LAGOS STATE GOVERNMENT OF NIGERIA - Cordros Capital

THIS DOCUMENT IS IMPORTANT AND YOU ARE ADVISED TO CAREFULLY READ AND UNDERSTAND ITS CONTENTS. IF YOU ARE IN DOUBT ABOUT ITS CONTENTS OR THE ACTION TO TAKE PLEASE CONSULT YOUR STOCKBROKER, SOLICITOR, BANKER OR AN INDEPENDENT INVESTMENT ADVISER. THIS PROSPECTUS HAS BEEN SEEN AND APPROVED BY THE MEMBERS OF THE LAGOS STATE EXECUTIVE COUNCIL AND THEY JOINTLY AND INDIVIDUALLY ACCEPT FULL RESPONSIBILITY FOR THE ACCURACY OF ALL INFORMATION GIVEN AND CONFIRM THAT, AFTER HAVING MADE ENQUIRIES WHICH ARE REASONABLE IN THE CIRCUMSTANCES AND TO THE BEST OF THEIR KNOWLEDGE AND BELIEF, THERE ARE NO OTHER FACTS, THE OMISISON OF WHICH WOULD MAKE ANY STATEMENT HEREIN MISLEADING

For information about risk factors which should be considered by prospective investors, see Risk Factors on page 50.

THIS SHELF PROSPECTUS AND THE SECURITIES THAT IT OFFERS HAVE BEEN APPROVED AND REGISTERED BY THE SECURITIES & EXCHANGE COMMISSION. IT IS A CIVIL WRONG AND CRIMINAL OFFENCE UNDER THE INVESTMENTS & SECURITIES (NO. 29 OF 2007) ACT TO ISSUE A PROSPECTUS WHICH CONTAINS FALSE OR MISLEADING INFORMATION. THE CLEARANCE AND REGISTRATION OF THIS PROSPECTUS AND THE SECURITIES WHICH IT OFFERS DOES NOT RELIEVE THE PARTIES FROM ANY LIABILITY ARISING UNDER THE ACT FOR FALSE AND MISLEADING STATEMENTS CONTAINED HEREIN OR FOR ANY OMISSION OF A MATERIAL FACT. “THIS SHELF PROSPECTUS IS TO BE READ AND CONSTRUED IN CONJUCTION WITH ANY SUPPLEMENT HERETO AND ALL DOCUMENTS WHICH ARE INCORPORATED HEREIN, BY REFERENCE AND, IN RELATION TO ANY TRANCHES (AS DEFINED HEREIN) OF INSTRUMENTS, TOGETHER WITH THE APPLICABLE PRICING SUPPLEMENT/SUPPLEMNTARY SHELF PROSPECTUS. THIS SHELF PROSPECTUS SHALL BE READ AND CONSTRUED ON THE BASIS THAT SUCH DOCUMENTS ARE INCORPORATED AND FORM PART OF THIS SHELF PROSPECTUS” THE REGISTRATION OF THE SHELF PROSPECTUS AND ANY SUPPLEMENTARY PROSPECTUS (PRICING SUPPLEMENT) THEREAFTER DOES NOT IN ANY WAY WHATSOEVER SUGGEST THAT THE SECURITIES AND EXCHANGE COMMISSION ENDORSES OR RECOMMENDS THE SECURITIES OR ASSUMES RESPONSIBILITY FOR THE CORRECTNESS OF ANY STATEMENT MADE OR OPINION OR REPORT EXPRESSED THEREIN.

RC 622258RC 622258

LAGOS STATE GOVERNMENT OF NIGERIA

N167,500,000,000 DEBT ISSUANCE PROGRAMME For the Issuance of a Bond or Series of Bonds with maturities of 5 years and longer

LEAD ISSUING HOUSE/BOOK RUNNER:

JOINT ISSUING HOUSES/BOOK RUNNERS:

This Shelf Prospectus is dated the [.] day of [.], 2012

RC261272 RC 733583

RC446599 RC672560 RC 125097

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Table of Contents 1. DEFINITION OF TERMS....................................................................................................................................................... 3 2. INFORMATION RELATED TO THE SHELF PROSPECTUS ................................................................................................... 7 3. PRICING SUPPLEMENT ........................................................................................................................................................ 9 4. PARTIES TO THE OFFER ..................................................................................................................................................... 10 5. THE PROGRAMME ............................................................................................................................................................. 18 6. DECLARATION BY THE ISSUER ........................................................................................................................................ 19 7. PARTICULARS OF THE PROGRAMME ............................................................................................................................... 20

7.1. SUMMARY OF TERMS & CONDITIONS OF THE PROGRAMME ...................................................................... 20 7.2. TERMS & CONDITIONS OF THE BONDS ......................................................................................................... 23

8. TAX CONSIDERATIONS ................................................................................................................................................... 29 9. LAGOS STATE .................................................................................................................................................................... 30

9.1. OVERVIEW OF LAGOS STATE ......................................................................................................................... 30 9.2. ECONOMIC REVIEW ........................................................................................................................................ 31 9.3. GOVERNANCE AND BEST PRACTICES ............................................................................................................ 32 9.4. LAGOS STATE’S TEN POINT AGENDA ........................................................................................................... 32 9.5. MEDIUM TERM STRATEGY OF THE STATE .................................................................................................... 35 9.6. FINANCES OF LAGOS STATE ........................................................................................................................... 35 9.7. CONCLUSION ................................................................................................................................................... 37

10. THE LAGOS STATE EXECUTIVE COUNCIL ...................................................................................................................... 38 11. USE OF PROCEEDS ............................................................................................................................................................ 44 12. RISK FACTORS & MITIGANTS ......................................................................................................................................... 50 13. THE N167.5 BILLION DEBT ISSUANCE PROGRAMME .................................................................................................... 54 14. NIGERIA OVERVIEW .......................................................................................................................................................... 58 15. STATUTORY AND GENERAL INFORMATION ................................................................................................................... 62 16. RATINGS REPORT ............................................................................................................................................................. 65 17. FINANCIAL FORECAST........................................................................................................................................................ 67

17.1. REPORTING ACCOUNTANTS’ REPORT........................................................................................................... 67 17.2 LETTER FROM JOINT ISSUING HOUSES ......................................................................................................... 68 17.3 REVENUE AND EXPENDITURE FORECAST ...................................................................................................... 69 17.4 ASSUMPTIONS ................................................................................................................................................. 70

18. FINANCIAL SUMMARY ....................................................................................................................................................... 71 18.1 REPORTING ACCOUNTANTS REPORT ............................................................................................................ 71 18.2 STATEMENT OF ASSETS AND LIABILITIES ..................................................................................................... 72 18.3 STATEMENT OF REVENUE AND EXPENDITURE .............................................................................................. 74 18.4 NOTES TO THE FINANCIAL STATEMENTS ..................................................................................................... 75

19. OTHER GENERAL INFORMATION ...................................................................................................................................... 81 19.1 STATEMENT OF INDEBTEDNESS ..................................................................................................................... 81 19.2 CLAIMS, LITIGATIONS AND DISPUTES .......................................................................................................... 81 19.3 COSTS & EXPENSES ......................................................................................................................................... 81 19.4 DOCUMENTS AVAILABLE FOR INSPECTION ................................................................................................. 81 19.5 RELATIONSHIP BETWEEN THE STATE & ADVISERS ...................................................................................... 82

20. FORM OF SUPPLEMTARY SHELF PROSPECTUS/ PRICING SUPPLEMENT .......................................................................... 97

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1. DEFINITION OF TERMS

“Afrinvest” „‟Allotment Date‟‟ “Bidder‟‟

Afrinvest (West Africa) Limited The date on which the Bonds are allotted to successful bidders

Any Qualified Investor who makes a Bid pursuant to the terms of a Pricing Supplement

“Bonds” Any bonds which may be issued by the State under the programme in accordance with the terms of this Shelf Prospectus and any subsequent Supplementary Shelf Prospectus/Pricing Supplement

“Bonds Law” „‟Book Runner(s)‟‟

The Lagos State Bonds, Notes and Other Securities Issuance Law 2008

The Issuing House(s) duly appointed by the Issuer to maintain the book in respect of the Bonds being sold by way of Book Building

„‟Book Building‟‟ A process of price and demand discovery by which a Book Runner seeks to determine the price at which a public offer should be made, based on demand from Qualified Institutional and High Net worth Investors

“Business Day” Any day except Saturdays, Sundays and Federal Government declared Public Holidays on which banks are open for business in Nigeria

“CAC” Corporate Affairs Commission

“CAGR” Compound Annual Growth Rate

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

“Capital Budget” Medium-Term Capital Budget of Lagos State, within the Medium Term Fiscal Framework (2011 -2013)

“CBN” Central Bank of Nigeria

“CDSA” Consolidated Debt Service Account, the dedicated Bond obligation service account created under the Lagos State Bonds, Notes and Other Securities Issuance Law 2008 from which the Sinking Fund is funded/could be funded

“Chapel Hill” Chapel Hill Advisory Partners Limited

“CITA” Companies Income Tax Act Cap C21, LFN, 2004 (as amended by the Companies Income Tax (Amendment) Act No. 11 of 2007

“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 Pricing Supplement/Supplementary Shelf Prospectus

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

“CSCS” or the “Clearing System” Central Securities Clearing Systems Limited

“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

“Debt Issuance Programme” or the “Programme”.

The N167.5 Billion Debt Issuance Programme described in this Shelf Prospectus pursuant to which the State may issue tranches of bonds from time to time, the maximum aggregate outstanding value of which shall not exceed N167.5 Billion

“Debt Office”

The Lagos State Debt Management Office


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„‟Debt Office Law‟‟

The Lagos State Debt Management Office (Establishment) Law 2008

“DMO” National Debt Management Office „‟Exchange Rate‟‟ The applicable USD/NGN currency exchange rate shall be the applicable

Central Bank of Nigeria Dutch Auction clearing rate on the allotment date

“FBN Capital” FBN Capital Limited

“FCMB CM” FCMB Capital Markets Limited

“FGN” Federal Government of Nigeria

„‟FIRS” Federal Inland Revenue Service

„‟GDP‟‟ Gross Domestic Product

„‟High Net Worth Individual‟‟ An Individual investor with a net worth of at least N300 million, excluding real assets (such as automobiles, homes and furniture) as defined by SEC Rule 78(C) (2)

„‟Holder‟‟/Bondholder” A person in whose name a Bond is registered in the Register

“IGR” Internally Generated Revenue

“IMF” International Monetary Fund

“Instruments”

Any registered bond, promissory notes, syndicated notes or such other securities or debt instruments as may be issued by the Debt Office on behalf of the State, pursuant to the Bonds Law

“ISA” Investments & Securities Act No 29 of 2007

„‟Issue Date‟‟ The date on which the relevant Tranche of the Bonds is issued and allotted, as specified in the applicable Pricing Supplement

“Issuing Houses” Lead and Joint Issuing Houses

“Joint Issuing Houses” Afrinvest, FBN Capital, FCMBCM, Radix, Skye, Stanbic IBTC, Vetiva and Zenith Capital. The responsibilities of the parties being joint only as regards the roles of Issuing Houses/Book runners

“Joint Trustees” Joint Trustees appointed under the Bonds Law to represent and oversee the interests of the holders of Instruments and to invest, manage and administer the Sinking Fund established under the Bond Law

“LAMATA” Lagos Metropolitan Area Transport Authority

“LASG” or the “State” The Lagos State Government of Nigeria

“Lead Issuing House/Book Runner” Chapel Hill

“LFN” Laws of the Federation of Nigeria

“LSIRS” Lagos State Internal Revenue Service

„‟Maturity Date‟‟ The date as specified in each Applicable Pricing Supplement on which the principal amount falls due

“MDA” Ministry, Department or Agency

“MTC” Medium-Term Capital

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

“NBS” National Bureau of Statistics


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“NEEDS” National Economic Empowerment and Development Strategy

“OTC” Over-the-Counter

“PenCom” National Pension Commission

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

“PITA” Personal Income Tax Act, Cap P8, LFN 2004

“Pricing Supplement” The document issued in respect of a Series or Tranche which sets out the final terms and conditions of the Bond and which supplements the terms and conditions in, and incorporates the Shelf Prospectus by reference and all documents incorporated by reference therein. The Pricing Supplement is also known as the Supplementary Shelf Prospectus and should be read in conjunction with the Prospectus

“Programme Trust Deed” The Deed constituting the Bond between Lagos State and the Trustees annexed to the Bonds Law. The Programme Trust Deed and the Series Trust Deed relating to any relevant series of Bonds issued under the Programme.

„‟Qualified Institutional Investor‟‟ A purchaser of securities that is financially sophisticated and recognised by the Commission as such in accordance with SEC Rule 78 (C) (2)

“Radix” Radix Capital Partners Limited

“Receiving Bank” Access Bank Plc; Ecobank Nigeria Plc; Fidelity Bank Plc; First Bank of Nigeria Plc; First City Monument Bank Plc; Guaranty Trust Bank Plc; Keystone Bank Limited; Mainstreet Bank Limited; Skye Bank Plc; Sterling Bank Plc; Stanbic IBTC Banks Plc; Union Bank Plc; UBA Plc; Zenith Bank Plc

“Record Date” The date the list of holders of the bonds is extracted from the register for the purposes of making coupon payments, being a day which is 21 (Twenty-One) days immediately preceding the date on which the coupon falls due for payment

„‟Redemption Amount‟‟ The Aggregate principal amount outstanding in respect of a Bond on the Maturity Date

“Register” The Register of Bondholders to be maintained by the Registrars

“Registered Bank” Any Bank in Nigeria Licensed by the Central Bank of Nigeria

„‟Remittance Date‟‟ The date on which the Receiving Banks have to transfer the proceeds of each relevant series of Bonds to the Issuer

“SEEDS” State Economic Empowerment and Development Strategy

“Senior Bonds” Bonds that rank pari passu without any preference to one above the other by reason of priority of date of issue, currency of payment or otherwise with all other senior unsecured obligations of the State, present and future, except to the extent that any such obligations are by their terms expressed to be subordinated in right of payment.


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“Series” Bonds made up of one or more tranches which are expressed to be consolidated and form a series and are identical in all respects except for their respective Issue Dates, Interest Commencement Dates and/or Issue Prices. “A Tranche of Bonds together with any further Tranches of Bonds expressed to be consolidated and forming a single series with the Bonds of the original Tranche and the terms of which are identical. For this programme, Series shall mean each Tranche of the Bond being issued.

“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

“Shelf Prospectus or “Prospectus” This document issued in accordance with the Rules and Regulations of the Securities & Exchange Commission which details the aggregate size and the broad terms and conditions of the Bonds to be issued under the Programme.

“Sinking Fund” A fund specifically established by the Lagos State Government for each Bond issuance (and managed by the Trustees) for purposes of servicing coupon and repayment obligations thereon and into which payments shall be made from the Consolidated Debt Service Account („‟CDSA‟‟) in accordance with the terms and conditions of issue of the particular instrument.

“Skye” Skye Financial Services Limited

“Stanbic IBTC” Stanbic IBTC Bank PLC

„‟Supplementary Shelf Prospectus or SSP‟‟

Means and shall refer to the Pricing Supplement

“Tranche” Bonds issued pursuant to a Pricing Supplement the terms of which are identical in all respects‟‟-

„‟Terms and Condition‟‟ The terms and conditions of the Programme as set out in this Shelf Prospectus

“The Exchange” The Nigerian Stock Exchange or any other or further stock exchange(s) recognised and/or approved by the SEC on which any Bonds may from time to time be listed.

„‟Trustees‟‟ First Trustees Limited, Sky Trustees Limited, UBA Trustees Limited and Union Trustees Limited

“The Commission” or “the SEC” Securities & Exchange Commission

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

“The Laws”

The Lagos State Bonds, Notes and Other Securities Issuance Law 2008 and the Lagos State Debt Office (Establishment) Law 2008

“The Registrar” “Vetiva”

First Registrars Nigeria Limited Vetiva Capital Management Limited

“Zenith Capital” Zenith Capital Limited

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2. INFORMATION RELATED TO THE SHELF PROSPECTUS Presentation of Information This Shelf Prospectus has been prepared by Chapel Hill, Afrinvest, Radix, FBN Capital, FCMB CM, Skye, Stanbic IBTC, Vetiva and Zenith Capital in connection with the N167.5 Billion Debt Issuance Programme of the Lagos State Government (pursuant to which the Lagos State Government will issue either Bonds, Notes or Other Securities with maturities of five years and longer) 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 Lagos State Government and the members of the Lagos 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 pages 11-12 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 Programme, provided the Issuing Houses/Book Runners possess such information or can acquire it without undue effort or unreasonable expense. The receipt of this Shelf Prospectus or any information contained in it or supplied with it or subsequently communicated to any person does not constitute investment advice from Chapel Hill, Afrinvest, Radix, FBN Capital, FCMB CM, Skye, Stanbic IBTC, Vetiva and Zenith 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 Shelf Prospectus includes certain statements, estimates and projections with respect to the future performance of the Lagos State Government. These statements, estimates and projections reflect various assumptions by the Lagos State Government concerning its anticipated development programme, which have been included solely for illustrative purposes. These statements, estimates and projections should not however, be relied upon as a representation, warranty or undertaking, expressed or implied, as to the future performance of the Lagos State Government and actual occurrences may vary materially from the projected developments contained herein and/or the assumptions on which such statements, estimates and projections were based. Financial Information

The Lagos 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 the Lagos State Government for the five years ended December 31, 2011. 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”, “Description of the State” and “Risk Factors”. The Lagos 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.

2. INFORMATION RELATED TO THE SHELF PROSPECTUS

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Neither the State nor the Issuing Houses/Book Runners have independently verified the figures, market data or other information on which third parties have based their studies. 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. Solely for the convenience of the reader, this document presents unaudited translations of certain Naira amounts into US dollars at the rates of US$1.00 = N155. No representation is made that the Naira or US dollar amounts in this document could have been converted in US dollars or Naira, as the case may be, at any particular rate.

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3. PRICING SUPPLEMENT Following the publication of this Shelf Prospectus, a Pricing Supplement/Supplementary Shelf Prospectus will be issued in relation to each Series or Tranche of Bonds that are to be offered for subscription under the Programme. Each applicable Pricing Supplement/SSP will be cleared and approved by the SEC. Statements contained in the relevant Pricing Supplement shall, to the extent applicable (whether expressly, by implication or otherwise), be deemed to modify or supersede statements contained in this Shelf Prospectus. Any statements so modified shall not, except as modified or superseded, constitute a part of the Shelf Prospectus. The Issuer, in the event of any significant change, material mistake or inaccuracy relating to information included in this Shelf Prospectus which is capable of affecting the assessment of the Bonds, shall prepare an addendum to this Shelf Prospectus for use in connection with any subsequent issue of Bonds, under the Debt Issuance Programme, which shall be subject to the Commission‟s clearance.

