accounts (including its annual Statement of

revenue and expenditure);

o The State’s most recent annual budget as presented to the Legislative Assembly of the State;

o Letter from the Solicitors on the outstanding claims, litigations and material contracts involving the

State;

o The Prospectus issued in respect of the Issuance;

o Trust Deed issued further to this Prospectus;

o The Vending Agreement; and other material contracts (as applicable)

o The Resolution of the State Executive Council approving the Bond;

o The Resolution of the Benue State House of Assembly approving the Bond;

o The SEC approval letter for the Offer.

14.12 Sinking Fund Schedule

The Benue State Government has requested the Honourable Minister of the Federal Ministry of Finance to

deduct, as a first charge on the State’s share of the Federation Account and to place to the credit of the

Sinking Fund account, the sum of N103,855,987.23 (One Hundred and Three Million Eight Hundred and Fifty

Five Thousand Nine Hundred and Eighty Seven Naira Twenty Three Kobo Only) from the revenue of the

State as shown in the schedule set out hereunder from time to time which sum shall be applied towards the

payment of interest and the redemption, at par, of the Bond PROVIDED THAT where the amount being

credited to the account is not sufficient to meet interest and principal repayment due to the Bond at any

time, the Trustees shall ask the State to increase the amount being credited to the account.



67

Month Monthly ISPO Deduction (N) Month Monthly ISPO Deduction (N)

1 103,799,599.77 43 103,799,599.77

2 103,799,599.77 44 103,799,599.77

3 103,799,599.77 45 103,799,599.77

4 103,799,599.77 46 103,799,599.77

5 103,799,599.77 47 103,799,599.77

6 103,799,599.77 48 103,799,599.77

7 103,799,599.77 49 103,799,599.77

8 103,799,599.77 50 103,799,599.77

9 103,799,599.77 51 103,799,599.77

10 103,799,599.77 52 103,799,599.77

11 103,799,599.77 53 103,799,599.77

12 103,799,599.77 54 103,799,599.77

13 103,799,599.77 55 103,799,599.77

14 103,799,599.77 56 103,799,599.77

15 103,799,599.77 57 103,799,599.77

16 103,799,599.77 58 103,799,599.77

17 103,799,599.77 59 103,799,599.77

18 103,799,599.77 60 103,799,599.77

19 103,799,599.77 61 103,799,599.77

20 103,799,599.77 62 103,799,599.77

21 103,799,599.77 63 103,799,599.77

22 103,799,599.77 64 103,799,599.77

23 103,799,599.77 65 103,799,599.77

24 103,799,599.77 66 103,799,599.77

25 103,799,599.77 67 103,799,599.77

26 103,799,599.77 68 103,799,599.77

27 103,799,599.77 69 103,799,599.77

28 103,799,599.77 70 103,799,599.77

29 103,799,599.77 71 103,799,599.77

30 103,799,599.77 72 103,799,599.77

31 103,799,599.77 73 103,799,599.77

32 103,799,599.77 74 103,799,599.77

33 103,799,599.77 75 103,799,599.77

34 103,799,599.77 76 103,799,599.77

35 103,799,599.77 77 103,799,599.77

36 103,799,599.77 78 103,799,599.77

37 103,799,599.77 79 103,799,599.77

38 103,799,599.77 80 103,799,599.77

39 103,799,599.77 81 103,799,599.77

40 103,799,599.77 82 103,799,599.77

41 103,799,599.77 83 103,799,599.77

42 103,799,599.77 84 103,799,599.77



68

14.13 Bond Amortization Schedule

Bond Obligation

Repayment IntervalOpening Principal Balance

Semi-Annual

Prinicipal

Repayment

Semi-Annual

Coupon payment

Total Semi

Annual Payment

Closing Principal

Balance

Bond Issue Date [•] 2015 4,950,000,000.00 4,950,000,000.00

Month 6 4,950,000,000.00 200,791,512.16 408,375,000.00 609,166,512.16 4,749,208,487.84

Month 12 4,749,208,487.84 217,356,811.91 391,809,700.25 609,166,512.16 4,531,851,675.93

Month 18 4,531,851,675.93 235,288,748.89 373,877,763.26 609,166,512.15 4,296,562,927.04

Month 24 4,296,562,927.04 254,700,070.68 354,466,441.48 609,166,512.16 4,041,862,856.36

Month 30 4,041,862,856.36 275,712,826.51 333,453,685.65 609,166,512.16 3,766,150,029.85

Month 36 3,766,150,029.85 298,459,134.69 310,707,377.46 609,166,512.15 3,467,690,895.16

Month 42 3,467,690,895.16 323,082,013.31 286,084,498.85 609,166,512.16 3,144,608,881.85