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4. PARTIES TO THE OFFER

Issuer

The Lagos State Government Lagos State Secretariat Alausa, Ikeja Lagos

Representatives of the State Executive Council

His Excellency, Mr. Babatunde Raji Fashola, SAN Governor and Chairman State Executive Council

Mrs. Joke Orelope-Adefulire Deputy Governor

Mrs. Idiat Oluranti Adebule Secretary to the State Government

Mr. Tokunbo Abiru Honourable Commissioner for Finance

Mr. Adeola Ipaye Honourable Commissioner for Justice & Attorney General

Mr. Ben Akabueze Honourable Commissioner for Economic Planning & Budget

Mrs. Olusola Oworu Honourable Commissioner for Commerce and Industry

Mr. Lateef Tunji Bello Honourable Commissioner for Environment

Mrs. Florence Oguntuase

Honourable Commissioner for Establishment and Training

Dr. Jide Idris Honourable Commissioner for Health

Mr. Bosun Jeje Honourable Commissioner for Housing

Mr. Ademorin Kuye Honourable Commissioner for Local Government and

Chieftaincy Affairs

Mr. Olutoyin Ayinde Honourable Commissioner for Physical and Urban Planning


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Representatives of the State Executive Council (Continued)

Honourable C.O. Ojelabi Honourable Commissioner for Rural Development

Mr. Adebiyi Mabadeje Honourable Commissioner for Science and Technology

Dr. Wale Ahmed Honourable Commissioner for Special Duties

Mr. Lateef Aderemi Ibirogba Honourable Commissioner for Information & Strategy

Mr. Taofiq Tijani Honourable Commissioner for Mineral Resources

Mrs. Olayinka Oladunjoye Honourable Commissioner for Education

Prince Gbolahan Lawal Honourable Commissioner for Agriculture and Cooperatives

Mr. Oladisun Holloway Honourable Commissioner for Tourism and Intergovernmental Relations

Mr. Kayode Isiak Opeifa Honourable Commissioner for Transportation

Prince Adesegun Oniru Honourable Commissioner for Water Infrastructure Development

Mr. Enitan Oshodi

Honourable Commissioner for Youth, Sports and Social Development Dr. Obafemi Kadri Hamzat Honourable Commissioner for Works & Infrastructure Mr. Mohammed Oyinlomo Danmole Honourable Commissioner for Home Affairs and Culture

Accountant-General to the State

Mr David. O.A Sunmoni, FCA

Lead Issuing House/Book Runner Chapel Hill Advisory Partners Limited 1st Floor,45 Saka Tinubu Street Victoria Island Lagos


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Joint Issuing Houses/Book Runners Afrinvest (West Africa) Limited 27 Gerrard Road Ikoyi Radix Capital Partners Limited 3rd Floor, AIICO House PC 12 Afribank Street Victoria Island Lagos

FBN Capital Limited 16 Keffi Street South-West Ikoyi Lagos

FCMB Capital Markets Limited First City Plaza 44 Marina Lagos

Skye Financial Services Limited 3 Akin Adesola Street Victoria Island Lagos

Stanbic IBTC Bank PLC I.B.T.C. Place Walter Carrington Crescent Victoria Island Lagos

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

Zenith Capital Limited 4th Floor, Zenith Heights Plot 87 Ajose Adeogun Street Victoria Island Lagos

Lead Stockbroker Marina Securities Limited

Marina House, 10 Amodu Ojikutu Street Victoria Island Lagos

Joint Stockbrokers Chapel Hill Denham Securities Limited 2nd Floor, 45 Saka Tinubu Street Victoria Island Lagos


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Afrinvest ( West Africa) Limited 27 Gerrard Road Ikoyi Lagos

Camry Securities Limited Wesley House Annex 21/22 Marina Lagos

Clearview Investment Company Limited 6th Floor, NCR Building 6 Broad Street Lagos

CSL Stockbrokers Limited First City Plaza 44 Marina Lagos

Dominion Trust Limited 207 Igbosere Road Lagos

Equity Capital Solutions Limited Kingsway Building 2 Davies Street Marina Lagos

FBC Trust & Securities Limited 3B Manuwa Street Keffi Lagos

FBN Securities Limited 16 Keffi Street South-West Ikoyi Lagos F&C Securities Limited 15, (Old 13) Ribadu Road Off Awolowo Road Ikoyi FIS Securities Limited 206 Igbosere Road Lagos

Greenwich Securities Limited Plot 1689A Oyin Jolayemi Street Victoria Island Lagos


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GTB Securities Limited 37 Karimu Kotun Street Victoria Island Lagos

Profund Securities Limited PC1 Engineering Close Off Idowu Taylor Victoria Island Lagos

PSI Securities Limited Cathedral House (3rd Floor) 2 Odunlami Street Lagos

Pyramid Securities Limited ICON House (8th Floor) Plot 999 Idejo Street Victoria Island Lagos

Reward Investments Limited New Africa House (10th Floor) 31 Marina Lagos

Security Swaps Limited Orikpo House 5 Idowu Taylor Victoria Island Lagos

Signet Investment & Securities Limited Church House 29 Marina Lagos Island Lagos

Stanbic IBTC Stockbrokers Limited IBTC Place Walter Carrington Crescent Victoria Island Lagos

WSTC Financial Services Limited 2 Maitama Sule Ikoyi Lagos

Zenith Securities Limited 4th Floor, Zenith Heights 87 Ajose Adeogun Street Victoria Island Lagos


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Joint Solicitors to the Offer Banwo & Ighodalo 98 Awolowo Road South- West Ikoyi Lagos

Simmons Cooper Partners 9th Floor, Fortune Towers 27/29 Adeyemo Alakija Street Victoria Island Lagos

Sofunde Osakwe Ogundipe & Belgore St. Nicholas House Catholic Mission Street Lagos

Joint Trustees to the State First Trustees Limited A.G. Leventis Building (2nd Floor) 42/43 Marina Lagos

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

UBA Trustees Limited UBA House (2nd Floor) 57 Marina Lagos

Union Trustees Limited 40 Marina Lagos

Rating Agencies Agusto & Co UBA House (5th Floor) 57 Marina Lagos

Global Credit Rating Co New Africa House (17th Floor) 31 Marina Lagos

Reporting Accountants

KPMG Professional Services 22A Gerrard Road Ikoyi Lagos

Registrars to the State First Registrars Nigeria Limited Plot 2 Abebe Village Road Iganmu Lagos


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Fidelity Bank Plc 2 Kofo Abayomi Street Victoria Island Lagos

First Bank of Nigeria Plc 35 Marina Lagos

First City Monument Bank Plc Primrose Tower 17A Tinubu Street Lagos

Guaranty Trust Bank Plc Plot 1669 Oyin Jolayemi Street Victoria Island Lagos Keystone Bank Limited Plot 707 Adeola Hopewell Street Victoria Island Lagos Mainstreet Bank Limited Mainstreet Plaza 51/55 Broad Street Lagos

Skye Bank Plc 3 Akin Adesola Street Victoria Island Lagos [

Sterling Bank Plc Sterling Towers 20 Marina Lagos

Stanbic IBTC Bank PLC IBTC Place Walter Carrington Crescent Victoria Island Lagos

Receiving Banks Access Bank Plc Plot 1665 Oyin Jolayemi Street Victoria Island Lagos

Ecobank Nigeria Plc Plot 21 Ahmadu Bello Way Victoria Island Lagos


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UBA Plc UBA House 57 Marina Lagos

Zenith Bank Plc Zenith Heights Plot 87 Ajose Adeogun Street Victoria Island Lagos

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RC 622258RC 622258

5. THE PROGRAMME

A copy of this Shelf Prospectus and the documents specified herein has been delivered to the SEC for clearance and registration.

This Prospectus is being issued in compliance with the provisions of the ISA, the Rules and Regulations of The Commission and the listing requirements of The Exchange and contains particulars in compliance with the requirements of SEC and The Exchange, for the purpose of giving information to the public with regards to the N167.5 Billion Debt Issuance Programme by the Lagos State Government..

The Lagos State Government represents that it has taken all reasonable care to ensure that the information concerning the State contained in this Prospectus is true and accurate in all material respects on the date of this Prospectus and that as of the date hereof there are no other material facts in relation to the State the omission of which would make misleading any statement herein, whether in fact or opinion.

LEAD ISSUING HOUSE/BOOK RUNNER:

JOINT ISSUING HOUSES/BOOK RUNNERS:

on behalf of LAGOS STATE GOVERNMENT OF NIGERIA

are authorised to receive applications for the N167,500,000,000 Debt Issuance Programme

[Payable in full on Application]

This Shelf Prospectus contains:

1. on page 19, the declaration by the Issuer to the effect that it did not breach any terms and conditions in respect of borrowed monies which resulted in the occurrence of an event of default and an immediate recall of such borrowed monies during the twelve calendar months immediately preceding the date of filing an application with the SEC for the registration of this Shelf Prospectus;

2. on pages 67-80 a Reporting Accountant‟s report prepared by KPMG Professional Services for incorporation in this Shelf Prospectus;

3. on pages 65-66, the Rating Reports prepared by Agusto & Co and Global Credit Rating Co. for incorporation in this Shelf Prospectus; and

4. on page 81, details of claims and litigation commenced against the State during the twelve calendar months immediately preceding the date of filing the application with SEC for the registration of this Shelf Prospectus.

This Shelf Prospectus has been registered with the SEC and is valid until [.], 2014. No Bonds will be issued on the basis of this Shelf Prospectus read together with any Pricing Supplement/SSP later than two years after the issue date indicated on the cover of this Shelf Prospectus. This Shelf Prospectus can be obtained from the offices of the Commission, the Issuer, the Lead and Joint Issuing Houses and is also available electronically on the State‟s website (www.lagosstatse.gov.ng) and on SEC‟s website (www.sec.gov.ng) throughout the Validity Period.

RC261272 RC 733583

RC672560 RC 125097

http://www.lagosstatse.gov.ng/

http://www.sec.gov.ng/

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6. DECLARATION BY THE ISSUER

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7. PARTICULARS OF THE PROGRAMME

7.1. SUMMARY OF TERMS & CONDITIONS OF THE PROGRAMME

The following summary does not purport to be complete and is taken from, and qualified in its entirety by the remainder of this Prospectus and, in relation to the terms and conditions of any particular Tranche of Bonds, the applicable Pricing Supplement/SSP. Words and expressions defined in „„Form of the Bonds‟‟ and „„Terms and Conditions of the Bonds‟‟ shall have the same meaning in this summary:

Issuer: Lagos State Government

Programme Description: A Debt Issuance Programme (the “Programme”) being undertaken by Lagos State through which a Bond or a series of Bonds with maturities of 5 years or longer will be issued.

Enabling Law The Bonds Law 2008

Programme Amount: Up to N167,500,000,000 (One Hundred and Sixty Seven Billion Five Hundred Million Naira)

Par Value: N1,000

Tenor: The tenor of a particular Tranche shall be determined by the Issuer and the Joint Issuing Houses and will be specified accordingly in the applicable Pricing Supplement issued in respect

Lead Issuing House Chapel Hill

Joint Issuing Houses: Afrinvest, Radix

FBN Capital, FCMBCM, Skye Financial, Stanbic IBTC, Vetiva, Zenith Capital

Dealers: Any Dealer appointed from time to time by the State and specified in the relevant Pricing Supplement/ Supplementary Shelf Prospectus(s)

Registrar/Paying Agent: First Registrars and/or such other registrar/paying agent as may be specified in the relevant Pricing Supplement (s)

Listing Agent: The Exchange, and/or such other agent as may be specified in the relevant Pricing Supplement/Supplementary Shelf Prospectus(s)

Methods of Issue: Bonds under this Programme may be issued by way of a Book Build, Public Offering, Private Placement and/or such methods as described in the Pricing Supplement/SSP approved by SEC.

Use of Proceeds: The Use of Proceeds for each Tranche issued under the Programme shall be specified in the applicable Pricing Supplement/SSP

Day Count Fraction: Actual/365 (the actual number of days in a month and 365 days in a year). A different Day Count convention may be stipulated in the applicable Pricing Supplement/SSP

Interest Rates: Bonds may be interest-bearing or non-interest bearing. Interest (if applicable) may be at a fixed or floating rate as indicated in the relevant Pricing Supplement (s).


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Variable Coupon Amount Bonds: The Pricing Supplement/Supplementary Shelf Prospectus issued in respect of each issue of Variable Coupon Bonds will specify the basis for calculating the amounts of interest payable, which may be by reference to a variety of financial instruments, a currency exchange rate or any other index or formula or as otherwise provided in the relevant Pricing Supplement (s)/SSP.

Zero Coupon Bonds: Zero Coupon Bonds may be issued at a discount to par and will not bear interest.

Other Bonds: Terms applicable to High Interest Bonds, Low Interest Bonds, Step-up Bonds, Step-Down Bonds, Dual Currency Bonds, Reverse Dual Currency Bonds, Optional Dual Currency Bonds, Index-Linked Bonds and any other type of Bonds which the State and any Dealer or Dealers may agree to issue under the Programme, subject to compliance with all applicable relevant laws, regulations and directives will be set out in the relevant Pricing Supplement/SSP.

Currencies: Bonds will be denominated in Nigerian Naira or such currency or currency units as may be agreed among the State, the Issuing Houses, the relevant Dealer(s) and the Issuing and Paying Agent, subject to compliance with all applicable legal or regulatory requirements.

Status of the Bonds: The Bonds will be issued as Senior Bonds and are direct, unsecured and general obligations of the State.

The Senior Bonds will rank pari passu without any preference to one above the other by reason of priority of date of issue, currency of payment or otherwise with all other senior unsecured obligations of the State, present and future, except to the extent that any such obligations are by their terms expressed to be subordinated in right of payment.

The Bonds qualify as securities in which the Trustees may invest under the Trustees Act. In addition, the Bonds are securities in which Pension Fund Administrators may invest under the Pension Reform Act and the Regulations on Investment of pension fund assets issued by PenCom.

Ratings The Bonds issued under this Programme will be rated by two ratings agencies.

Events of Default: The events of default under the Bonds are as specified in the Trust Deeds.

Form of Bonds: The Bonds shall be issued in registered form and shall be transferable. The issue and ownership of the Bonds will be effected and evidenced by the Particulars of the Bond being entered in the Register by the Registrar and the Bonds being electronically registered in the Central Security Clearing System accounts of the investor. The Bonds may also initially be represented by certificate(s). Such certificates will be confirmed by the Registrar and may be dematerialized and held in electronic book entry form at the CSCS.


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Issuance in Series: Bonds will be issued in Series. The Bonds in each Series will be subject to identical terms, whether as to currency or maturity or otherwise, except that the issue date, the amount of the first payment of interest and/or the denomination thereof may be different. Each Series may comprise one or more tranches) issued on different issue dates. A Series may only be comprised of Bonds in registered form.

Issue Price: Bonds may be issued at par or at a discount or premium to par.

Maturity of Bonds: Bonds may be issued with maturities of five years or longer as may be agreed between the Issuer and the Issuing Houses and as indicated in the applicable Pricing Supplement/SSP, subject to such minimum or maximum maturities as may be allowed or required from time to time by the Issuer or any laws or regulations applicable to the Issuer or the relevant specified currency.

Denominations: Bonds will be issued in such denominations as may be agreed between the State and the Issuing Houses and as specified in the relevant Pricing Supplement/SSP, subject to compliance with all applicable legal and regulatory requirements, and in accordance with usual market practice.

Early Redemption: Early redemption will be permitted only to the extent specified in the relevant Pricing Supplement/SSP and then also subject to any applicable legal or regulatory limitations.

Redemption: Bonds may be redeemable at par or at such other redemption amount as may be specified in the relevant Pricing Supplement/SSP.

Governing Law: The Bonds and all related contractual documentation will be governed by, and construed in accordance with, Nigerian law.

Listing: Each Series of Bonds may be listed on The Exchange and/or admitted to listing, trading and/or quotation by any other listing authority, stock exchange and/or quotation system as may be agreed between the State and the Issuing Houses; as specified in the relevant Pricing Supplement/SSP.

Terms and Conditions: The Terms and Conditions applicable to each Series will be agreed between the State and the relevant Issuing House or other purchaser at or prior to the time of issuance of such Series, and will be specified in the relevant Pricing Supplement/SSP. The Terms and Conditions applicable to each Series will include those set out on pages [23 to 28] hereof as supplemented, modified or replaced by the relevant Pricing Supplement/SSP.

Pricing Supplement or

Supplementary Shelf Prospectus: The commercial terms of each Series will be set forth in a Pricing Supplement/SSP which, will (i)define the legal terms of the issue and (ii) act as a mechanism for the listing of the Bonds.

Bond Trading & Liquidity: Bonds may trade OTC between banks and qualified market counterparties. Dealers will be obliged to quote two-way prices for the Bonds and satisfy additional terms specified in the Dealing Agreement.


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Other Conditions: Such other Terms and Conditions as may be incorporated by reference into, modified by, or supplemented by an applicable Pricing Supplement/SSP.

7.2. TERMS & CONDITIONS OF THE BONDS

1. Form and Description

1.1. The Bonds

The Debt Issuance Programme is constituted under a Programme Trust Deed (the “Programme Trust Deed”) between Lagos State (“the Issuer”) of the first part and First Trustees Nigeria Limited, UBA Trustees Limited, Union Trustees Limited and Skye Trustees Limited (the “Trustees”) which expression shall include all persons for the time being the trustee or trustees under the Trust Deed of the other part. Any Tranche of Bonds which is to be created and issued pursuant to the Programme Trust Deed shall be constituted by, be subject to and have the benefit of a Series Trust Deed (the “Series Trust Deed”) between the Issuer and the Trustees. The Issuer shall execute and deliver such Series Trust Deed to the Trustees containing such provision (whether or not corresponding to any of the provisions contained in the Programme Trust Deed) as the Trustees may require. Each Series Trust Deed shall set out the form of the Tranche of Bonds to be so constituted thereby and shall be accompanied by legal opinions (in form and substance satisfactory to the Trustees) or supporting authorizations/approvals as may be required by the Trustees. The Bonds will be issued in registered form and in series (each “a Series‟‟), and each Series will be the subject of a Pricing Supplement/SSP prepared by the Joint Issuing Houses on behalf of the State, the terms set forth in which may supplement or vary any of these Conditions. The issue and ownership of the Bonds will be effected and evidenced by the Particulars of the Bond being entered in the Register by the Registrar and the Bonds being electronically registered in the CSCS accounts of the investor

A copy of each Pricing Supplement/SSP will be available at the specified office of each of the Issuing Houses. A copy of the Pricing Supplement/SSP will be lodged with The Exchange or any other exchange in respect of Bonds to be listed thereon.

1.2. Description

The Bonds are denominated in Nigerian Naira (but may also be denominated in such other currency specified in the relevant Pricing Supplement/SSP), with coupons paid (if any) semi-annually in arrears or at such other intervals specified in the Pricing Supplement/SSP. Bonds may be issued from time to time, subject to the applicable terms of this Prospectus, by Book Build, Private Placement, Public Offering and/or any other method as described in the Pricing Supplement/SSP. Unless otherwise specified in the relevant Pricing Supplement/SSP, the Bonds are redeemable at face value on maturity.

2. Events of default

The events of default under the Bonds are as specified within the Programme Trust Deed. 3. Certificates of Title

On application by any Bondholder, the Registrar will issue to the Bondholder a certificate of title certifying that the Bondholder is the registered holder of the Principal of Bonds as referred to therein. The certificate of title will be evidence of the ownership of the Bonds to which it relates by the Person named therein as the Bondholder. The transfer, whether by delivery or otherwise, of any such certificate of title will not operate as a transfer of the legal interest of the Bondholder in the Bonds to which it relates. Unless such transfer of Bonds is in such form as the Registrar prescribes and in accordance with the relevant section of this Prospectus. The Registrar


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will enter in the Register particulars of the issue of every certificate of title to Bonds. The entries in the Register shall in the absence of manifest error, be conclusive evidence of the facts, matters and transactions contained therein.

The Registrar will not record any dealing and the State will not repay any Bonds until the certificate of title has been cancelled.

Where any certificate of title to Bonds has been lost, destroyed, mutilated or rendered illegible, the Registrar, on receiving evidence to its satisfaction of the loss or destruction or, as the case may be, on the surrender of the mutilated or illegible certificate of title, may on such terms and subject to such conditions as the Registrar prescribes, issue a substitute certificate of title with the word “substitute” stamped or written thereon and will record the issue thereof in the Register. Every such substitute certificate of title will have the same effect, to all intents and purposes, as the original certificate of title for which it was substituted.

4. Repayments

Bonds are domiciled for repayment in Nigeria and will be repaid to the Bondholder Registered on the Record Date immediately prior to the Maturity Date by crediting an account at any Registered Bank in Nigeria. If a bank account has not been provided, the Principal will be repaid by the issuance of a warrant. Provided however that the Registrar shall withhold amounts above N10 Million until a bank account is specified in writing by the Bondholder and such Bondholder shall not be entitled to any further Coupon or other payment in respect of any such delay. No additional interest will be paid on any amounts in respect of which a warrant is issued. In the case where Bonds are held through CSCS, principal repayments will be credited to the cash account of the participants as specified on the application form. The Registrar will accept instructions prior to the Record Date from Bondholders in regard to repayment of the Bonds. Payment will be made on the Maturity Date but, if the Maturity Date is not a Business Day, payment will be made on the next succeeding Business Day without payment of additional interest. Bonds are not repayable prior to the Maturity Date except as otherwise stipulated in any relevant Pricing Supplement/SSP.

5. Status of the Bonds

The Bonds will be issued as Senior Bonds, and will be direct, and unconditional obligations of the Issuer and shall rank pari passu among themselves and equally with all other existing obligations of the Issuer. The Bonds qualify as securities in which trustees may invest under the Trustees Investments Act Cap. T22 Laws of the Federation of Nigeria 2004 and also qualify as securities in which Pension Fund Administrators may invest pension fund assets as provided under the Pension Reform Act 2004 and the Regulations on Investment of Pension Fund Assets issued by the National Pension Commission.

6. Security Structure

The Security Structure will be determined and indicated in the Pricing Supplement/SSP issued for a Series or Tranche. Where an ISPO is not issued in respect of any Series or Tranche of Bonds, the principal source of repayment for bonds issued under the Programme will be the Internally Generated Revenues („‟IGRs‟‟) of the Issuer, in consequence of which the Issuer will cause separate and distinct Sinking Funds to be created for each issuance. The Sinking Fund(s) will be funded from the Consolidated Debt Service Account (“CDSA”) and will be managed by trustees.


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6.1. Consolidated Debt Service Account The CDSA is a dedicated internally segregated savings account for Lagos State established under the provisions of the Bonds Law. The Bonds Law provides for a CDSA to be created by the Lagos State Government into which a minimum of 15% of the State‟s IGR will be deposited on a monthly basis. The Bonds Law further stipulates that funds accumulated within the CDSA shall be utilised to:

(i) pay interest and principal on the State‟s debt obligations; and

(ii) accumulate a reserve for the additional security of Lagos State‟s debt obligations.

The Management of the CDSA is the sole responsibility of independent Joint Trustees to be appointed by the State. The Joint Trustees invest all sums in the CDSA in Federal Government of Nigeria Bonds (and other instruments) as provided by the Bonds Law.

7. Bondholder’s Protection

The State has appointed First Trustees Limited, UBA Trustees Limited, Union Trustees Limited and Skye Trustees Limited to act as Trustees for the Bondholders. The relationship between the State and the Trustees is governed by a Trustee Deed, inter alia, specifying the powers, authorities and obligations of the Trustees and the State. The Bondholder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to the Trustees or any of their agents or authorized officials to do all such acts, deeds, matters and things in respect of or relating to the Bonds as the Trustees may in their absolute discretion deem necessary or require to be done in the interest of the Bondholder(s). Any payment made by the State to the Trustees on behalf of the Bondholder(s) shall discharge the State pro tanto to the Bondholder(s). The Trustees will protect the interest of the Bondholders in the event of default by the State with regard to timely payment of interest and repayment of principal and the Trustees will take necessary action at the cost of the State. The Trustees shall also ensure that remittances are made in strict compliance with the Trust Deed.

8. Redemption

8.1. Optional Early Redemption (Put)

If the relevant Pricing Supplement/SSP so specifies, the State shall, upon the exercise of the relevant option by the holder of any Bond of the relevant Series, redeem such Bond on the date or the next of the dates specified in the relevant Pricing Supplement/SSP at its principal amount (or such other redemption amount as may be specified in the relevant Pricing Supplement/SSP), together with accrued interest (if any) thereon. In order to exercise such option, the holder must, not less than forty-five days before the date so specified (or such other period as may be specified in the relevant Pricing Supplement/SSP), deposit the relevant Bond (together, in the case of an interest-bearing Definitive Bond, with any unexpired coupons appertaining thereto) with the Registrar together with a duly completed redemption notice in the form which is available from the specified office of the Paying Agent(s) or, as the case may be, the Registrar.

8.2. Optional Early Redemption (Call)

If the relevant Pricing Supplement/SSP so specifies, then the State may, upon the expiry of the appropriate notice and subject to such conditions as may be specified in the relevant Pricing Supplement/SSP, redeem all (but not, unless and to the extent that the relevant Pricing Supplement/SSP specifies otherwise, some only), of the Bonds of the relevant Series on the date specified in the relevant Pricing Supplement/SSP.


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9. Allotment and Subscription

9.1. Allotment

The Allotment of Bonds in respect of successful bids for each maturity will be made in ascending order of yields bid. At the highest yield accepted, Bonds will, if necessary, be allotted as far as practicable on a pro-rata basis in relation to the amount available at that yield, except that successful bidders shall be allotted an amount that is an exact multiple of the Principal with the minimum allotment being the amount specified.

9.2. Oversubscription

In the event that the number of bidders at the highest acceptable yield exceeds the amount of Bonds available at that yield per tranche, the State may either increase the amount available up to 15% of the size of that particular tranche so that a minimum number of Bonds can be issued on a pro-rata basis to each successful bidder at that yield, or decrease the amount available so that no allocation of Bonds is made at that yield; provided however that where the State increases the amount available this will be subject to 15% of the oversubscription (or such amounts as permitted by the SEC).

9.3. Under-issuance The State reserves the right to issue less than the full amount of Bonds offered in any tender where the offer is under-subscribed.

10. Registration, Settlement and Transfer

10.1. Settlement Price

The settlement price will be rounded to the nearest Naira (to [1/100th] of a Naira being rounded down and to [1/100th] of a Naira being rounded up).

Settlements during the period from the Record Date up to, but not including, the Coupon Interest Payment Date of any Bonds offered for tender will be on an ex-coupon interest basis. All other settlements will be on a cum-coupon interest basis.

10.2. Settlement

Bidders must fully pay for the Bonds allotted to them on the Settlement Date.

For any Bonds not fully paid for by a successful bidder after the expiry of the Settlement Date:

- the State reserves the right to cancel those Bonds; or

- the Issuing Agent reserves the right to take up those Bonds.

10.3. Registration of Bonds

Bonds may be held by individual persons with right of survivorship. Organizations or trusts which are not incorporated should complete their application in the full name(s) of the trustee(s). No notice of any trust in respect of any Bonds will be entered in the Register or receivable by the Registrar. Each Bondholder is to be regarded as the absolute beneficial owner of the Bonds Registered in its name and State and the Registrar shall not be affected by any trust or other equity affecting any Bond, whether or not it is aware of the same. If two or more Persons apply to be registered as Bondholders as tenants in common, the Registrar may, after receiving an application from either Person and notifying the other Person(s) of its intentions to do so, divide the Bonds into the share for which each Person is expressed to be entitled and register each Person as the holder of the Bonds representing the Person‟s share. If the Bonds cannot be shared where the minimum is 10,000 and a multiple of 5,000 the Registrar may refuse to accept the application.


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10.4. Notices of Registration/Transfer

a. Register

The Registrar shall enter in the Register the following particulars of every holder of Bonds:

- Name and address of the Bondholder;

- Principal of the Bonds held;

- Coupon Interest Rate payable on the Bonds;

- Coupon Interest Payment Dates of the Bonds;

- Maturity Date of the Bonds;

- Such other particulars as may, from time to time, be required by the State; and

- Such other particulars as may, from time to time, be considered necessary by the Registrar.

The Registrar may correct errors and remedy omissions in the Register and may call in any outstanding certificates of title for that purpose.

b. Transfer of Bonds

The Bondholder may, by way of a form of transfer in such form as the Registrar prescribes, transfer to any other person all or any of the Bonds of which it is the holder. Transfers must be in multiples of 5,000 and no transfer may be made if, as a result thereof, the Principal of the Bonds Registered in the name of the transferor or the transferee would be less than N5,000,000. No transfer will be registered in the periods falling between each relevant Record Date and the Coupon Payment Date, and the Record Date immediately prior to the Maturity Date, up to the Maturity Date. On production to the Registrar of a duly executed form of transfer accompanied by the certificates of title (if issued) and such other evidence as the Registrar may require to prove the authority of the persons signing the same to sign on behalf of the transferor, the Registrar will enter in the Register the name of the transferee as the registered holder of the Bonds to which the form of transfer relates. Upon registration of a form of transfer or other assignment on the Register, the transferee will be recognized as entitled to the Bonds.

11. Certification of Transfers (Markings)

The Registrar may, on the application of a Bondholder, certify on a form of transfer of Bonds that the person named therein as transferor is entered on the Register as the Bondholder. Any such certification may be subject to such conditions as the Registrar prescribes. Where a form of transfer of Bonds has been certified under this section, the Registrar may refuse to record any dealing with the Bonds until the form has been produced to it and the certification thereon cancelled, or the certification has expired by virtue of its conditions, or the Bonds have matured.

The Registrar will enter in the Register particulars of every form of transfer certified under this section. 12. Method of Payments of Coupon and Principal Amount

Bonds will bear Coupon on their respective Principals at the Coupon Rate specified for each Series. Coupon Rates may be fixed, floating, variable or index-linked with respect to an interest or exchange rate. Subject to the terms of each Pricing Supplement/SSP Coupon is payable semi-annually (half the annual amount being


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paid) in arrears on each Coupon Payment Date up to and including the Maturity Date whereupon Coupon Interest will cease to accrue on the Bonds. The Principal Sum due will be paid at maturity.

Coupon and principal payments are domiciled for payment in Nigeria. Payments of the Coupon Amount and the Principal Amount at maturity will be made on behalf of the Issuer by the Registrar. The relevant amount will be paid by transfer to the bank account(s) specified on the Commitment/application Form, in respect of amounts exceeding N10 million or by warrant despatched by post or other suitable means (in the case of amounts below N10 million) to the Bondholder. No additional interest will be paid on any amounts in respect of which a warrant is issued. The first Coupon payment will be for a full semi-annual period and will be payable on the Coupon Payment Date next following the issue date as described in the relevant Pricing Supplement. However, if issuance is in the period from the Record Date up to, but not including, the Coupon Payment Date, the payment (which will only be for a full semi-annual period) will be made on the next succeeding Coupon Interest Payment Date. The Registrar will accept instructions prior to the Record Date from Bondholders with regard to Coupon Payments. If the Coupon Interest Payment Date is not a Business Day, Coupon Payment will be made on the next succeeding Business Day without payment of additional interest. The Coupon will cease to accrue on the Bonds on the Maturity Date. If Zero Coupon Bonds are to be issued, the relevant Pricing Supplement/SSP will set out the applicable provisions.

13. Purchase, Cancellation and Further Issues

The State may at any time offer to purchase, beneficially, Bonds from any person. Any Bonds so purchased may be retained, sold or cancelled at the discretion of the State. The State reserves the right to issue Bonds with the same Maturity Date and Coupon Interest Rate as any other Bonds already on issue, from time to time and whether by Invitation to Tender or otherwise subject to the Programme limit.

14. Bondholders Payments for Bonds Allotted/Subscribed

Investors will be required to pay for bonds in the currency specified in the relevant Pricing Supplement/SSP. Each Issuing House may, under certain terms and conditions, arrange for the conversion of the investors‟ currency into the specified currency to enable investors pay for the bonds in the specified currency. Each such conversion will be made by such Issuing House on such terms and subject to such conditions, limitations and charges as such dealer may from time to time establish in accordance with prevailing foreign exchange practices, and subject to any applicable laws and regulations. All costs of conversion will be borne by such investors. A Certificate of Capital Importation will be issued in respect of such currency conversion(s).

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8. TAX CONSIDERATIONS

The Bonds issued under the Programme 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. In addition, proceeds from the disposal of Bonds are exempt from taxation.

The taxation landscape in Nigeria regarding debt securities, and more particularly as it relates to Bonds, changed significantly following an announcement on March 16, 2010 (by the then Acting President of Nigeria, Goodluck Jonathan). The announcement communicated the approval of a waiver of taxes on all categories of bonds and short term Federal Government securities; including taxes prescribed pursuant to the Companies Income Tax Act, Personal Income Tax Act, Value Added Tax Act and the Capital Gains Tax Act, with the aim of eliminating respective taxes payable on such investments. The details of the tax exemptions – valid for a period of ten (10) years from December 9, 2011 – are contained in the Companies Income Tax (Exemption of Bonds and Short Term Government Securities) Order 2011 and the Value Added Tax (Exemption of Proceeds of the Disposal of Government and Corporate Securities) Order 2011. This summary of the tax regime has been provided for information purposes only. A prospective investor who is in any doubt as to his/her tax position or who is subject to taxation in any jurisdiction other than in Nigeria should consult his/her own professional advisers without delay as to the consequences of an investment in the Bonds in view of his/her own circumstances. Neither the Issuer, the Issuing Houses or the Issuer‟s tax advisers shall be liable to any subscriber in any manner whatsoever for placing reliance upon the contents of this section.

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9. LAGOS STATE

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

released by either the Lagos State Ministry of Information; other public and private organizations including the CBN, the Economic

Intelligence Unit, the World Bank, the International Monetary Fund, the Nigerian Bureau of Statistics; or other financial and economic

publications. 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.

9.1. OVERVIEW OF LAGOS STATE

History Lagos State was created on May 27, 1967 under the State (Creation and Transitional Provisions) Decree No. 14 (1967) which restructured Nigeria‟s Federation into 12 (twelve) States. Prior to this, Lagos Municipality had been administered by the Federal Government with the Federal Ministry of Lagos Affairs being the regional authority; while the Lagos City Council governed the City of Lagos. The metropolitan areas (Colony Province) of Ikeja, Agege, Mushin, Ikorodu, Epe and Badagry were administered by the Western Region. The State took off as an administrative entity on 11 April 1968 with Lagos Island serving the dual roles of being the State and Federal Capitals. However, in 1976, Lagos Island ceased to be the capital of the State; the capital having been moved to Ikeja. The seat of the Federal Government was relocated to Abuja on December 12, 1991 and Lagos also ceased to be Nigeria‟s political capital. Lagos nevertheless remains the nation‟s economic and commercial capital. Location

The State is located in the South-Western part of Nigeria along the narrow coastal plain of the Bight of Benin. It lies between Longitude 20° 42‟E and 3° 22‟E and between Latitude 6° 22‟ N and 6° 42‟ N. It is bound in the North and East by Ogun State of Nigeria, in the West by the Republic of Benin and stretches over 180 km along the Guinea Coast of the Bight of Benin on the Atlantic Ocean. The State comprises five administrative divisions of Lagos (Eko), Ikeja, Ikorodu, Epe and Badagry and 20 Local Government Areas. Geographically, Lagos State covers an area of 358,861 hectares or 3,577 square kilometres, making it geographically the smallest state in Nigeria. Population Lagos State is geographically the smallest state in Nigeria covering an area of 356,861 hectares, with 21% of this area being wetlands. According to the recent census conducted by the National Population Commission (“NPC”), the State has a population of over 18 Million out of a national estimate of 170 million. The United Nations estimates that at its present growth rate, Lagos State will be the third largest mega city in the world by 2015 after Tokyo in Japan and Bombay in India. The rate of population growth is about 600,000 per annum with a population density of about 4,193 persons per sq. km. In the built-up areas of the Lagos metropolis, the average density is over 20,000 persons per square km. Current demographic trend analysis reveals that the State population growth rate of 8% has resulted in its capturing of 36.8% of Nigeria‟s urban population (World Bank, 1996) estimated at 49.8 million people of the nation‟s 170 million population. The implication is that despite a country population growth of is 4 - 5% and global 2%, the State‟s population is growing ten times faster than New York and Los Angeles with grave implications for urban sustainability. The Structure of Government Executive The affairs of the State are overseen by the Governor who is its chief executive. The Governor is elected to a four-year term of office renewable only for another four year term. He is vested with executive powers, which subject to the provisions of the Constitution and of any law made by the House of Assembly, may be exercised directly or through the Deputy Governor and Commissioners or Advisers. The Governor is empowered to appoint Commissioners and Advisers and to assign responsibilities to them, including the administration of any

9. LAGOS STATE

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department of Government. An appointment to the office of Commissioner is deemed to have been made where no return has been received from the House of Assembly within (21) twenty-one working days of the House‟s receipt of the nomination of such a Commissioner from the Governor. Legislature

The legislative powers of a state are vested in a unicameral legislative body called the House of Assembly. The current House of Assembly, constituted after the elections on April 21, 2007, has 40 members. A state House of Assembly is required by the Constitution to consist of not less than 24 twenty-four and not more than 40 forty members who serve 4 four-year terms. The Head of the House of Assembly is called the Speaker, assisted by a Deputy Speaker, both of whom are elected by the members of the House from amongst themselves. The House is made up of representatives from all the local governments within the state and subject to the provisions of the Constitution, exercises identical functions at the state level with those of the National Assembly at the federal level. Judiciary The Chief Law Officer of the State is the Attorney General and Commissioner for Justice of the State. In accordance with the Constitution, judicial authority is vested mainly in the following courts: the State High Court, Sharia Court of Appeal of the State and Customary Court of Appeal of the State and such other courts as may be authorised by law to exercise jurisdiction at first instance or on appeal on matters with respect to which a House of Assembly may make laws. Presently, the state judiciary is made up of the State High Courts, the Magistrate Courts and the Customary Courts. Local Government

There are presently 20 (twenty) local government councils and 37 local council development areas in Lagos State. Each local government area is administered under a local government council headed by a Chairman, who is the chief executive of the local government council and other elected members. The functions of local governments include the consideration and making of recommendations to the State on economic development, administrative and urban planning matters. Specific matters include collection of rates, radio and television licenses, establishment and maintenance of cemeteries and homes for the destitute or infirm, naming of roads and streets, numbering of houses and such other functions as may be conferred on a local government council from time to time by the State House of Assembly. Judicial Administration The Lagos State Judiciary is the oldest Judiciary in Nigeria, having been in existence since the period of the Cession of Lagos to the British Government when it was established and known as the Colony Province Judiciary. The Magistrates‟ Court was the first Court to be established. Thereafter, the High Court which was called the Supreme Court although its jurisdiction was limited to Lagos. On attainment of self-government, the Federal Territory of Lagos inherited the two systems of Courts - the Magistrates' Courts and the Supreme Court. Following the creation of the Federal Supreme Court, the Lagos Supreme Court became the High Court of the Federal Territory, Lagos. Upon the creation of Lagos State, the High Court and the Magistrate Court of the Federal Territory were merged with the High Court and Magistrate Court of the former Western Region then at Ikeja. This became the Lagos State Judiciary. There are four (4) Judicial Divisions in Lagos State - namely Ikeja, Lagos, Epe and Ikorodu Judicial Divisions - and seven (7) Magisterial Districts. The Magisterial Districts are Ikeja, Lagos Island, Yaba, Apapa, Ikorodu, Badagry and Epe. The Ikeja Judicial Division serves as the headquarters of the Lagos State Judiciary. 9.2. ECONOMIC REVIEW

The State‟s economy grew by a Compound Annual Growth Rate of 29.4% between 2003 and 2007. Growth was mainly due to increased domestic activity. Lagos State is the largest urban agglomeration in Africa with current population estimates at over 17 million. This is coupled with the high concentration of industrial and commercial activities in the State as demonstrated by the following indices:

9. LAGOS STATE

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About 2,600 settlements; Africa‟s fastest growing market (ranked 6th largest global city in 1999 – UNCHS1) Annual population growth estimated at 600,000 people; Over 65% of Nigeria‟s total industries; Over 10,000 of Nigeria‟s commercial concerns; Over 250 financial institutions;

- Headquarters of most Nigerian Banks; - Headquarters of the Nigerian Stock Exchange; - Headquarters of most Insurance Companies.

Location of local and foreign conglomerates and headquarters of trans-national corporations, media hub, gangway of national telecommunications and energy systems

Mineral resources including; clay, silica sand, and bitumen; and Abundant Fishery resources. Challenges Concentration of the country‟s industrial and commercial activities in Lagos has led to massive migration into the State, which has led to a serious urban crisis characterised by dilapidating infrastructure, widespread unemployment, poverty, security threats, emergence of slums and conurbations and environmental degradation. Investment Needs The challenges of the state as indicated above can be improved upon via substantial investments in socio-economic infrastructure, development and a repositioning of the State through the active collaboration of all stakeholders to achieve accelerated economic growth and sustainable urban development. These are being pursued through the implementation of the 10 – Point Agenda as embedded in the State‟s Annual Budget. 9.3. GOVERNANCE AND BEST PRACTICES

The successful implementation of any economic program is a function of the provision of an enabling environment by the State. This is provided through efforts to institutionalise good governance and best practice by the Lagos State Government. This is evidenced by the introduction of appropriate policy environments, such as the following: State Overriding Policy Thrust

- Poverty alleviation - Sustainable economic growth

Aspects of Policy Thrust - Re-definition of the role of government - Promotion of a private sector-led economy - Sustenance of good governance through inclusive governance, accountability and transparency, rule of

law, public sector reform and increased Public Private Partnerships (“PPP”) - Increasing access of the people to quality basic social services - Defence of true fiscal federalism

9.4. Lagos State’s Ten Point Agenda

The Government of Mr Babatunde Raji Fashola SAN continues to pursue the 10-Point Agenda established in 1999 under the administration of Asiwaju Bola Ahmed Tinubu. The 10-Point Agenda serves as the administration‟s reference point for the rebuilding of Lagos State into a model city, through the efficient and adequate provision of social services and infrastructure

1 United Nations Center for Human Settlements

9. LAGOS STATE

33

Lagos State Ten Point Agenda

1. Roads 2. Transportation

*Aggressive road rehabilitation in all Local Government Areas.

*Integrated Mass Transit Programme with Road, Rail and Water Transport Services (LAMATA & LAGBUS),

*Construction of new roads, bridges (4th Mainland Bridge) *Traffic Management

*Construction of coastal roads

3. Power & Water Supply 4. Environment & Physical Planning

*Island Power Project (IPP) *Beautification (making Lagos a model city State)

*Alausa Power, Akute Power, Odomola and Adiyan expansion.