Month 48 3,144,608,881.85 349,736,279.40 259,430,232.75 609,166,512.15 2,794,872,602.45

Month 54 2,794,872,602.45 378,589,522.46 230,576,989.70 609,166,512.16 2,416,283,079.99

Month 60 2,416,283,079.99 409,823,158.06 199,343,354.10 609,166,512.16 2,006,459,921.93

Month 66 2,006,459,921.93 443,633,568.60 165,532,943.56 609,166,512.16 1,562,826,353.33

Month 72 1,562,826,353.33 480,233,338.01 128,933,174.15 609,166,512.16 1,082,593,015.32

Month 78 1,082,593,015.32 519,852,588.39 89,313,923.76 609,166,512.15 562,740,426.93

Month 84 562,740,426.93 562,740,426.94 46,426,085.22 609,166,512.16 0.00

15. PROCEDURE FOR APPLICATION AND ALLOTTMENT


69

15 PROCEDURE FOR APPLICATION AND ALLOTMENT

1. Invitation for Participation

The general investing public is hereby invited to apply for the Bonds through any of the Issuing Houses

1.1. Applications for the Bonds must be made in accordance with the instructions set out on the back of the

Application Form. Care must be taken to follow these instructions, as applications which do not comply

will be rejected.

1.2. The Application List for the Bonds now being offered opens on 27th February, 2015 and will close on 27th

February, 2015. Applications must be for a minimum of 10,000 registered Bonds of N1,000 each

representing an aggregate value of N10,000,000 and in integral multiples of N1,000 representing an

aggregate value of N1,000,000 thereafter. The number of registered Bonds for which application is made

and the value of the cheque or bankdraft or evidence of electronic transfer attached should be

entered in the space provided in the attached Application form.

1.3. The subscription currency for the Bond is the Nigerian Naira (N). Foreign currency subscriptions will be

processed at the applicable foreign exchange rate determined at the auction at the CBN as

conducted from time to time.

1.4. The applicant should make only one application, whether in his own name, or in the name of a nominee.

Multiple or suspected multiple applications will be rejected.

1.5. Applicants should complete the Application Form as appropriate. A corporate applicant should affix its

seal in the box provided for this purpose and state its incorporation (RC) Number or in the case of a

corporate foreign subscriber, its appropriate identification number in the jurisdiction in which it is

constituted.

1.6. All applicants are required to indicate their bank account details in the space provided on the

Application Form for the purposes of Coupon and principal e-payments.

1.7. Each duly completed Application should be forwarded ONLY to one of the Receiving Agents listed in this

Supplementary Shelf Prospectus, together with the cheques or bank draft for the aggregate value of

Bonds being subscribed, crossed “BENUE STATE BONDS 2015/2022” and made payable to the Receiving

Agent to which the application is addressed. All bank commissions and transfer charges must be

prepaid by the applicant. All cheques and bank drafts will be presented upon receipt and all

applications in respect of which cheques or bank drafts are returned unpaid will be rejected.

2. Allocation/Allotment

The Issuing Houses reserve the right to accept or reject any application in whole or in part for not complying with

the terms and conditions of the Issue. All irregular or suspected multiple applications will be rejected. The

allotment proposal will be subsequent to the clearance of the Commission.

15. PROCEDURE FOR APPLICATION AND ALLOTTMENT


70

Any investor who prefers the issue of the Notes in dematerialized form should specify the details of his/her

Stockbroking firm, CHN and CSCS account in the space provided on the Application Form. The CSCS account

shall be credited within 7(Seven) business days from the date of obtaining the approval of the Basis of Allotment

from the Commission while Certificates in respect of allotted Notes will be sent by registered post not later than

15(fifteen) Business days from the Allotment date to investors who prefer certificates.

3. Application Monies

All application monies will be retained in separate interest-yielding bank accounts with the Receiving Banks

pending allotment. If any application is not accepted, or is affected for fewer Notes, than the number applied

for, a crossed cheque for the full amount or the balance of the amount paid (as the case may be) plus interest

will be returned by registered post within 5(five) Business Days of allotment by the Registrar. Where monies are not

sent within the stipulated 5 Business Days, accrued interest will be paid to the affected applicants at the

prevailing Monetary Policy Rate plus a margin of 5% i.e. MPR+5%.

INSTRUCTIONS FOR COMPLETING THE COMMITMENT FORM


71

1. All applications must be made on the official Commitment Form or photocopy, downloaded or scanned

copy of the Commitment Form.

2. Applications must not be for less than the minimum number of Units and in the quantity stated on the

Commitment Form. Applications for more than the minimum number of Units must be in the multiples

stated on the Commitment Form. The number of Units for which an application is made should be

entered in the boxes provided.