* Introduction of community-based and integrated solid and liquid waste management

5. Health 6. Education

*Emergency medical services *Teachers welfare enhancement

*Expansion of primary, secondary and tertiary healthcare services

*Infrastructure renewal- massive rehabilitation and maintenance of existing schools and libraries

*Enhancement of medical personnel welfare *Scholarship

7. Employment 8. Food Security

*Graduate Empowerment Programmes *Empowerment of farmers

*Job creation *Support for strategic food preservation and farm settlements

*Skills acquisition *Facilitation of sustainable food production and processing

9. Shelter 10. Employment

*Provision of affordable mass housing scheme *Diversified revenue sources

*New satellite town developments etc *Widen tax net

*Development of database to enhance effective revenue collection mechanism

The Lagos State Government continues to make impressive strides in the implementation of its Ten point Agenda. Some of the major projects completed under the programme are:

1. Roads Commissioning of eight major roads to the Abule-Egba/Ekoro/Agbelekale and Ifako-Ijaiye communities. Commissioning of the 1.5 kilometre upgraded Dr Nurudeen Olowopopo Avenue in Alausa Commissioning of three major roads including Joseph Dosu, Old Cemetery and Market Roads in

Badagry Town Completed a network of three roads in Ojo Local Government Area; Shibiri Etegbin Road, Imude Road

and Ajangbadi-Ilogbo Road

2. Health

Handing over a 100 -bed Maternal and Childcare Centre in the Ikorodu Local Government Area of Lagos State.

Commissioning a 100 –bed capacity Maternal and Childcare Centre in Isolo. Commissioning a 20 -bed Accident and Emergency Centre at the Lagos end of the Lagos - Ibadan

Express way

9. LAGOS STATE

34

3. Environment and Physical Planning Signed a Memorandum of understanding with the Clinton Foundation and the Konasedem Consortium

to develop the first model integrated Solid Waste Management System in the Country. Commissioned and handed over the refurbished City Hall in Central Lagos. Handed over a Shopping Complex and a Drivers' Institute all in the Ikorodu Local Government Area of

Lagos State. Empowered by the provision of the State's Fire Service, two aerial ladder platform fire trucks, one foam

fire truck, five rapid response utility fire fighting vehicles and eight 10,000 litres water tankers Commissioned the 1st phase of the New Oluwole Urban Market in Central Lagos Commissioned a Community Hall in Ajara Agelaso. Commissioned the largest purpose built Court House in Nigeria- the Igbosere Magistrate Court. Commissioned a One-Stop-Shop administrative block building of the Lekki Free Trade Zone

4. Power/ Water Supply Commissioned two million gallon capacity Water Works to the Abule-Egba/Ekoro/Agbelekale and

Ifako-Ijaiye communities Commissioned a Micro - Water Scheme in Apapa Commissioned a two Million Gallon per day Mini-Waterworks in Ajangbadi Town

5. Transportation

Commissioned a Driver's Institute in Badagry Town

6. Education Supply of the first batch of a total of 166,629 desks and chairs to public primary and secondary schools in

the State Commissioned the Eko Secondary Education Project. Inaugurated the pioneer Technical and Vocational Educational Board in the State. Handed over a total of 103 classrooms comprising of both rehabilitated and new classroom blocks at the

Ikeja Cantonment and Agidingbi Grammar School.

7. Revenue Enhancements Launching the State‟s N275 billion Bond Issuance Programme and the successful issuance of:

- N50 Billion Series 1 Fixed Rate Bond. - N57.5 Billion Series 2 Fixed Rate Bond

8. Employment Recruitment of 507 graduate teachers under the Special Education Intervention Programme.

9. Food Security

2,826 people trained in fish farming 2,715 people trained to grow crops 1,411 people trained to cultivate livestock Increased Local Food Crop Production from 1.452m metric tons (2007) to 2.103m metric tons (2010) Increased Livestock from 1.765m metric tons (2007) - 2.005m metric tons (2010) Increased aggregate Fisheries Production from 0.249m metric tons (2007) to 0.255m metric tons (2010) 1,500 Youths Benefited from Agricultural Youth Empowerment Scheme (YES) Project from 300 Youths

(2007) up to 1,500 (2010) 45% Increase in Local Food Crop Production; 14% Increase in Livestock Production; 1% Increase in Fish

Production 2,065 Employment Generation (Youths/Rice Farmers) Procurement of Tractors and Implements to reduce farmers drudgery and rejuvenated the tractor hiring

scheme

9. LAGOS STATE

35

Furthermore, as part of the measures to address the problem of food security in the State, during activities for the World Food Day, the Lagos State revealed its plans to employ 1.3 million residents of the State to boost cassava production as part of the sustained measures to boost food production in the State. The United States of America is also set to partner with the Lagos State Government on massive food production. The USA Ambassador to Nigeria, Mr. Russ Nicely confirmed that the country would be interested in offering Nigeria the development capacity, giving expertise to revolutionize the agricultural sector to produce and meet the food requirement of the State.

10. Shelter Criminal hide-outs eliminated

2,300 housing units provided

9 housing estates completed

4,808 industrial schemes developed

400 flats earmarked for staff mortgage scheme take-off Freedom park complex(old broad street prisons) Ikoyi/VI and Ikeja Model City commissioned; Lekki master plan also commissioned

9.5. MEDIUM TERM STRATEGY OF THE STATE

Lagos State, being the hub of the nation‟s industrial and commercial activities, continues to witness a massive influx of people from other parts of the country on an annual basis. This has led to a surge in its population with the attendant strain on its social and physical infrastructure, the rapid emergence of slums, conurbations and consequently, severe environmental degradation. The effect of this growth is also felt in neighbouring States of Ogun and Oyo.

In order to combat these challenges and boost economic development, the Lagos State Government has developed a Medium-Term Strategy (“MTS”) that seeks to increase investment in socio-economic infrastructure that will achieve significant growth and sustainable urban renewal and development of the State through collaboration with stakeholders.

The implementation of the 10-point agenda, which encapsulates the MTS, is intended to address the issues of accelerated economic growth and sustainable urban development. The 10 point agenda focuses on the following areas;

1. Roads 6. Food Security

2. Transportation 7. Employment

3. Health 8. Revenue Enhancement

4. Education 9. Power/Water Supply

5. Environment /Physical Planning 10. Shelter

9.6. FINANCES OF LAGOS STATE

The dynamic nature of Lagos State‟s finances is demonstrated by the growth in the state‟s Internally Generated Revenue (“IGR”) and the increase in budgetary provisions/executions, particularly the capital sector programmes over the years.

9. LAGOS STATE

36

Figure 1: Increase in Internally Generated Revenue 2003 – 2011

Source: Lagos State

Between 2003 and 2011 there was an increase of over 86% in the IGR of the Lagos State Government. The State‟s annual budget has grown significantly over the same period. Current efforts of the State Government, particularly in the execution of the 10-point Agenda embedded in the Capital Expenditure Programme indicate a geometrical progression in the overall growth of the Lagos State Economy. The State‟s income profile in 2011 indicates that Taxes were the main source of IGR at 84%, with fines and fees contributing 6.43%. Infrastructure renewal and respective public-private sector partnerships are creating and providing a more conducive living environment for Lagosians, prompting greater tax responsibility amongst residents in the state. Figure 2: Internally Generated Revenue 2011

2003 2004 2005 2006 2007 2008 2009 2010 2011

27,537 33,998

40,640

61,684

83,019

129,563

178,465 173,447

199,948

Internally GeneratedRevenue 2003-2011

N'Million

84.09%

6.43%

4.70%

2.06%1.00%

0.74% 0.44%0.41%

0.13%

Taxes

Fines and Fees

Licenses

Earnings and Sales

Rent of Govt Property

Interest Repayment Dividend

Grants & Contribution

Miscellaneous

Dedicated Revenue

Source: Lagos State

9. LAGOS STATE

37

9.7. CONCLUSION It is expected that as the Lagos State Government continues to aggressively pursue the execution of the Ten-point agenda through both government initiatives and public-private partnerships, there will be a marked increase in productivity, growth and overall development of the State‟s economy. This should consequently prepare the State for its emergence as a Mega City of international repute.

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10. THE LAGOS STATE EXECUTIVE COUNCIL

The State has an Executive Council, which comprises the Governor, the Deputy Governor, the Secretary to the State Government, the Commissioners, the Special Advisers, the Head of Service, Chief of Staff and the Deputy Chief of Staff. Occasionally, the Special Assistants are in attendance at the meetings of the Council

The profiles of some key representatives of the State Executive Council are provided below: His Excellency, Mr. Babatunde Raji Fashola (SAN) is the Executive Governor of Lagos State. He holds a Bachelors degree in Law from the University of Benin (1987) and was admitted to the Nigerian Bar in 1988. He started his career with the law firm of Late Dr. G.I.S Omonuwa and afterwards worked for the law Firm of Sofunde, Osakwe, Ogundipe and Belgore as a litigator with specialization in areas such as intellectual property (registration of trade marks), commercial law (general contracts, mergers and acquisitions), land disputes, criminal law and chieftaincy matters. In 1993, he joined the law firm of K.O. Tinubu & Company, as an Investing Partner and became Managing Partner and Lead Counsel from 1994 to August 2002 when he was appointed as Chief of Staff to the former Governor of Lagos, Asiwaju Bola Ahmed Tinubu. Prior to his appointment as Chief of Staff, he had also served Lagos State as the Secretary of the Lands Sub-Committee of the Transitional Work Groups and on the State Government‟s Panel of Enquiry into allocation of houses on the Mobolaji Johnson Housing Scheme at Lekki. He is a member of the Nigerian Bar Association, the International Bar Association, an Associate of the Chartered Institute of Taxation of Nigeria and a Notary Public of the Supreme Court of Nigeria and has been variously honoured with chieftaincy titles, awards and certificates of merit including the Distinguished Alumnus Award recently conferred on him by the University of Benin Alumni Association. He is a Patron of the Law Students Association of the University of Benin. On 29 May 2007, he was sworn in as the 13th Governor of Lagos State. He was re-elected to this position in May 2011 for a second term.

Mrs. Joke Orelope-Adefulire is the Deputy Governor of Lagos State. She holds a Diploma in Social Work from the Lagos State University (LASU) (2006) and also a Diploma in Computer Application from Abacus Computer Institute (2002). The erstwhile Honourable Commissioner for Women Affairs and Poverty Alleviation began her career as a Secretary with Francis Nigeria Limited, Ikeja, Lagos, between 1980 and 1985. She then worked with Paterson and Zochonis Industries, Nigeria Limited, Ilupeju, Lagos, (now PZ Cussons Nigeria Plc) between 1985 and 1991. She was elected to the Lagos State House of Assembly in 1991 during the Third Republic. Before the termination of the democratic process by the military in 1993, she served as Chairman of the State Legislatures‟ House Services Committee. Mrs Adefulire founded Adejoke Nigeria Enterprises and Cladef Interests Nigeria Limited, Ikeja, Lagos, which she ran as Chief Executive until 2002 when she was appointed Electoral Commissioner by the Lagos State Independent Electoral Commission. She was sworn in as Deputy Governor of Lagos State in May 2011.

Mrs Idiat Oluranti Adebule is Secretary to the State Government. An accomplished lecturer at the Lagos State University (LASU), she possesses a B.A ED (Islamic Studies) (1992) and M. ED (curriculum Studies), both from the Lagos State University (1997). She is undertaking an M.Phil/PhD in Curriculum Studies with Specialisation in Religious Education at the Lagos State University. She was a member of the defunct Teaching Service Commission (TESCOM) and Lagos State Scholarship Board and she is presently a Lecturer of Curriculum Studies/Language at the Lagos State University (LASU), Ojo.


39

Mr. Tokunbo Abiru is the Honourable Commissioner for Finance. A Chartered

Accountant and Economist, he has held numerous positions in the banking industry, notably Deputy General Manager, First Bank Plc. He holds a B.Sc in Economics from the Lagos State University (1988) and was appointed a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN) in April 2010. He is also an Honorary Senior Member of the Chartered Institute of Bankers of Nigeria. Mr. Ben Akabueze is the Honourable Commissioner for Economic Planning and Budget for Lagos State. He holds a First Class Bachelors degree in Accounting from the University of Lagos (1982). He is a fellow of the Institute of Chartered Accountants of Nigeria and a member of the Nigeria Economic Summit Group. He has over 23 years experience in Accounting, Consulting and Banking, rising to the apex of the profession as Managing Director/Chief Executive of NAL Bank Plc, now Sterling Bank (2000-2005) and Executive Director, Sterling Bank Plc from January to August 2006. He has been the Commissioner for Economic Planning and Budget of Lagos State since January 2007.

Mr Adeola Ipaye is the Attorney General and Commissioner for Justice. He studied at the University of Lagos where he obtained B.A. (Hons.) (1984); LL.B Hons. (1988) and LLM (1991). Mr. Ipaye was a Special Assistant (and later Senior Special Assistant) on Legal Matters to the former Governor of Lagos State, Asiwaju Bola Ahmed Tinubu between June 2001 and May 2007. He was also previously a member of Governor Fashola‟s finance team having served as Special Adviser on Taxation and Revenue where he was a key revenue generation driver. Mr Ipaye was also Special Adviser, Legal Matters and a Law lecturer at the University of Lagos prior to joining the Lagos State Government. He is a Barrister and Solicitor of the Supreme Court of Nigeria.

Mr Adebiyi Mabadeje is Commissioner for Science and Technology. A Mechanical Engineer, he holds a B.Sc (Mechanical Engineering) (1989) and an MBA (1997), both from the University of Lagos. He has during his over 15 year working career, held positions in different IT/Telecom industries in Nigeria and West Africa including being the Chief Consultant, Kratos Infratel Towers, Lagos; Group Head, Corporate Sales at Visafone Communications Limited and Group Head, Glo Business Solutions at Globacom Limited. He was appointed a Commissioner on July 4, 2011.

Mr Enitan Oshodi is the Honourable Commissioner for Youth, Sports and Social Development. He is also Vice Chairman, Succession Trust and Estate Planning Committee of the Nigerian Bar Association‟s Section on Legal Practice. Prior to his appointment, he was Managing Partner of the Law Firm of Oshodi, Oshodi & Co. He holds a B.Sc in Civil Engineering from the University of Lagos (1989) and an LLB (Hons) from the University of Buckingham, England (1991). Mr Oshodi was admitted to the Nigerian Bar in 1992.


40

Mr Wale Ahmed is the Commissioner for Special Duties. A multi disciplinary professional, he holds a Bachelor of Medicine, Bachelor of Surgery (MB,BS) from the Usman Danfodio University, Sokoto State (1991), a Masters in International Law and Diplomacy (2000) and Masters in Humanitarian Studies (2002) from the University of Lagos. He is a member of the Nigeria Medical Association (NMA). Prior to his appointment to the cabinet, he was Medical Director, Noble Medical Centre, Agege.

Honourable C.O. Ojelabi is the Commissioner for Rural Development. A former Chairman of Oto Awori Local Council Development Area and member of the House of the Representatives, he is a Fellow, Certified Board of Administrators of Nigeria (2010). He holds a B.A (Hons.) History and International Studies (2003) from the Lagos State University, Ojo.

Dr. Olajide Idris is the Honourable Commissioner for Health. He holds a Bachelor Degree in Medicine and Surgery (MB.BS) degree from the College of Medicine, University of Lagos (1980). His other qualifications include a Master‟s Degree in Public health (MPH) from Yale University, USA (1985) and a Post Doctoral Research Fellowship, Columbia University, Div. of Cardiology, New York (1999). Dr. Jide Idris has worked as a physician and healthcare consultant in Nigeria and the United State of America at various stages of his career. Dr. Idris was appointed Permanent Secretary in the Lagos State Ministry of Health in June 1999, a position he occupied till May 2007 when he was appointed as the Honourable Commissioner for Health, Lagos State. He has functioned in this capacity to date.

Mr. Lateef Aderemi Ibirogba is the Honourable Commissioner for Information and Strategy, the Government spokesman and Chief Image maker. He has worked in the print media, advertising and public relations industry and was a reporter at Punch newspaper; Senior Reporter at the defunct Daily Times Nigeria; Head, Clients Services, Promoserve Advertising; General Manager/Chief Executive Officer, Saal Advertising and Sage Communication Limited. He possesses an OND Mass Communication (1983) and an HND Mass Communication (1986), both from the Ogun State Polytechnic, Abeokuta and a Masters Degree in Communication and Language Arts from the University of Ibadan (1992).

Mr. Olutoyin Ayinde is the Honourable Commissioner for Physical Planning and Urban Development. Mr. Ayinde is holder of a Professional Masters Degree in Transport Planning from Lagos State University (2000) after a Post-Graduate Professional Diploma (1990), Higher Diploma (1981) and Ordinary Diploma (1978), all in Town and Regional Planning from Yaba College of Technology. He has worked as a Partner, Darwichwork Group. He was Managing Partner, Toyin Ayinde & Associates prior to his appointment to the cabinet.


41

Mr Kayode Isiak Opeifa is the Honourable Commissioner for Transportation. He was previously the Special Adviser on Transportation (2007-2011) and was notably responsible for the improvement in the operations of the Lagos State Traffic Management Authority (LASTMA) as well as the Bus Rapid Transit (BRT), light rail system and development of marine transportation. He holds a B.Sc Biochemistry from the University of Ilorin (1986), an M.Sc Biochemistry (Toxicology) from the College of Medicine, University of Lagos (1988), a PhD in Intermediary Metabolism and Toxicology (1997) and an MBA, Marketing Management from the Lagos State University (1997).

Prince Adesegun Abiodun Oniru is the Honourable Commissioner for Waterfront Infrastructure Development. He holds a Bachelors Degree in Civil Engineering from the University of Westminster (1991) and has over 19 years experience in project management, design and construction, investigation, renovation and maintenance. In 2003, he was appointed Managing Director of the Lagos State Waterfront and Tourism Development Corporation and in 2005, the Special Adviser on Works and Infrastructure. Prince Oniru was appointed Honourable Commissioner for Housing in the administration of former Governor of Lagos State, Asiwaju Bola Ahmed Tinubu. He was appointed Commissioner for Waterfront Infrastructure Development in June 2007.

Mr Lateef Tunji Bello is the Honourable Commissioner for Environment, and had previously held this portfolio from 2003-2007 in the cabinet of Ashiwaju Bola Ahmed Tinubu. He holds a B.Sc (Hons) in Political Science from the University of Ibadan (1984) and a Masters in International Law and Diplomacy (1987). He further obtained an LLB (Hons.) (2000) from the University of Lagos and was later called to the Nigerian Bar in 2002. Prior to his appointment, he held the position of Managing Director of the Lagos State Signage and Advertising Agency (LASAA).

Mrs Florence Oguntuase is the Honourable Commissioner for Establishment, Training and Pensions. An erstwhile Permanent Secretary and Special Assistant in the Ministry of Economic Planning and Budget, she holds a B.Sc in Economics from the University of Lagos (1976), and an MBA from the University of Louisiana (1982). She also has an MSc in Developmental Finance from the University of Birmingham, UK (1990). She has been instrumental to budget preparation and implementation in the State in the past decade, as Special Adviser to the Governor on Economic Planning & Budget Matters from 2007 to May 2011. Mrs. Oguntuase was appointed as the Honourable Commissioner of Establishments, Training and Pensions in July 2011.

Bosun Jeje is the Honourable Commissioner for Housing. He holds a B.Sc in Sociology from the University of Lagos (1988) and an MSc in Environmental Management. He also has an LLB (Hons.) from the Lagos State University and a Bachelor of Law, Nigerian Law School. Honourable Jeje established YKB Homes and was the Chief Executive Officer prior to his appointment as Commissioner in July 2011.


42

Ademorin Kuye is the Honourable Commissioner for Local Government and Chieftaincy Affairs. The former Chairman of Somolu Local Government is a Barrister at Law and a member of the Institute of Public Administration, having obtained an LL.B from the University of Ife (1988). He was called to the Nigerian Bar in 1989. Prior to his appointment in 2011, he was the Principal Counsel and Managing Director of Adekonla, Kuye & Co. and Fortees Dev Coy Limited, respectively. Oladisun Holloway is the Honourable Commissioner for Tourism. A seasoned banker, Mr. Holloway graduated Summa Cum Laude from the Morehouse College, Atlanta (1979) with a BA in Economics. His Scholastic honors included Phi Beta Kappa. He also obtained an MBA in Finance and International Business from the Columbia University Graduate School of Business (1980). Mr. Holloway has acquired experience from the nation‟s top financial institutions including Chase Merchant Bank, International Merchant Bank and as Managing Director/CEO, Ecobank Nigeria Plc and also at Ecobank Development Corporation.