3. The Commitment Form when completed should be lodged with any of the Issuing Houses listed on page

9. Successful Participants should ensure that payment of the Participation Amounts is received by

February 27, 2015.

4. The Applicant should make only one application, whether in his own name or in the name of a nominee.

Multiple or suspected multiple applications will be rejected.

5. Joint Applicants must all sign the Commitment Form.

6. An application from a group of individuals should be made in the names of those individuals with no

mention of the name of the group. An application by a firm that is not registered in compliance with the

Companies and Allied Matters Act, Cap C20 LFN 2004 should be made either in the name of the

proprietor or in the names of the individual partners. In neither case should the name of the firm be

mentioned.

7. A Commitment/Form submitted from a corporate entity must bear the seal and be completed under the

hands of a duly authorised official.

8. Applications by illiterates should bear their right thumbprints on the Commitment Form and be witnessed

by an official of the company or stockbroker with whom the application is lodged who must first have

explained the meaning and effect of the Commitment Form to the illiterate. The witness must record in

writing that he has given this explanation to the illiterate in a language understandable to them and that

the illiterate appeared to have understood the same before affixing their thumb impression.

9. The Applicant should not print his signature. If he is unable to sign in the normal manner, he should be

treated for the purpose of this Offer as an illiterate and his right thumb print should be clearly impressed

on the Commitment Form.

RC: 444999

RC: 446599

COMMITMENT FORM

Application List Opens 27 February, 2015

Application List Closes 27 February, 2015

To: United Capital Plc,

DECLARATION

o I am/We are 18 years of age or over.

o I/We attach the amount payable in full on application for the above number of bonds in the above mentioned Benue State Government Bond Offer. I/We agree to accept the same or any smaller

number of bonds in respect of which allotment may be made upon the Terms of the Issue specified in

the prospectus dated 27 February, 2015 and subject to the Benue State Debt Security Issuance and

other Related Matters.

o I/We authorize you to send a Bond Certificate/Credit CSCS Account and/or cheque for any amount

overpaid, by registered post to the address given below and to procure registration in my/our name

as the holder(s) of such number of bonds or such smaller number, as aforesaid.

o I/We hereby declare that I/We have read a copy of the Prospectus for the bonds issued by Benue

State Government dated 27 February, 2015.

on behalf of

BENUE STATE GOVERNMENT OF NIGERIA Offer for Subscription

and are authorized to receive applications for

N4,950,000,000

16.5% Fixed Bond 2015/2022

At N1,000 per Unit

PAYABLE IN FULL ON APPLICATION

Number of units applied for: ________________

Value of units applied for: __________________

Cheque details

Value of cheque/bank draft: ________________

Name of bank/branch: ____________________

Cheque number: _________________________

CSCS: _________________________________

CHN: _________________________________

GUIDE TO APPLICATION Number of Bonds applied for Amount Payable

10,000 Minimum N10,000,000 Subsequent Multiples of 1,000 N1,000,000

Surname/Company Name:

Others Names (for Individual Applicant Only):

Full Postal Address:

City:

Land Phone Number:

State:

Mobile (GSM) Phone:

E-mail address:

Next of Kin:

Name of Your Stockbroker:

B. SIGNATORY(IES)

CSCS NO.

1. Name (Surname name first):

PLEASE COMPLETE IN BLOCK LETTERS AND IN BLACK INK

A. APPLICANT’S DETAILS

Name of bank/branch: Account Number:

INCORPORATION NUMBER & COMPANY SEAL OF CORPORATE APPLICANT

STAMP OF RECEIVING AGENT

2. Name (Surname name first):

Designation: ________________________ Signature & date: __________________________ Designation: _________________________ Signature & date: ___________________________

FOR REGISTRARS’ USE ONLY

CONTROL NUMBER

_______________________

Number of Bonds Applied for

_______________________

Number of Bonds Allotted

_______________________

Amount Paid

N_____________________

Value of Bonds Allotted

N_____________________

Amount to be Returned

N_____________________

Cheque Number

_______________________

STAMP OF ISSUING HOUSE

C. BANK DETAILS (for e-Dividend/Coupon)

Registrar Office: 220B, Ikorodu Road,

Palmgrove, Lagos.

PMB 12649, Marina, Lagos.

Tel: +234 (0)7080606400

[email protected]

Application must be in accordance with the instructions set out on the back of this application form. Care must be taken to follow these instructions as Applications that do not

comply may be rejected.

LEAD ISSUING HOUSE / UNDERWRITER

JOINT ISSUING HOUSE / UNDERWRITER

(If you want units allotted to be credited

to your CSCS account)