Mrs. Olusola Oworu is the Honourable Commissioner for Commerce and Industry. She is an accomplished and experienced accountant, having graduated with a Bachelor of Arts (Hons.) in Accounting from North London Polytechnic (1981). She also qualified as a Chartered Accountant in January 1985. She left Citibank as Vice President in July 2007 to take up appointment as the Special Adviser to His Excellency, Mr. Babatunde Raji Fashola (SAN) on Commerce and Industry in 2007. She was re-appointed and elevated to the position of the Honourable Commissioner for Commerce and Industry in July 2011.

Mr. Taofiq Tijani is the Honourable Commissioner for Energy and Mineral Resources. He was initially appointed as Special Adviser, Office of Mineral Resources but the Office was upgraded to full Ministerial Status and Mr. Tijani became the Commissioner. He has a B.Sc in Petroleum Engineering from the University of South Carolina (1978). He obtained his Post Graduate Diploma in Petroleum Reservoir Management at the Texaco Engineering Technical School in 1986. Mr. Tijani was Manager, Upstream Gas Supply at the Nigerian National Petroleum Commission and Senior Technical Assistant to the Honorable Minister of Petroleum Resources. He is a member of the Nigeria Society of Engineers (NSE) and the Society of Petroleum Engineers.

Mrs. Olayinka Oladunjoye is the Commissioner for Education. Mrs. Oladunjoye holds an LLB (1981), a BA (History) (1986), and MA (History) (1997), from the University of Lagos. She was admitted to the Nigeria Bar in 1999. She is a Chartered Insurer and member, Chartered Insurance Institute of London and Chief Executive Officer, Biscons Insurance Brokers Limited and Senior Partner, Gray Chapel Legal. She has won several awards, notably the Award of Excellence, Lagos State Government (1995).


43

Prince Gbolahan Lawal is the Commissioner for Agriculture and Cooperatives. He holds a B.Sc in Botany from the University of Port Harcourt (1992) and an MSc Violence, Conflict and Development from the School of Oriental and African Studies in London (2008). He was the coordinator of the Lagos State Agriculture-based Youth Empowerment Scheme (Agric-Yes), a scheme designed to create employment for teeming youth population, and enhance food security prior to being appointed to the cabinet.

Dr. Kadri Obafemi Hamzat is the Commissioner for Works and Infrastructure. He holds a B.Sc (Honours) in Agricultural Engineering (1986) and an M.Sc in Crop Processing Engineering (1988), from the University of Ibadan. He later proceeded to obtain a Ph.D in System Process Engineering from Cranfield University, England (1992) . Dr. Hamzat has had over two decades of work experience in diverse areas of engineering practice and was the Group Head of IT Strategy, Oando Plc, before his appointment to the State. He was appointed the Honourable Commissioner, Ministry of Science & Technology, Lagos State in 2005, a position he held till June 2011. Thereafter, he was reappointed Honourable Commissioner for Works and Infrastructure by Governor Babatunde Raji Fashola on the 4th of July, 2011.

Mr. Mohammed Oyinlomo Danmole is the Honourable Commissioner for Home Affairs and Culture. He holds a Bachelor‟s of Law degree from the University of Lagos (1992). He was later admitted to the Nigerian Bar in 1993. Oyin Danmole served on the cabinet of Asiwaju Bola Ahmed Tinubu as the Special Adviser on Political and Legislative Matters and was reappointed by His Excellency, Governor Babatunde Raji Fashola, who appointed him as the pioneer Special Adviser on Central Business District from 2007 to 2011. In July 2011, he was appointed as the Commissioner for Home Affairs and Culture.

44

11. USE OF PROCEEDS

The net proceeds from each issue of Bonds will be utilised by the Lagos State Government for any of the following purposes:

a) to finance annual investment commitments specified in the capital budget, or

b) to refinance commercial banking obligations obtained in respect of public investment projects specified in the capital budget.

Lagos State anticipates budget deficits and intends to fund a portion of the deficit through the issuance of debt securities in the Nigerian capital market. These securities, provisionally valued at N167.5 billion, will be sold via a series of Bond issuances.

The funds raised will be used to finance a number of key projects in sectors such as Infrastructure, Housing, Agriculture, Rail and Finance. A summary of these projects is outlined below:

1. MINISTRY OF WORKS AND INFRASTRUCTURE

S/N MDA DETAILS CONTRACT SUM =N= PAYMENT TO DATE =N= AMOUNT OUTSTANDING =N=

1 Office of Infrastructure

Construction of Lagos Badagry Dual carriage-way (Lot1,)

44,093,624,235.00 30,570,387,293.68 13,523,236,941.32


Construction of Admirality -Alexander (Lekki-Ikoyi) Link Bridge (Phase 1, 11 & 111)

32,995,134,521.00 26,355,971,405.26 6,639,163,115.74


Reconstruction of Lagos-Badagry Dual Carriageway (Lot 2A) Segment 1

141,194,264,433.46 11,241,667,276.05 129,952,597,157.41


Construction Of Ijegun-Isheri Oshun-Isolo (Jakande Estate) (5.00km)

6,205,930,700.35 4,117,538,248.60 2,088,392,451.75


Rehabilitation/Upgrading of Maidan Agiliti Rds, including construction of bridge in Kosofe LGA

2,750,000,000.00 1,689,075,260.96 1,060,924,739.04


Rehabilitation of Road Network in Ikeja GRA (Phase 1)

3,195,000,000.00 NIL 3,195,000,000.00


Reconstruction Of Igbe Road To Ijede Junction (9.00km)

7,231,490,630.44 NIL 7,231,490,630.44


Upgrading Of Access Road To Igbogbo (Oba Adeboruwa/ Oba Omolaja Ogunlewe Road) (8.510km)

2,456,823,560.05 NIL 2,456,823,560.05


Maidan Agiliti/Network Of Roads(Phase 2)

1,200,000,000.00 NIL 1,200,000,000.00

11. USE OF PROCEEDS

45


Construction of Ariyo-Iramuwo-Tedi Road Works, (phase11)

1,300,000,000.00 NIL 1,300,000,000.00


Construction of Ajao-Ejigbo Link Bridge B And Roadworks (Nino Nwosu/ Nze/Kudirat/Labake Adepoju/ Illamose Road Network) Ejigbo

3,759,620,909.34 1,806,000,000.00 1,953,620,909.34


Construction of Aradagun –Iworo – Ajido (Phase l), Bridge Only (Section l) in Badagry L.G.A

3,500,000,000.00 NIL 3,500,000,000.00


Rehabilitation and Upgrading of Bakare / Salami Shuaibu / Adaranijo and Onisemo Streets in Somolu LGA-Phase I

1,450,000,000.00 NIL 1,450,000,000.00


Rehabilitation / Upgrading of Meiran Road (Phase I) in Alimosho LGA

1,150,000,000.00 NIL 1,150,000,000.00


Rehabilitation / Upgrading of Yaya Abatan / College Road in Ifako Ijaiye LGA (Phase I)

1,200,000,000.00 NIL 1,200,000,000.00


Construction of Onijemo/Abiola Road and Links Bridge in Ifako Ijaiye LGA – Phase I (Bridge Works)

1,000,000,000.00 NIL 1,000,000,000.00


Reconstruction of Ozumba Mbadiwe to Bonny Camp

2,645,000,000.00 1,150,000,000.00 1,495,000,000.00


Dualisation & Improvement of Isheri Olofin-Iba LASU Road- Phase II

4,500,000,000 NIL 4,500,000,000


Urban Renewal & Redevelopment of Okobaba

2,856,779,275.00 NIL 2,856,779,275.00


Construction of Multi Agency Building in Alausa

2,666,000,000.00 NIL 2,666,000,000.00


Construction of Bridges in Ojo LGA, Ajara-Erkiti, Iragan Ikoga Roads Phase I & Retention payment Okoto-Itire overhead Link Bridge and road

11,489,841,233.00 NIL 11,489,841,233.00


Rehabilitation of Bamigbose/Lewis, Alakoro Marina/Kosoko Roads

2,390,000,000.00 NIL 2,390,000,000.00


Compensation payment on Lagos Badagry Expressway to 3rd Batch of Claimants on Lot 1 (Eric Moore - Mile 2)

940,347,860.00 NIL 940,347,860.00

11. USE OF PROCEEDS

46


Construction of Jetty and Terminal Building at Osborne Foreshore Ikoyi

2,081,386,259.00 NIL 2,081,386,259.00


Reconstruction of the failed section on Eleko Rd, Ibeju-Lekki

1,600,000,000.00 NIL 1,600,000,000.00


Rehabilitation of Akinwade Street & Strabag Roads Orile Coker - Cert No 3

3,116,246,310.07 NIL 3,116,246,310.07


Rehabilitation/upgrading of Glover Road in Okoyi

1,500,000,000.00 NIL 1,500,000,000.00


Rehabilitation of Ibese road, Ikorodu Lga

6,603,000,000.00 4,381,869,950.23 1,618,130,049.77


Dualisation & Improvement of Ishri Olofin-Oba LASU Road - Final Retention Payment

6,268,443,844.39 5,768,985,853.45 499,457,990.94


Construction of Afromedia-Adaloko Rd Ojo LGA

1,150,000,000.00 NIL 1,150,000,000.00


Construction of Addo/Addo-Kekere/Langbasa/Ikolola Roads Eti Osa

1,700,000,000.00 850,000,000.00 850,000,000.00


Construction of Imman Thanni Road Netwrok, Ijeshatedo

895,000,000.00 NIL 895,000,000.00


Infrastructure improvement Yaba (Jibowu) to Iddo, Lagos Mainland Phase I & II

9,473,418,158.21 8,358,939,059.61 1,114,479,098.61


Rehabilitation of Teslim Balogun Synthetic Running Tracks for 18th National Sports Festival

485,000,000.00 NIL 485,000,000.00


Construction of Servic Roads adjoining the Expansion of Lekki-Epe Expressway in Eti Osa

2,297,441,640.42 1,670,319,523.84 627,122,116.58


Rehabilitation/Upgarding of Roads Netwok in Mushin LGA Phase I

3,800,000,000.00 2,834,218,499.47 965,781,500.53


Rehabilitation/Upgrading of Surulere Industrial Road Ogba – Ikeja

635,000,000.00 NIL 635,000,000.00

TOTAL (INFRASTRUCTURE) 323,774,793,569.73 100,794,972,371.15 222,376,821,198.59

2. MINISTRY OF HOUSING

S/N MDA DETAILS CONTRACT SUM =N= PAYMENT TO DATE =N= AMOUNT OUTSTANDING =N=

1 Housing Ikeja (Lagos HOMS) 6 Blocks,72 units 980,120,383.22 NIL 980,120,383.22

11. USE OF PROCEEDS

47

2 Housing Gbagada 11B (Lagos HOMS) 6 Blocks,72 units

1,675,454,456.04 NIL 1,675,454,456.04

3 Housing Igbogbo 11B (Lagos HOMS) 29 Blocks,348 units

4,301,658,789.81 NIL 4,301,658,789.81

4 Housing Ajara Phase 1 Badagry (Lagos HOMS) 41 Blocks.

3,699,910,942.93 NIL 3,699,910,942.93

5 Housing Ajara Phase 11 (Lagos HOMS) 33 Blocks,809 units

2,683,910,942.93 NIL 2,683,910,942.93

6 Housing Igando (Lagos HOMS), 41 Blocks, 492 units

6,400,000,000.00 NIL 6,400,000,000.00

7 Housing Omole (Lagos HOMS), 7 Blocks, 84 units

866,145,252.88 NIL 866,145,252.88

8 Housing Magodo (Lagos HOMS), 5 Blocks, 60 units

634,984,438.87 NIL 634,984,438.87

9 Housing Badagry (Lagos HOMS), 46 Blocks, 736 units

7,442,218,232.52 NIL 7,442,218,232.52

10 Housing Ijaniki (Lagos HOMS), 21 Blocks, 336 units

3,225,053,583.88 NIL 3,225,053,583.88

11 Housing Lekki 1 (Lagos HOMS), 8 Blocks, 96 units

1,254,749,540.52 NIL 1,254,749,540.52

12 Housing Lekki 2 (Lagos HOMS), 7 Blocks, 84 units

1,070,208,055.10 NIL 1,070,208,055.10

13 Housing Lagos HOMS Special Projects, Sangotedo 45 Blocks, 540 units

5,654,113,608.41 NIL 5,654,113,608.41

14 Housing Lagos HOMS Special Projects, Mushin 5 Blocks, 60 units

789,730,639.74 NIL 789,730,639.74

15 Housing Lagos HOMS Special Projects, Ilupeju 10 Blocks, 120 units

1,463,395,068.95 NIL 1,463,395,068.95

16 Housing Shogunro Scheme 1 (Lagos Homs) 12 Blocks, 144 units.

2,039,789,282.73 NIL 2,039,789,282.73

17 Housing Shogunro Scheme 11 (Lagos Homs) 8 Blocks, 96 units

1,437,343,949.87 NIL 1,437,343,949.87

18 Housing Wemco Road Ogba (Lagos Homs) 8 Blocks, 96 units

1,300,163,734.62 NIL 1,300,163,734.62

19 Housing Shitta Surulere (Lagos Homs) 3 Blocks, 36 units

458,613,893.20 NIL 458,613,893.20

TOTAL (HOUSING) 47,377,564,796.22 NIL 47,377,564,796.22

11. USE OF PROCEEDS

48

3. MINISTRY OF AGRICULTURE

S/N MDA DETAILS CONTRACT SUM

=N= PAYMENT TO

DATE =N= AMOUNT OUTSTANDING

=N=

1 Ministry of Agriculture

Construction of Agricultural Training Centre at Abia Badagry using Songhai Model of Agricultural Development phase (1-4)

4,239,200,000.00 NIL 4,239,200,000.00

TOTAL (AGRICULTURE)

4,239,200,000.00

NIL

4,239,200,000.00

4. LAGOS METROPOLITAN AREA TRANSPORT AUTHORITY (“LAMATA”)

S/N

MDA

DETAILS

CONTRACT SUM

=N=

PAYMENT TO DATE

=N=

AMOUNT OUTSTANDING

=N=

1

LAMATA

Blue Line Rail Project Okokomaiko -Marina

166,608,356,283.00

40,856,534,496.00

125,751,821,787.00

TOTAL (LAMATA)

166,608,356,283.00

40,856,534,496.00

125,751,821,787.00

5. WATER CORPORATION


=N= PAYMENT TO


=N=

1

Water Corporation Adiyan Water Project

188 million Euro NIL 188 million Euro

N12,600,000,000

12,600,000,000.00

TOTAL (WATER

COPRORATION)

12,600,000,000.00 188 million Euro

12,600,000,000.00

188 million Euro

6. MINISTRY OF FINANCE


=N= PAYMENT TO DATE

=N= AMOUNT OUTSTANDING

=N=

1 Ministry of Finance Refinancing the existing Bank facilities

20,000,000,000.00

NIL

20,000,000,000.00

TOTAL (MINISTRY OF FINANCE)

20,000,000,000.00

20,000,000,000.00

11. USE OF PROCEEDS

49

7. MINISTRY OF HEALTH


=N= PAYMENT TO DATE

=N= AMOUNT OUTSTANDING

=N=

1 Health Construction of Maternal & Child Care Centre (MCC) Badagry - Building

690,000,000.00 NIL 690,000,000.00

2 Health Construction of Maternal & Child Care Centre (MCC) Badagry - Equipment

591,000,000.00 NIL 591,000,000.00

3 Health Construction of Maternal & Child Care Centre (MCC) Epe - Building

624,000,000.00 NIL 624,000,000.00

4 Health Construction of Maternal & Child Care Centre (MCC) Epe - Equipment

591,000,000.00 NIL 591,000,000.00

5 Health Completion of Ayinke House, General Hospital Ikeja - Building

500,000,000.00 NIL 500,000,000.00

6 Health Completion of Ayinke House, General Hospital Ikeja - Equipment

2,000,000,000.00 NIL 2,000,000,000.00

7 Health Construction of internal Road in LASUTH Annex - Gbagada

1,800,000,000.00 1,242,754,151.55 557,245,848.45

TOTAL (HEALTH) 6,796,000,000.00 NIL 5,553,245,848.45

8. MINISTRY OF EDUCATION


=N= PAYMENT TO


=N=

1 Ministry of Education Redevelopment of Eric Moore Schools- Phase I

806,087,196.49

NIL 806,087,196.49

TOTAL (EDUCATION)

806,087,196.49

NIL

806,087,196.49

TOTAL (NAIRA) 582,202,001,845.44 141,651,506,867.15 438,704,740,826.75

TOTAL (EURO) 188,000,000.00

188,000,000.00

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12. RISK FACTORS & MITIGANTS

An investment in Bonds, as with any other investment, involves a high degree of risk. Accordingly, prospective investors should carefully consider the following risk factors together with all of the other information included in this Shelf Prospectus, and any Pricing Supplement/SSP prior to purchasing the Bonds. The risks below are not the only risks facing the State. Additional risks and uncertainties not currently known to us or that we currently consider immaterial may also materially and adversely affect the State. Any of the following risks could result in a material adverse effect on the State‟s financial condition, results of operations and ability to service debt, including the Bonds. These risks may also have a material adverse effect on the revenue, costs and other estimates and assumptions made for purposes of the financial model shown in this Prospectus, causing actual operating results to be materially lower than those reflected in the financial model.

1. COUNTRY RISK

i. Political Risk Nigeria has experienced periods of political instability since its independence in 1960. After 16 years of military rule, a democratic government was reinstated in 1999. Since then, significant progress has been made to strengthen the policy environment, economy and tackle corruption, but Nigeria‟s track record under democracy is short and challenges remain. The transition of power from President Obasanjo, who had served since 1999, to late President Umar Musa Yar‟Adua marked the first time in Nigeria‟s history that power has been handed democratically from one elected government to another. The elections which ushered the present Goodluck Jonathan administration were conducted on April 11, 2011. The concern regarding the Federal Government‟s ability to conduct free and fair elections was demonstrated by the political crises which ensued in some states in Nigeria after the elections which resulted in loss of lives and property. The regional instability and unrest most notably in the Niger Delta (if recurrent), may have adverse effect on public safety and productivity. In addition, the recent developments relating to the partial removal of government subsidy on petroleum products could create uncertainty, thereby leading to a drop in foreign direct and local investment infrastructure. Nigeria‟s political and economic environment is also affected by low levels of development and per capita income, which could lead to high levels of crime and unemployment. Furthermore, the series of bomb blasts in the Northern parts of the country have the potential of destabilising the country if unmanaged. Mitigating Factor: Nigeria has experienced a decade of un-interrupted democratic rule for the first time since its independence in 1960. The transition to a new government, following the death of President Umar Musa Yar‟Adua further demonstrated that the Nigerian political atmosphere is maturing. The Nigerian political and judicial institutions continue to be strengthened in recognition that democratic governance positively impacts development, and there is a greater will to ensure the participation of the electorate in decision making through the conduct of free and fair elections. There is the expectation that this trend will continue although there can be no assurances that the political environment will remain stable. 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.


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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 Jonathan 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.

iii. Specific risk- Risk of civil unrest, sectarian violence and armed conflict. Nigeria is increasingly experiencing pockets of violence. There were series of bomb blasts in Jos, Abuja and Yenagoa in late 2010. In some parts of the North particularly in Borno and Bauchi states, there have been targeted killings of government officials and attacks on state infrastructure by members of a radical Muslim sect. In addition, there continues to be sporadic attacks on oil facilities and platforms by militant groups in the Niger Delta despite the existence of a ceasefire. Unless resolved by the Government, these conflicts have the potential to destabilise the country. Mitigating Factor: The Government continues to strengthen the capacity of law enforcement agencies to prevent attacks. In addition, the Government has indicated a strong commitment to arrest and prosecute the perpetrators of such acts.

2. RISKS RELATING TO THE BONDS

a. The Bonds may not be suitable for all investors

Each potential investor in the Bonds must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:

(i) have sufficient knowledge and experience to make a meaningful evaluation of the bonds, the merits

and risks of investing in the Bonds and the information contained or incorporated by reference in this Shelf Prospectus or applicable Pricing Supplement/SSP;

(ii) have knowledge ,and access to appropriate analytical tools to evaluate, in the context of its particular

financial situation an investment in the Bonds and the impact the Bonds will have on its overall investment portfolio;

(iii) have sufficient financial resources and liquidity to bear all the risks of an investment in the Bonds,

including Bonds with principal and interest payable in one or more currencies, or where the currency for principal or interest payments is different from the investor‟s home currency;

(iv) understand thoroughly the terms of the Bonds and be familiar with the behaviour of any relevant

indices and financial markets; and

(v) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

Some Bonds are complex financial instruments and sophisticated institutional investors generally purchase complex instruments as a way to reduce risk or enhance yield with an understood, measured, appropriate addition of risk to their overall portfolios. A potential investor should not invest in Bonds which are complex financial instruments, unless there is the expertise (either alone or with a financial adviser) to evaluate how the Bonds will perform under changing conditions, the resulting effects on the value of the Bonds and the impact that this investment will have on the potential investor‟s overall investment portfolio.


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Structural Risks a) The market price of the Bonds may be volatile

The market price of the Bonds could be subject to significant fluctuations in response to actual or anticipated variations in the Issuer‟s operating results, adverse business developments, changes in the regulatory environment in which the Company operates, changes in financial estimates by securities analysts and the actual or expected sale of a large number of Bonds. Each investor needs to assess the market for the right time to trade its Bonds.

b) Bonds may be subject to optional redemption by the Issuer

An optional redemption feature in the Bonds may negatively affect their market value. During any period when the Issuer may elect to redeem Bonds, the market value of those Bonds generally will not rise substantially above the price at which it can be redeemed. This also may be true prior to any redemption period. The Issuer may be expected to redeem Bonds when its cost of borrowing is lower than the interest rate on the Bonds. At those times, an investor generally would not be able to reinvest the redemption proceeds at an effective interest rate as high as the interest rate on the Bonds being redeemed and may only be able to do so at a lower rate.

c) Referencing to an index may subject the Bonds to additional risk

The Issuer may issue Bonds with Principal or Interest determined by reference to an index (or formula), to changes in the prices of the securities or commodities or other relevant factors.

Potential investors should be aware that: they may receive no interest; they may lose all or a substantial portion of their principal; a relevant factor may be subject to significant fluctuations that may not correlate with changes in interest

rates or other indices; and timing of changes in a relevant factor may affect the actual yield to investors, even if the actual level is

consistent with their expectations; i.e., in general, the earlier the change in the Relevant Factor, the greater the effect on yield.

d) Changes in interest rates may affect the price of the Bonds

Where securities such as Bonds are offered with a fixed rate of interest, such securities are subject to price risk; as such securities may vary inversely with changes in prevailing interest rates. That is, where interest rates rise, prices of fixed rate securities fall and when interest rates drop, the prices increase. Accordingly, the extent of the fall or rise in the prices is a function of the existing coupon, days to maturity and the increase or decrease in the level of the prevailing interest rates. Increased interest rates which frequently accompany inflation and/or a growing economy are also likely to have a negative effect on the price of the Bonds.

b. Environmental Risks 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 Lagos State Government.

Mitigating Factor: Environmental impact analyses for prospective projects will be undertaken, negative impacts identified, and the measures for managing such impact proposed and applied. Furthermore, any impact on projected revenues is mitigated by the fact that the State will service its obligations under the Bond from the total IGR generated and not on project specific basis.

c. Regulatory Environment

The Statutory and Regulatory environment will change and the policies that have created an enabling environment for the issuance of the Bonds will be amended.


53

Mitigating Factor: The Federal Government and the respective regulators are committed to creating and sustaining an investment-friendly environment governed by stable policies.

d. Credit Risk The credit risk of any bond is that the issuer will default in its obligations and consequently, neither the semi-annual interest payments nor the re-payment of the principal at maturity will occur. Mitigating Factor: The track record of Lagos State in fulfilling obligations created through a Bond issuance is commendable, with the State having previously retired two bonds without default. Furthermore, the State has met all obligations to date under the two bond issuances of the N275 Billion Debt Issuance Programme as and when due. A stipulated 15% of the State‟s internally generated revenue which is paid into the CDSA to service all its debt obligations can also be increased by the State Assembly on the application of the State Executive Council, if required.

e. Specific Risk-Internally Generated Revenues The State may rely on its Internally Generated Revenues to meet coupon and principal re-payment obligations in respect of bond issuances. In the event that the Internally Generated Revenues does not attain the projected growth rate, this may impact the State‟s ability to fully fund the CDSA and pay accruing coupons and redeem the Bonds as and when due. Mitigating Factor: The extensive infrastructural Programme embarked upon by the State has led to higher tax compliance rates in the State, which has in turn led to a steady increase in the State‟s Internally Generated Revenues. In addition, the financial forecasts for the State are based on modest assumptions and do not also take into account certain events which could increase the revenue profile of the State.

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13. THE N167.5 BILLION DEBT ISSUANCE PROGRAMME

By virtue of a Shelf Prospectus issued on December 24, 2008 the Lagos State Government established a Debt Issuance Programme for the issuance of Bonds, Notes and Other Securities with an aggregate value of N275 Billion Debt Issuance Programme. Pursuant to the N275 Billion Programme, the State very successfully completed the following issuances: Tranche 1 – N50 Billion Bond In February 2009, the State raised a N50 Billion 5-year Fixed Rate 13% Bond, the first in the series of issuances. The Bonds were offered by way of a Public Offer for Subscription. At the conclusion of the offer, the Bonds were 117.93% subscribed; an oversubscription of 17.93% or N8,966,760,000 (Eight Billion Nine Hundred and Sixty-Six Million Seven Hundred and Sixty Thousand Naira). The Tranche 1 Bonds are secured by an Irrevocable Standing Payment Order (ISPO) on the State‟s Statutory Allocation. The State‟s semi-annual interest obligations under the Tranche 1 Bonds are funded directly from the Sinking Fund; with accumulations also being made in the Sinking Fund towards the retirement of the Bond in 2014. As at the date of this Shelf Prospectus, the State had serviced four (4) interest payments on the due dates of February 9 and August 9 promptly. Tranche 2 – N57.5 Billion Bond The Lagos State Government was the first sub-national (state government) within Nigeria to undertake a Bond Issuance by way of a Book Build. In April 2010 when the Book Build was undertaken, the State recorded bids with an aggregate value of N174,350,000,000 (One Hundred and Seventy-Four Billion Three Hundred and Fifty Million Naira) in respect of a proposed N50 Billion Bond at bid closure. At the conclusion of the Book Build, Lagos State issued a N57.5 Billion 7-year Fixed Rate 10% Bond (the N57.5 Billion included 15% of the initial value proposed for issue, in accordance with the prevailing SEC regulations) An alternative Security Trust Structure was evolved by the State in respect of the Tranche 2 issuance. Given the robust revenue profile of the State – with IGR representing circa 70% of total revenues – the approval of SEC was sought and obtained for the waiver of the issuance of an ISPO. Consequently, the State‟s interest obligations under Tranche 2 are serviced from the Sinking Fund; with the CDSA providing a guarantee to bondholders as regards all obligations under the issuance. Update on the Use of Proceeds – Tranches 1 and 2 Bond Issuances

The following provide a summary of the projects that have been executed from the proceeds of the N107.5 Billion raised from the Nigerian Capital Market by the State:

13. THE N 167.5 DEBT ISSUANCE PROGRAMME

55

LAGOS RAIL MASS TRANSIT


56

LAGOS BADAGRY EXPRESSWAY


57

LEKKI-IKOYI BRIDGE

58

14. NIGERIA OVERVIEW

The information in this section has been extracted from publicly available documents and publications which have previously been released

by various public and private organizations including the CBN, the Economic Intelligence Unit, the World Bank, the International

Monetary Fund, the Nigerian Bureau of Statistics; as well as other financial and economic publications. 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.

Overview General The Federal Republic of Nigeria occupies 923,768 square kilometres of West Africa, bordering the Republic of Benin to the west, Chad and Cameroon to the east, Niger to the north and the Gulf of Guinea to the south. Nigeria has a population of approximately 159 million. Nigeria consists of 36 states and the federal capital territory (“FCT”) of Abuja, which is located in central Nigeria. Lagos, the largest city in Nigeria, has a population of approximately 17 million. Nigeria achieved full independence from the United Kingdom on October 1, 1960 and became a federal republic in 1963. In 1999, following many years of military rule, a new constitution was adopted, and a peaceful transition to civilian government was completed under the leadership of President Olusegun Obasanjo, the first democratically elected civilian since the end of the last democratic rule from 1979 to 1983. Since 1999, the FGN has attempted to reconstruct Nigeria‟s political institutions, improve its international image, reform the economy, manage its oil wealth in a more sustainable way and diversify the economy beyond the oil industry. Presidential elections were held in 2007 and resulted in the election of late President Umaru Musa Yar‟Adua. Following the death of President Umaru Musa Yar‟Adua, Goodluck Ebele Jonathan was sworn in as President, in accordance with the Constitution, on May 6, 2010. The Peoples Democratic Party (“PDP”) is the ruling party in Nigeria and has been in power since 1999. General elections in Nigeria were held in April 2011. The National Assembly elections were held on April 9, 2011. Although there were alleged isolated cases of violence and other irregularities, it was generally reported that the elections were free, fair, peaceful and credible. The Presidential elections were held on April 16, 2011 and although the elections were reportedly conducted peacefully and credibly, prior to the formal announcement of the results, post-election violence and riots erupted in certain cities of some of the northern states of Nigeria (Kaduna, Gombe, Bauchi, Kano, Adamawa, Zaria and some parts of the Federal Capital Territory). Regardless, the Independent National Electoral Commission (“INEC”) and international observers upheld the elections as being well conducted and the INEC formally announced the incumbent President Goodluck Ebele Jonathan as the winner, with over 58.89% of the total votes cast. President Goodluck secured more than 25% of the votes cast in over two thirds of the states in Nigeria and avoided the need for a run-off. The current Constitution, which was adopted in May 1999 has undergone several amendments. It provides for a President, a National Assembly and a Judiciary. The National Assembly, with two chambers, comprises a Senate and a House of Representatives. The Senate, the upper chamber, for which elections were held on April 9, 2011, is made up of members elected for a four-year term. Each Nigerian state elects three senators while the FCT elects one senator (109 seats in total). The House of Representatives, the lower chamber, for which elections were held on April 9, 2011, has 360 members who are elected in single member constituencies for four-year terms. Overview of the Nigerian Economy Nigeria has the second largest economy in sub-Saharan Africa. Overall, despite the negative effects of the global financial crisis in recent periods, Nigeria‟s economy has continued to experience significant GDP growth.


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GDP. Real GDP grew 7.53% in the first half of 2010, 6.96% in 2009, 5.98% in 2008 and 6.45% in 2007. This growth was largely attributable to the continued growth in non-oil GDP, which grew 8.32% in 2009, 8.95% in 2008 and 9.52% in 2007. Overall GDP growth rate in 2011 was estimated by the NBS at 7.69%, marginally lower than 7.87% recorded in 2010. The FGN plans to reinforce economic growth in future periods by encouraging non-oil private sector growth, which it plans to facilitate through the implementation of its Vision 20:2020 plan. Oil prices and production. The Nigerian economy is highly impacted by oil and gas production, which accounted for 16.29% of GDP in 2009 and approximately 69.4% of total gross federally collectible revenue in 2009. Crude oil prices declined from an average of U.S.$101.15 per barrel in 2008 to U.S.$62.08 in 2009, increasing in 2010 to an average of U.S.$80.98 per barrel and in 2011 to about U.S.$106.32 per barrel. Oil production in 2009 and 2008 averaged 2.1 million barrels per day, compared to 2.5 million barrels per day in 2005. In 2010, oil production level was capped to an average of 2.47 million barrels per day and fell to approximately 2.18 million barrels per day in the third quarter of 2011.

External sector. Nigeria‟s external sector, like most economies, was under pressure during the global financial crisis and this was reflected in the decline in external reserves, capital withdrawals by portfolio investors and alower trade balance. Despite the pressure, monetary policy actions and exchange rate management combined toresult in a surplus outcome in the current account balance, which represented 13.65% of GDP in 2009 compared to 15.43% in 2008. The external reserves position increased in recent years from U.S.$28.3 billion in 2005 to U.S.$53billion in 2008, before dropping to U.S.$32.3 billion as of 31 December 2010. By December 31, 2011, foreign exchange reserves amounted to U.S.$32.36 billion. Fiscal deficit. The overall fiscal deficit increased from N419.5 billion in 2008 to N1,126.7 billion in 2009. The increase in the deficit in 2009 was largely the result of the decline of crude oil prices in 2009 compared to 2008 and was also due to an increase in both recurrent and capital expenditures. In the first eleven months of 2010, the overall fiscal deficit was N1,529.3 billion, largely as a result of an increase in recurrent expenditure.

Public debt. As of December 31, 2010, Nigeria‟s total public debt was U.S.$34.6 billion (provisional). External debt was U.S.$4.8 billion (provisional) as of 31 December 2010, a decrease from U.S.$20.5 billion as of 31 December 2005, attributable to the repayment and subsequent cancellation of the Paris Club debt and the repayment of the London Club debt. Additionally, in December 2010, the FGN entered into a U.S.$899.5 million credit agreement with the Export-Import Bank of China for the purpose of funding certain infrastructure projects. Drawdowns under this facility are tied to project completion milestones and as of December 31, 2010, no amount had been drawn. Nigeria‟s domestic debt was N4.5 trillion (provisional), or U.S.$29.8 billion as of December 31, 2010, compared to N1.5 trillion, or U.S.$11.8 billion as of December 31, 2005. The increase in domestic debt reflects the significant increase in borrowings through government bonds in the domestic market.

Inflation. The annual inflation rate was 6.6% as of 31 December 2007 and rose to 15.1% as of 31 December 2008. Inflationary pressure moderated slightly in 2009 and was 17% as of 31 December 2009, reflecting an increase in demand pressure due to fuel shortages linked to the speculation that petroleum product prices would be deregulated. The year-on-year headline inflation which was 11.8% in December 2010 moderated to 10.39% by December 2011. Reforms Nigeria is in the process of adopting and implementing a number of reforms aimed at making Nigeria one of the 20 largest economies in the world by 2020. The reforms are aimed at a number of areas, primarily diversifying the economy away from dependence on oil by addressing infrastructure and related issues to create a more favourable environment for continued growth of the non-oil and gas sectors of the economy.

The FGN has adopted the first National Implementation Plan (“First NIP”) as its medium-term plan to

implement the first stage of Vision 20:2020. A summary of some of these key reform agenda include:

The First NIP has six main areas of focus:


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Physical Infrastructure focusing on power, transport and housing;

Productive Sector focusing on the key sources of economic growth such as agriculture, oil and gas and manufacturing;

Human Capital and Social Development focusing on the social sectors of the economy, namely; education, health, labour, employment and productivity;

Building a knowledge-based economy focusing on building a knowledgeable workforce and ensuring widespread access to Information, Internet and Communication Technology;

Governance and General Administration focusing on election reform and combating corruption; and Regional Geopolitical Zone Development focusing on fostering accelerated, sustainable social and economic development in a competitive and friendly manner.

Oil and gas sector. The Government is currently reforming the petroleum industry and a general overhaul of the oil and gas sector is expected. The Petroleum Industry Bill (“PIB”), a major legislative proposal that would represent the most comprehensive overhaul of the structure of the oil and gas industry in Nigeria since commercial oil production began in the 1960s, is currently being considered by the National Assembly. Other significant reforms, including the Nigerian Content Act 2010, have recently been enacted. Power sector. In August 2010, the Government launched the “Roadmap for Power Sector Reform” which seeks, among other objectives, to remove obstacles to private sector investment in the power sector, permit the privatisation of the generation and distribution companies as well as facilitate the construction of new transmission networks and reform the fuel-to-power sector. The Government estimates that in order to meet the target of 40,000 mega watts by 2020, a total investment of U.S.$10 billion per annum will be needed throughout the whole power sector over the next 10 years, most of which it aims to achieve by incentivising the private sector to make such investments. Banking. The global financial crisis and the resulting decline in the Nigerian equities market in 2009 resulted in significant provisions by a number of Nigerian banks. Following a special examination and investigation of the 24 banks that comprised the Nigerian banking system, the CBN found significant irregularities and capital adequacy deficiencies at some of the banks, resulting in a number of proposed reforms including the creation of the Asset and Management Corporation of Nigeria (“AMCON”), a government-backed corporation set up with the primary objective of purchasing a significant portion of the non-performing assets in the Nigerian banking sector and providing assistance in the recapitalisation of undercapitalised banks to help restore the health of the banking sector. The CBN expects that AMCON will issue FGN-guaranteed bonds in the amount of approximately N4.5 trillion (U.S.$16.6 billion), of which approximately N1 trillion was issued in December 2010, and an additional aggregate of N1.7 trillion was issued in April 2011 (with the first N1.15 trillion tranche swapped for the initial consideration AMCON Bonds issued in December 2010) to acquire much of the estimated N2.2 trillion of non-performing assets in the banking sector.

Statistical Data: The following tables set out certain selected information about Nigeria. All data shown for 2011 is provisional.

For the year ended 31 December

2006 2007 2008 2009 2010 2011*

Domestic Economy

Nominal GDP (Naira billions) ....... 18,564.8 20,657.3 24,296.3 24,794.2 29,205.7 36,552.4

Real GDP (Naira billions) ............. 595.8 634.3 672.2 718.9 775.5 833.4

Real GDP (growth rate) (%) .......... 6.03 6.45 5.98 6.96 7.87 7.36


61


2006 2007 2008 2009 2010 2011*

Balance of Payments (Naira

billions)

Exports of Goods .................................. 7,324.7 8,309.8 9,907.6 8,832.4 13,009.9 14,234.2 Imports of Goods .................................. (2,828.8) (3,559.9) (4,369.8) (4,325.1) (6,648.5) (9,484.4)

Trade Balance ...................................... 4,495.9 4,749.9 5,537.8 4,507.3 6,361.3 4,749.8

Current Account ................................... 4,357.6 3,879.2 3,748.3 3,408.1 372.2 2,605.3


2006 2007 2008 2009 2010 2011*

Public Finance (Naira billions)

Total Gross Federally Collectible Revenue ............................................ 5,973.9 5,715.6 7,866.5 4,844.5 7,303.6 9,987.6

Federal Government Retained

Revenue ............................................ 1,438.4 2,333.6 3,193.4 2,642.9 3,088.7 3,083.4 Total Expenditure ................................. 1,809.7 2,450.8 3,240.8 3,452.9 4,194.2 4,259.9

Overall Deficit ...................................... (371.4) (117.2) (47.3) (810.0) (1,105.4) (1,176.5)


2006 2007 2008 2009 2010 2011*

Public Debt (U.S.$ billions) External Debt........................................ 3.5 3.7 3.7 3.9 4.6 5.6

Domestic Debt ...................................... 13.8 18.6 17.7 21.9 29.8 37.7

Gross Public Debt as % of GDP ........... 12.1 13 11.6 15.4 16.0 17.5

Sources: NBS, CBN, Office of the Accountant General of the Federation and DMO.

*data for the year ended 31 December 2011 is provisional

62

15. STATUTORY AND GENERAL INFORMATION Authorization and Purpose of the Lagos State Debt Issuance Programme The Second Debt Issuance Programme is authorized by virtue of the provisions of the Bonds Law, which authorises the State Debt Office to manage, conduct and implement any such Programme for the purposes of financing the State‟s Capital Budget, public investment projects and commitments or restructuring existing debts.

The State‟s Capital Budget, prepared within the Lagos State Medium-Term Fiscal Framework (2011-2013), was approved by the Lagos State House of Assembly on January 31, 2011. As enunciated by the Governor, the State will continue to aggressively pursue the objectives of the 10-Point Agenda in order to deliver democratic dividends to the Lagos State; and consequently the improvement of basic living and working conditions.

The Programme provides a framework through which the State may, from time to time, issue Bonds or a series of Bonds bearing its sole, full faith and credit, to public and private capital markets in order to finance the Capital Budget. Bonds issued shall be subject to the terms and conditions of the Programme, any Pricing Supplement/SSP(s) issued in connection with any specific Tranche or Series. The Pricing Supplement/SSP shall document financial, structural and operational details of each issue; and details of any material information on the particular issuance. The applicable terms of any Bonds shall be agreed between the State and investors, prior to issuance, and will be set out in the Terms and Conditions of the Programme as incorporated by reference to, modified by, or supplemented by an applicable Pricing Supplement/SSP.

Under the Programme, the State may from time to time issue Bonds denominated in Naira as described below, and having such minimum or maximum maturities as may be allowed or required from time to time by The Exchange, SEC and other statutory or regulatory authority.

A summary of the Terms and Conditions of the Programme and the Bonds appear on pages 23 to 28 of this Shelf Prospectus.

The Lagos State Bonds, Notes and Other Securities Issuance Law 2008 The Bonds Law was enacted on August 19, 2008 and provides for the State to borrow through the issuance of bonds, notes and other securities. The Bonds Law authorises the Debt Office – created by virtue of the Lagos State Debt Office (Establishment) Law 2009 - to issue instruments or other forms of debt securities and to raise and borrow any sums of money required to finance the capital budget of the State or refinance the obligations of the State in respect of its public investments projects. The Debt Office is obligated to obtain the prior approval of the Executive Council of the State, in the discharge of its powers under the Debt Office Law. Furthermore, the Bond Law establishes the CDSA into which 15% of the State‟s monthly IGR shall be paid. The CDSA shall be used solely for all the State‟s public debt repayment obligations. The following are extracts from the Bonds Law:

Section 1 (1) A Consolidated Debt Service Account which is a saving account to be fully funded from the 15% appropriated in sub-section (2) below is established for the purpose of servicing debt obligations of the Government under this Law.

(2) The House of Assembly appropriates fifteen percent (15%) of the monthly Internally Generated Revenue (IGR) of the Government to the Consolidated Debt Service Account.

(3) The sum appropriated under subsection (2) shall be deposited into the Consolidated Debt Service Account exclusively for all Government‟s public debt repayment purposes.

(4) The House of Assembly may at the request of the Governor upwardly revise the proportion of revenue to be set aside for the government‟s debt repayment purposes.

15. STATUTORY AND GENERAL INFORMATION

63

(5) Money in the Consolidated Debt Service Account shall be used: (a) to pay interest and principal when they become due on Government‟s public debt

obligations; and

(b) to accumulate a reserve for further security of Government‟s public debt obligations.

(6) The House of Assembly shall from time to time ensure that sub-sections (3) and (5) of this Section are complied with.

Section 9 (1) The Office with the approval of the Executive Council and subject to the provisions of this Law is authorised to do the following:

(a) issue any instrument or any other form of debt securities with such fixed, floating or zero coupon rates, and upon such other terms including the tenor thereof;

(b) issue the instruments or other debt securities in required tranches, sequence and currency; and

(c) raise and borrow any sums of money required to finance the capital budget of the Government or to refinance the obligations of the Government in respect of its public investment projects.

(5) The specific or aggregate amount that the Office may raise or borrow through any instrument referred to in subsection (1) of this Section, shall be determined taking into consideration the following:

(a) the total revenue of the Government for the year preceding the year in which the instruments are to be issued;

(b) the current revenue of the Government 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;

(e) the gross domestic product of the Government for the year preceding any issue; and

(f) the subsisting credit balances in the Consolidated Debt Service Account.

(6) The issuance of any instrument made pursuant to sub-section (2) of this Section shall be published by Legal Notice in the Official Gazette by the Commissioner after such Instrument has been issued in Nigeria and or abroad, and same has been announced to the general public.

(7) Any Legal Notice published pursuant to sub-section (6) of this Section shall contain detailed and 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 instruments;

(d) the dates in each year on which the interest on the loan shall be payable;

(e) the date of redemption of the registered instrument issued;

(f) the purpose of raising the loan;

(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 subscribers, or as required by any other relevant law relating thereto.

15. STATUTORY AND GENERAL INFORMATION

64

(8) Any Instrument issued under this Law may or may not be listed on any Stock Exchange or any equivalent trading floor in any jurisdiction.

Section 10 The date for the redemption of any instruments issued pursuant to this Section shall not be later than twenty-five (25) years from the date of issuance of the instruments.

Section 11 (1) The instruments to be issued pursuant to Section 9 of this Law shall be issued by the Office by means of:

(a) public offers;

(d) auctions;

(e) syndications;

(f) private placements;

(g) reverse enquiries; and

(h) such other transaction or issuance mode as may be determined by the Commissioner.

Section 18 (1) The instruments issued under this Law shall be transferable in the manner specified in the Legal Notice published in respect of their issuance.

(2) The title of the holder of any instrument 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, in the Register.

(3) Interests which has fallen due in respect of any instrument but which has not been paid to the holder for the time being, shall not be payable to a transferee of that instrument unless the instrument of transfer expressly provides for the payment of such interest to that transferee and the transferee‟s name has been registered in the Register.

Section 21 Save as otherwise provided in or under this Law, no notice of any trust in respect of any registered instruments shall be receivable by the Office or the Commissioner.

Section 22 No person shall be entitled to inspect or to receive information derived from any Register, book or other document kept or maintained by or on behalf of the Government in relation to registered instruments, save on the payment of such fee and under such circumstances, terms and conditions as may be prescribed.

Section 23 (1) The Commissioner may make regulations for the purpose of giving effect to the provisions of this Law subject to the approval of the House of Assembly.

Section 24 The Lagos State Development Bonds Law Cap. L18 Laws of Lagos State 2003 is repealed.

Official Listing on Stock Exchanges Bonds may be unlisted or listed on recognized Stock Exchanges such as The Exchange and/or other relevant Stock Exchanges. Each tranche of Bonds may be admitted to the Daily Official List and to daily trading by The Exchange separately, as and when issued, subject to the approval of the SEC and The Exchange and to the issue of the global Bond representing the Bonds of that tranche. As set out herein, this Prospectus and any supplement thereto will only be valid for the admission of the Bonds to the Daily Official List (and to trading on The Exchange and/or any relevant stock exchange) in an aggregate nominal amount which, when added to the aggregate nominal amount then outstanding of all Bonds previously or simultaneously issued under this Programme, does not exceed N167.5 Billion or its equivalent in other currencies. 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

65

16. RATINGS REPORT

The following information is an extract from the Rating Report prepared by Agusto & Co:

16. RATINGS REPORT

66

The following information is an extract from the Rating Report prepared by Global Credit Rating Co:

67

17. FINANCIAL FORECAST 17.1. REPORTING ACCOUNTANTS’ REPORT

The following is a copy of the letter on the revenue and expenditure forecast by KPMG Professional Services, the Reporting Accountants to the State on the Debt Issuance Programme.

Letter from the Reporting Accountants

The Executive Council Lagos State Government of Nigeria Alausa, Ikeja Lagos 25 July 2012

Dear Sirs,

Report on the Revenue and Expenditure Forecast

We have examined the accompanying revenue and expenditure projections of Lagos State Government of Nigeria

(“the State” or “the State Government”) for ten years to 31 December 2022 in accordance with the International

Standard on Assurance Engagements (ISAE3400) applicable to the examination of prospective financial

information. The Lagos State Executive Council is solely responsible for the forecast including the assumptions

set out on page 3 on which it is based.

Based on our examination of the evidence supporting the assumptions, nothing has come to our attention which

causes us to believe that these assumptions do not provide a reasonable basis for the forecast. Furthermore in our

opinion, the forecast is properly compiled on the basis of the assumptions made by the State Executive Council

and is prepared on a basis consistent with accounting policies normally adopted by the State. Actual results are

likely to be different from the forecast since anticipated events may or may not occur as expected and the

variation may be material.

Finally, we emphasise that the forecast information is not intended to, and does not, provide all the information

and disclosures necessary to give a fair presentation of the results of the activities of Lagos State Government in

accordance with the Constitution of the Federal Republic of Nigeria as amended 1989 and 1999; the Finance

(Control and Management) Act of 1958; the Financial Regulation and Revenue Allocation Laws Applicable in

Nigeria.

We have no responsibilities to update this report for events and circumstances after the date of this report. Yours Faithfully,

Oladapo R. Okubadejo

17. FINANCIAL FORECAST

68

17.2 LETTER FROM THE JOINT ISSUING HOUSES

The following is a copy of the letter from the Joint Issuing Houses on the Financial Forecast:

June 22, 2012 The Executive Council

Lagos State Government of Nigeria Alausa, Ikeja Lagos Dear Sirs and Madams,

PROFIT FORECASTS

We have discussed respectively with your good selves and Mr. D. Sunmoni, the Honourable Auditor-General, the bases and assumptions upon which the forecasts have been made and the accounting bases and calculations upon which the forecast was compiled. Having considered the assumptions that have made in preparing the forecasts as well as the accounting bases and calculations reviewed by Mr. D. Sunmoni, we consider that the forecasts (for which you all as members of the State Executive Council are solely responsible) have been made after due care and careful enquiry. Yours faithfully, For: The Joint Issuing Houses

FBN Capital Limited FCMB Capital Markets Limited Skye Financial Services Limited

Stanbic IBTC Bank Plc Vetiva Capital Management Zenith Capital Markets

Chapel Hill Advisory Partners Limited Afrinvest (West Africa) Limited Radix Capital Partners Limited

RC622258 RC 733583

RC 125097

RC261272

RC672560

RC446599


69

17.3 REVENUE AND EXPENDITURE FORECAST

Funding (N’billion) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Budget

Revenues

Internally Generated Revenues (IGR) 215 232 250 271 296 325 359 400 450 502 554

VAT allocation 61 65 69 74 79 84 89 94 100 106 113

Statutory allocation 61 65 69 74 79 84 89 95 100 107 113

Excess crude oil allocation 4 5 5 - - - - - - - - Cash inflow from bond issuance programme 80 74 60 49 32 15 - - - - -

Internal / multilateral loans 40 24 14 9 5 - - - - - -

Total Revenues 461 465 467 477 491 508 537 589 650 715 780

Expenditure

Recurrent expenditure (175) (176) (177) (179) (182) (186) (189) (192) (196) (199) (203)

Capital expenditure (207) (207) (207) (208) (211) (215) (222) (233) (247) (267) (291)

Bond issue cost (2) (2) (2) (2) (1) - - - - - - Multilateral debt funding

obligations (3) (3) (3) (3) (3) (3) (3) (3) (3) (3) (3) Internal debt funding

obligations (43) (44) (45) (35) (38) (40) (33) (15) (8) (4) (1)

Transfer to CDSA from IGR (24) (23) (26) (43) (48) (55) (71) (102) (124) (144) (162) ISPO deductions by Accountant

General (7) (10) (7) (7) (8) (9) (9) (8) (4) (3) (2)

Budget surplus - - - - - - (10) (36) (68) (95) (118)

Total Expenditure (461) (465) (467) (477) (491) (508) (537) (589) (650) (715) (780)

Transfer to CDSA (24) (23) (26) (43) (48) (55) (71) (102) (124) (144) (162)

Annual deduction from statutory allocations (7) (10) (7) (7) (8) (9) (9) (8) (4) (3) (2)

Total transfers to CDSA (31) (33) (33) (50) (56) (64) (80) (110) (128) (147) (164)

Cumulative Transfer to CDSA (64) (97) (147) (203) (267) (347) (457) (585) (732) (896)

Consolidated Debt Service Acct (CDSA)

Opening balance of CDSA 49 86 125 162 213 271 337 418 531 663 817

Additions to CDSA from IGR 24 23 26 43 48 55 71 102 124 144 162

Additions from ISPO 7 10 7 7 8 9 9 8 4 3 2

Interest earned on CDSA 6 6 4 1 2 2 1 3 4 7 12

CDSA before debt service 86 125 162 213 271 337 418 531 663 817 993


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17.4 ASSUMPTIONS

Basis of presentation

The forecasts for the years ending 31 December 2012 - 2022 have been prepared on the basis consistent with

Government Accounting Policies.

Assumptions

The following assumptions were applied in the preparation of the revenue and expenditure forecasts:

1. The internally generated revenue will increase by a CAGR of 9.9% over the forecast period;

2. The statutory allocation will increase by a CAGR of 6.3% over the forecast period;

3. Recurrent expenditure will increase by a CAGR of 1.5% over the forecast period;

4. Capital expenditure will increase by a CAGR of 3.5% over the forecast period;

5. An average of 19% of internally generated revenue (IGR) will be transferred over the forecast period into the Consolidated Debt Service Account for servicing of debt obligations from the Bond Programme;

6. Interest earned on the CDSA/Sinking fund deposits will be on average 6.5% over the forecast period;

7. Proceeds from the Bond issue will be received in the last quarter of 2012;

8. The Bond‟s interest payments shall accrue semi-annually to a Sinking Fund Account. The first payment of interest shall be made in the first quarter of 2013 and will be paid semi annually over the tenure of the Bond;

9. The inflation rate of Nigeria over the forecast period will average 14.2% annually; and

10. The growth rate in Real Gross Domestic Product (GDP) over the forecast period will average 6.4% annually.

71

18. FINANCIAL SUMMARY

OPINION OF THE AUDITOR GENERAL OF THE STATE ON THE 2011 ACCOUNTS


72

18.1 REPORTING ACCOUNTANTS REPORT

The following is a copy of the letter on the revenue and expenditure forecast by KPMG Professional Services, the Reporting Accountants to the Bond Issue.

The Executive Council Lagos State Government of Nigeria

Alausa, Ikeja

Lagos

25 July 2012

Dear Sirs

We have examined the audited financial statements of Lagos State Government (“the State”) for the five

years ended 31 December 2007, 2008, 2009, 2010 and 2011.

The financial statements, which have been prepared under the cash basis, were reported upon by the

Auditor-General of the State in line with Section 125 (5) of the 1999 Constitution of the Federal Republic of

Nigeria.

The financial statements on which the financial information is based are the responsibility of the State

Executive Council who approves their issue. Our responsibility is to issue a report on the financial

information based on our review. The State Executive Council is also responsible for the contents of the

prospectus in which this report is included.

Our review was conducted in accordance with International Standards on Review Engagements (ISRE) 2400.

This standard requires that we plan and perform our review to obtain moderate assurance as to whether the

financial statements are free from material misstatement. The review was limited primarily to inquiries from

the representatives of the State Executive Council, analytical procedures applied to financial data and a

review of evidence obtained by the Auditor-General on those financial statements, and therefore provide

less assurance than an audit. We have not performed an audit, and accordingly, we do not express an audit

opinion.

Based on our review, nothing has come to our attention that causes us to believe that the accompanying

financial information does not give a true and fair view of the state of affairs of Lagos State as at the dates of

the Statement of Assets and Liabilities stated and of its revenue and expenditure for each of the years then

ended, in accordance with the Constitution of the Federal Republic of Nigeria.

Yours faithfully

Oladapo R. Okubadejo


73

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The following are the significant accounting policies, adopted by the State Government in preparation of its financial statements:

1 Basis of Accounting

The financial statements prepared under the cash basis of accounting are in accordance with the generally accepted Public Sector Accounting Standards and is consistent with the budget estimates for the financial year. No adjustments have been made to reflect the impact of specific changes in the general price level on the financial statements.

2 Presentation of the financial Statements

Details of general and specific funds are disclosed by the way of notes in the financial statements of the State Government.

3 Depreciation

In line with the cash basis of accounting, fixed assets are not capitalised but written-off in the year of acquisition.

4 Stocks

Stocks are expensed in the year of purchase in line with the cash basis of accounting.

5 Investments

Investments are stated at cost and income from investments is credited on receipt of cash.

6 Foreign Currencies

Transactions in foreign currencies are converted into Naira at the approximate rates of exchange ruling

at the time they arise. Balances in the foreign currencies are translated at the exchange rates ruling at the

statement of assets and liabilities date.

7 Exchange Rates

The following rates are applicable at the year-end December 31, 2011: US$ – N162.2999, GBP- N252.3276,

EURO - N210.2059.


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18.2 STATEMENT OF ASSETS AND LIABILITIES

Dec. 2011 Dec. 2010 Dec. 2009 Dec. 2008 Dec. 2007

Notes N’m N’m N'm N'm N'm

ASSETS Cash 2 36,443 12,313 36,670 36,708 27,656 Investments 3 9,584 8,674 8,554 8,407 5,150 Special Funds 4 - - 1,226 14,783 9,057

Total Assets 46,027 20,987 46,450 59,898 41,863

FINANCED BY: Consolidated Revenue Fund

32,183 8,624 16,051 14,684 12,909

Capital Expenditure and Development Fund

5 4,075 3,492 2,854 4,979 5,491

Scholarship Fund 121 100 158 61 80 Special Funds 6 9,648 8,771 27,387 39,076 23,697 Treasury Clearance Accounts

- - - 1,098 (314)

Total Liabilities 46,027 20,987 46,450 59,898 41,863

18.3 STATEMENT OF REVENUE AND EXPENDITURE


Notes N’m N’m N'm N'm N'm

Opening Balance 8,624 16,051 14,684 12,909 8,193 Revenue

Statutory Allocation 7 118,827 99,637 82,387 41,180 35,755 Recurrent Revenue 8 206,450 173,448 178,502 138,183 83,023

Total Revenue 333,901 289,136 275,573 192,272 126,971 Expenditure Consolidated Revenue Charges

158 79 52 55 64

Other Recurrent Expenditure

9 154,060 145,433 119,470 122,533 108,998

154,218 145,512 119,522 122,588 109,062

Surplus/(Deficit) of Revenue over Expenditure

179,683 143,624 156,051 69,684 17,909

Transfer (to)/from Consolidated Development Fund

(147,500) (135,000) (140,000) (55,000) (5,000)

Closing Balance 32,183 8,624 16,051 14,684 12,909


75

18.4 NOTES TO THE FINANCIAL STATEMENTS 1. OBSERVATIONS FROM THE AUDITOR-GENERAL’S REPORT Based on the Auditor General‟s report in the 2011 financial statement, it was stated that only five (5) out of the eleven (11) modules of the Oracle Financials acquired by the State Government were deployed during the year. It was also noted that the State needs to commence utilisation of the outstanding modules in order to enjoy the benefits of the Enterprise Resource Planning Suite for effective and efficient accounting and reporting. 2. CASH AND BANK BALANCES


N’m N'm N'm N'm N'm

Cash and Bank Balances 36,443 12,313 36,670 36,708 27,656

3. INVESTMENTS


N’m N’m N'm N'm N'm

Quoted Investments 7,714 7,523 7,834 8,349 4,802

Unquoted Investments 1,870 1,151 720 58 348

9,584 8,674 8,554 8,407 5,150

4. SPECIAL FUNDS

Dec. 2011

Dec. 2010 Dec. 2009 Dec. 2008 Dec. 2007


Pension Fund - - 1,226 1,226 1,225

Treasury Clearance Fund - - - 13,557 7,832

- -

1,226 14,783 9,057

5. CAPITAL EXPENDITURE & DEVELOPMENT FUND

5.1OTHER CAPITAL RECEIPTS



Internal Loan 33,500 40,300 40,000 64,531 31,178

External Loans 41,905 - - - -

Bond issue - 57,500 50,000 - -

Dec. 2011 Dec. 2010 Dec. 2009 Dec. 2008 Dec. 2007 N’m N’m N'm N'm N'm

At 1 January 3,492 2,853 4,979 5,491 9,982 Transfer from/(to) Revenue & Expenditure account 147,500 135,000 140,000 55,000 5,000 Other Capital Receipts (Note 5.1) 83,923 110,810 93,598 98,471 74,167

234,915 248,663 238,577 158,962 89,149 Capital Expenditure (Note

5.2) (230,840)

(245,171) (235,723)

(153,983) (83,658)

4,075 3,492 2,854 4,979 5,491


76

Grants and Reimbursements - - - 1,775 869

Proceeds from VAT - - - 32,165 22,645 Proceeds from Sales of Investment - - - - 19,475

Other capital receipts 8,518 13,010 3,598 - -

Total 83,923 110,810 93,598 98,471 74,167

5.2 CAPITAL EXPENDITURE



Crop - - - - 70

Livestock - - - - 4

Forestry - - - - 11

Fisheries - - - - 34

Ministry of Agriculture 1,257 2,621 994 150 119

Rural Development 2,030 2,043 1,543 2,312 1,756

Manufacturing - - - - 0

Power (works) - - - - 1,045

Electricity Board - - - - 1,875

Commerce and Tourism 1422 5,560 2,977 1,983 2,533

Works 6600 2,999 3,909 5,747 27,530

Public Works Bureau - - - - 4,351

Transportation 790 759 1,777 3,235 3,985

Education 5467 4,728 5,982 7,490 4,201

Health 9362 6,782 8,021 9,151 4,625

Hospital Management Board - - - - -

Information Services 299 1,627 621 435 1,001

Sports and Culture 551 1,719 2,430 - 864 Youths and Social Development

224 435 - 1,953 328

Community Development - 402 145 - 472

State Univ. Basic Edu. Board - - - - 96

Water Resources and Supply 19 19 12 1,488 1,531 Environmental Sewage and Drainage

10,037 10,808 7,049 10,188 4,927

Urban and Regional Planning 899 2,207 783 115 3,166

Housing 958 3,285 8,351 3,930 520

Lands Bureau 1347 6,129 2,528 - 2,631 Civil and LG service commission

9 16 172 47 -

Ministry of Finance and STO 2741 2,661 3,484 1,707 - Ministry of Justice & Judicial Service

2826 3,909 2,503 1,681 -

Ministry of Home Affairs 244 283 587 572 -

House of Assembly 886 2,885 312 228 - Ministry of Economic Planning & Budget

8,960 37,838 19,279 11,269 -


77

Ministry of Local Government 18 18 74 246 -

Office of Auditor-General 7 16 9 3 - Ministry of Special Duty & Liaison

431 243 537 1,090 -

Ministry of Establishment, Pension & Training

15 50 21 16 -

Public Service, Chieftaincy & Boundary matters

302 745 437 291 -

LASG parastatals and CBD 42,891 45,082 28,253 22,531 - Ministry of Science & Technology

3,638 2,328 2,313 2,356 -

Office of Chief of Staff and MV Admin

1,006 985 436 435 -

Office of Infrastructure 58,979 41,123 42,701 52,972 -

Ministry of Women Affairs 1,380 1,556 1,284 660 -

Surveyor General 30 251 13 10 -

General Administration 47 47 70 - 9,369

Special Expenditure 4,735 4,721 7,182 4,549 5,997

Counterpart Funding 7,086 4,559 4,346 1,084 617

Facility Repayment 53,347 43,732 74,588 - -

Others - - - 4,059 -

Total 230,840 245,171 235,723 153,983 83,658

6. SPECIAL FUNDS



Government Staff Housing Fund 7 40 37 1 4

Treasury Clearance Fund - - 957 33,182 21,042

Local Government Fund - - 17,951 - -

TEPO Staff Housing Fund 3 5 4 5 9

TEPO Vehicle Refurbishment Fund 13 16 14 3 3

Staff Vehicle Refurbishment Revolving Loan

42 34 98 8 8

Vehicle Refurbishment Revolving Loan – lawyers

- 1 1 1 1

Share Purchase Fund 9,583 8,675 8,325 5,876 2,630

TOTAL 9,648 8,771 27,387 39,076 23,697

7. STATUTORY ALLOCATION

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

Federal Government 52.68 State Governments 26.72 Local Government Areas 20.60 . Total 100.00

Source: www.fmf.gov.ng (April 2012 Statutory allocation)


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8. RECURRENT REVENUE



Taxes 168,132 148,445 139,142 101,178 65,975

Fines and fees 4,110 1,503 11,131 9,376 7,485

Licences 1,994 1,839 6,608 1,752 992

Earnings and fees 829 8,077 2,559 3,984 3,109 Rent on government properties 254 - 489 741 408 Interest repayment and dividend 882 784 2,824 3,906 1,609 Reimbursement/Grant, contributions 1,488 - 3,053 1,079 8

Miscellaneous 9,404 7,558 9,069 7,571 3,437

Dedicated Rev 12,856 5,242 3,627 - -

Others - - - 8,596 -

Total IGR 199,949 173,448 178,502 138,183 83,023

Other revenue 6,501 - - - -

Total 206,450 173,448 178,502 138,183 83,023

9. OTHER RECURRENT EXPENDITURE



Personnel cost 70,003 57,736 45,454 40,499 33,118

Overhead cost 80,840 83,244 69,306 66,015 61,128 Grants, contributions and

subventions 3,217 4,453 4,710 16,019 14,752

154,060 145,433 119,470 122,533 108,998

10. CONTINGENT LIABILITIES

The Federal Government took over the management of all public sector external debt in 1995 and thus, debt servicing was treated as a first charge against the Federation Account. However, the Supreme Court‟s judgement on the Resource Control suit declared such practice as unconstitutional and ruled that each tier of government must bear its own burden. Consequently, the Federal Government distributed the country‟s external debt among the 36 states of which Lagos State‟s share of the debt is about US$190 million. The external debts were contracted between 1966 and 1993. The claim is being contested by the State Government and it includes penalties and interest accumulated during the years of management by Federal Government. The above notwithstanding, the claim is being serviced by monthly deductions of about N171 million from the State‟s statutory allocation. This repayment does not have a material impact on the finances of the State. 11. CLAIMS & LITIGATION The Lagos State Government in its ordinary course of business is involved in 157 cases. The claims against Lagos State have an estimated monetary value of N28.1 billion. The Ministry of Justice seeks out of court settlement of any claims with the likelihood of an unfavourable outcome to the Government. The Solicitors to the Issue are of the opinion that none of the claims is likely to have any material adverse effect on the State.


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12. COMMERCIAL LOANS AS AT 31 DECEMBER 2011

S/N DESCRIPTION LENDER PRINCIPAL

AMOUNT PRINCIPAL

OUTSTANDING

N‟m N‟m

1 Development of infrastructural facility Access Bank 6,000 900

2 Development of infrastructural facility FCMB 5,000 916

3 Development of infrastructural facility Oceanic Bank 5,000 916

4 Acquisition and deployment of smart

card ticketing system GTB

3,900 740

5 Mezzanine Facility to Lekki

Construction Company FCMB

5,000 2,396

6 Development of infrastructural facility First Bank 15,000 15,000

7 Investment in Shares First Bank 3,300 1,100

8 Bond bridging facility development of

infrastructural facility FCMB

15,000 15,000

9 Development of infrastructural facility Access Bank 7,000 5,600

10 Development of infrastructural facility First Bank 6,000 5,200

11 Development of infrastructural facility Zenith Bank 2,000 1,800

12 Acquisition of helicopters UBA 3,000 1,750

13 Part Finance of various projects First Bank 10,000 10,000

14 Part Finance of various projects GTB 10,000 10,000

15 To finance various on-going projects GTB 5,500 5,500

Total 101,700 76,818


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STATEMENT OF ADJUSTMENTS TO ASSETS AND LIABILITIES 1. CASH AND BANK BALANCES



Sub Treasuries 31,862 5,923 12,375 23,713 27,913 Less: Remittance within Lagos State (5,645) (3,424) (7,589) (6,715) (3,189)

26,217 2,499 4,786 16,998 24,724

Special Deposit with Banks 11,314 10,903 32,898 20,652 3,618

Personal Advances Fund 460 462 539 650 923

Deposit in J.C.F 36 33 31 28 34

Balance as per audited financial statement 38,027 13,897 38,254 38,328 29,299 Less: Adjustments Cash trapped in distressed banks (1,584) (1,584) (1,584) (1,620) (1,643)

36,443 12,313 36,670 36,708 27,656

STATEMENT OF ADJUSTMENTS TO REVENUE & EXPENDITURE ACCOUNTS 1. MISCELLANEOUS INCOME



Balance as per audited financial statement 9,404 7,557 9,033 7,548 3,433 Less: Adjustments (Write off)/Recovery of cash trapped in distressed banks - - 36 23 4

9,404 7,557 9,069 7,571 3,437

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19. OTHER GENERAL INFORMATION

19.1 STATEMENT OF INDEBTEDNESS Save as disclosed herein, as at the date on which this Shelf 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, 2011 the aggregate net debt position of the State amounted to N126,904,743,343.00. This consists of the State‟s internal loans (naira denominated borrowings), external loans (long term foreign currency borrowings) and the principal amounts of the Series I & II Bonds (N107.5 Billion) under the N275 Billion Bond Programme; and less the balance of N57,736,737,426.00 standing to the credit of the Sinking Funds, as managed by the Trustees as at June 30 2012. 19.2 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 79 of this Shelf 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 157 (One Hundred and Fifty Seven) cases involving the Lagos State Government. A review of these cases as supplied to the Joint 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 N28,144,528,483.80. However, it is important to note that a significant portion of this sum consists of arbitrary requests by claimants for general damages that are often either refused entirely or reduced significantly by the courts. General damages are in contrast to special damages that are based on an objective linear calculation of cost-recovery. In addition, the current strategy adopted by the Ministry of Justice is to settle amicably any claims with the likelihood of an unfavourable outcome to the Government. The Solicitors are also of the opinion that there are a number of unmeritorious claims that may likely be dismissed at the conclusion of the cases. 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 Joint Solicitors to the Issue are also not aware of any other pending or threatened litigation against the State. 19.3 COSTS & EXPENSES

The costs, charges and other expenses incidental to the Programme including the fees payable to the regulatory authorities, professional parties, brokerage commission, printing, distribution, publicity and advertising expenses will be determined at each issuance and will not exceed the maximum amount stipulated by the regulatory authorities and are payable by the State. 19.4 DOCUMENTS AVAILABLE FOR INSPECTION

The following documents will be available for inspection throughout the life of the Programme at the principal offices of the Joint Issuing Houses as indicated on pages 11-12, the Lagos State Debt Management Office, the Lagos State Ministry of Finance and the Lagos State Ministry of Finance, Alausa, Lagos:

The Bonds Law (incorporating the Programme Trust Deed);

The State‟s most recently published annual public accounts (including its annual Statement of revenue and expenditure);

The State‟s most recent annual budget as presented to the Legislative Assembly of Lagos State;

Letter from the Joint Solicitors on the outstanding claims, litigations and material contracts involving the State;


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The Shelf Prospectus issued in respect of the Programme;

any Pricing Supplement/SSP(s) for issues of Bonds pursuant to this Prospectus;

any Series Trust Deed issued further to this Prospectus;

the Vending Agreement; and other material contracts (as applicable)

the Reslution of the State Exceutive Council approving the Programme

the Resolution of the Lagos State House of Assembly approving the Programme

the SEC approval letter for the Shelf Prospectus

19.5 RELATIONSHIP BETWEEN THE STATE & ADVISERS There is no relationship between the State and any of its Advisers. 19.6 EXTRACTS FROM THE PROGRAMME TRUST DEED 3. APPOINTMENT OF TRUSTEES AND CREATION OF SECURITY INTEREST

3.1 The Trustees are hereby appointed as representative of the Holders, to hold the benefit of the covenants

and obligations of the Issuer herein contained, for the benefit of the Holders in accordance with the

provisions of this Deed.

3.2 Pursuant to the provisions of this Deed, and in furtherance thereof, the Issuer hereby assigns, transfers,

pledges, grants and conveys to the Trustees for the benefit of the Holders, a security interest over the

monies in the Sinking Funds, to secure the payment and performance in full of all its obligations under the

Programme.

3.3 The security interest created above shall be a continuing security and shall be of full force and effect until

the satisfaction, performance and discharge of all of the Issuer‟s obligations stated herein and in the

relevant Series Trust Deed. The term “obligations” as used herein, means all of the indebtedness,

obligations and liabilities of the Issuer to the Holders, individually or collectively, whether direct or

indirect, joint or several, absolute or contingent, due or to become due or hereafter arising under or in

respect of the Programme.

3.4 Without prejudice to the generality of the provisions of this Deed, the security interest created herein shall

be a first charge and shall rank prior to any other secured obligations of the Issuer and shall not be

subordinated to any present and future indebtedness of the Issuer.

4. DECLARATION OF TRUST

4.1 By execution hereof, the Trustees have accepted and agreed to be bound by the powers, duties and

obligations of the Trustees specifically set forth herein.

4.2 The Trustees shall have no duty, responsibility or obligation for the issuance of Debt Securities or for the validity or exactness thereof, or of any document relating to such issuance.

4.3 The Trustees shall have no duty, responsibility or obligation for the payment of Debt Securities except in

accordance with the terms and provisions hereof or any Series Trust Deed or any agreement to which it is a party, and only to the extent of the applicable Sinking Fund held in trust by the Trustees for the purpose of such payment.


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4.4 The duties and obligations of the Trustees shall be determined solely by the express provisions hereof, and no implied powers, duties or obligations of the Trustees, save as mandated by the ISA, shall be construed into this Deed.

5. CREATION OF FUNDS

Pursuant to the provisions of the Law, there are hereby established the following Funds:

a) The Sinking Funds, to be administered by the Trustees separately for each Series of Bonds. The

amounts standing to the credit of each Sinking Fund from time to time shall be applied to meet the obligations of the Issuer as follows:

(i) Coupon Payments;

(ii) Trustees fees and expenses; and (iii) Principal repayment on the Maturity Date or Early Redemption Date (as the case may be).

b) Amounts in each Sinking Fund shall be pledged to the Holders under the applicable Series of

Bonds. 11 OBLIGATIONS OF THE ISSUER

The Issuer covenants and agrees that:

11.1 it will ensure and promptly cause to be paid into the applicable Sinking Fund, the principal, premium, (if any), coupon, and other payments due in respect of each Series of Bonds issued hereunder at the place, on the dates and in the manner provided herein and the applicable Series Trust Deed.

11.2 without limiting the generality of the granting Clauses set forth in Clause 3.2 above and as security for the

payment of the principal, coupon, premium, (if any) and other payments due with respect to the Bonds, it hereby grants the Trustees as a first charge, a pledge of and lien on the funds in the Sinking Funds. Such pledge shall be valid and binding from the date hereof and the Sinking Funds shall immediately be subject to such pledge as and when deposited into the account, without any further act.

11.3 save for the security interest referred to in Clause 11.2 above, it will not create any pledge, lien or other

encumbrance upon, or permit any pledge, lien or other encumbrance to be created on the Sinking Funds. 11.4 it will, where required pursuant to the terms of any Series Trust Deed, direct the AGS to issue on behalf of

the State, an ISPO authorising the AGF to deduct from the monthly statutory allocations accruing to the State from the Federation Account, such amounts as are specified by the Trustees as required to be paid into the applicable Sinking Fund, and directing same to be paid into such Sinking Fund for the purpose of further securing the fulfilment of the Issuer‟s obligations with respect to principal and or coupon payments on the Debt Securities.

11.5 notwithstanding the specific provisions of Clause 11.4 above, it will do or procure a Relevant Agency to ,

where required pursuant to the terms of any Series Trust Deed, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, such instruments supplemental hereto and such further acts, instruments and transfers as the Trustees may reasonably require for better assuring, transferring, conveying, pledging, assigning and confirming unto the Trustees, the State‟s and or the Relevant Agency‟s interest in and to the Sinking Fund and all other property that is conveyed, pledged or assigned to secure or provide for the payment of the principal, premium, (if any), and coupon on the Bonds in the manner and to the extent contemplated herein or therein.


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11.6 it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions on its part to be performed as provided herein and in the relevant Series Trust Deed for every issue of Bonds executed and delivered hereunder and in all proceedings of the State pertaining thereto.

11.7 it shall pay the Trustees such fees as may be agreed between the Parties, and reimburse the Trustees, all

reasonable and proper out of pocket costs and expenses as it may incur in connection with the performance of their duties under this Deed including the costs for convening and holding meetings of Holders; provided that, for any additional costs which will cause the costs to exceed, in the aggregate, [One Million Naira (N1,000,000)] in any one year, the Trustees shall seek and obtain the prior written consent of the Commissioner to incur such costs and expenses.

11.8 make available to the Trustees, any monies necessary to perform or discharge any contractual commitment, indemnity or other obligation entered into by or binding upon the Trustees in the exercise of their powers under this Deed.

12 POWERS, RIGHTS, DUTIES AND RELIEFS OF THE TRUSTEES

12.1 Subject to the provisions of the Law and this Deed, the Trustees shall enjoy all powers, reliefs, and indemnities of Trustees preserved under the Trustees Act and all other applicable laws for the time being in force.

12.2 The Trustees shall have the power to:

12.2.1 effectively manage any Sinking Fund in accordance with the Law, for the purpose of making principal and or coupon payments on each Series of Bonds issued under the Programme;

12.2.2 enforce any agreement or covenant made to secure the interest of the Holders, and resort to

such remedies as may be appropriate, including instituting or defending proceedings in connection with the management of any Sinking Fund;

12.2.3 do any act in accordance with the Law, the ISA, and any applicable law which shall be for the

benefit of the Holders. 12.3 The Trustees shall have the following duties and responsibilities to:

12.3.1 safeguard the security for the State‟s debt obligations under the Programme provided by the

Sinking Fund; 12.3.2 apply the funds in the Sinking Fund only as specified under the Law, and to exercise the degree

of care, skill and diligence of a prudent financial expert in the management of the Sinking Fund;

12.3.3 retain control over the Sinking Funds and keep the moneys and Assets derived from their respective management separate from all other monies and assets within its control, in their ordinary course of business;

12.3.4 advise the State when contributions to a Sinking Fund will be sufficient with or without further

accumulations of Coupon, but without further payments of contributions, to enable the State to redeem the Bonds, at the time of their maturity; and also to inform the State as to when to recommence contributions into the applicable Sinking Fund;

12.3.5 summon, as and when necessary, meetings of all Holders of a Series whereat a statement of affairs on the management of the applicable Sinking Fund shall be presented, and or any other necessary business and or matter shall be presented and determined. A meeting shall be convened by the giving of at least twenty-eight (28) clear days written notice to all Holders


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(specifying the agenda at the meeting), and the said notice shall also be published in at least two (2) national newspapers. The procedure and regulations at such a meeting of the Holders shall be determined by the Trustees; and

12.3.6 prepare and deliver to the Commissioner and the SEC,quarterly reports and financial

statements in respect of the management of each Sinking Fund and in a format approved by the Commissioner/SEC.

12.4 It is hereby expressly agreed and declared as follows:

12.4.1 The Trustees, acting reasonably and in good faith, may in relation to this Deed, act on the

opinion or advice of, or any information from any solicitor, valuer, surveyor, broker, auctioneer, accountant, or other expert, whether obtained by the State or by the Trustees, and shall not be responsible for any loss occasioned by their reliance on such opinion, advice or information; and any such advice, opinion or information may be obtained or sent by letter, facsimile or electronic mail;

12.4.2 The Trustees shall not be responsible for the monies paid by Holders for the Debt Securities or

be bound to see to and or monitor the application thereof;

12.4.3 Save as herein otherwise provided, the Trustees shall not be bound to take any steps to ascertain whether any event has happened upon the occurrence of which any Series of Bonds may be declared immediately repayable;

12.4.4 The Trustees shall not be responsible for having acted upon any resolution passed at a duly

convened, properly constituted meeting of the Holders in

respect whereof minutes have been made and signed, even though it may subsequently be found that there was some defect in the constitution of the meeting or the passing of the resolution with the effect that the resolution was not valid or binding upon the Holders;

12.4.5 Without prejudice to the right of indemnity conferred by law on Trustees, the Trustees and

every attorney, manager, agent or other person appointed by it hereunder shall be entitled to be indemnified by the State in respect of all liabilities and expenses incurred by them or him in the execution of the powers and trusts hereof or of any powers, authorities or discretions vested in them or him pursuant to these presents provided that the Trustees have not been grossly negligent or has acted in default of their powers;

12.4.6 Without prejudice to the jurisdiction of any competent court, the Trustees shall have the full

powers to determine all questions and doubts arising in relation to any of the provisions hereof, (whether or not the same shall relate in whole or in part to acts or proceedings of the Trustees hereunder);

12.4.7 The Trustees shall not be liable for any act pursuant to or under this Deed, save only for any

breach of trust committed by them, provided that nothing contained in this Clause shall exempt the Trustees from or indemnify them against any liability for breach of trust where the Trustees fail to show the degree of care and diligence required of them, having regard to the provisions hereof conferring on them powers, authorities or discretions;

12.4.8 The State shall indemnify the Trustees in so far as may be lawful in respect of all costs and

expenses incurred by the Trustees in relation to or arising out of any application made to any court by the Trustees or any of the Holders for an order that the trust hereof may be carried out under the direction of the court or for an order or declaration relating to the administration of


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the trust hereof or the enforcement of the rights hereunder of the Trustees or the construction of this Deed;

12.4.9 In the absence of bad faith and gross negligence on the part of the Trustees, the Trustees may

conclusively rely upon and shall be protected in acting or refraining from acting upon any document, including but not limited to any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order or other paper or document reasonably believed by it to be genuine and to have been signed or presented by proper officials of the State relating to any matter primarily within the knowledge of the State, the Holders or agents or attorneys of the Holders, as sufficient evidence thereof; provided that in the case of any such document specifically required to be furnished to the Trustees hereby, the Trustees shall be under a duty to examine the same to determine whether it conforms to the requirements thereof. The Trustees shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, or other paper or document submitted to the Trustees; provided however that the Trustees, in their discretion, may make such further inquiry or investigation into such facts or matters as them may deem prudent;

12.4.10 Subject to the provisions of this Deed, the Trustees shall be entitled to assume without enquiry,

in the absence of knowledge by or express notice to it to the contrary, that the State is duly performing and observing all the covenants and provisions herein contained which are to be performed and observed by the State and it shall be in the discretion of the Trustees whether to take any action or proceedings or to enforce the performance thereof, and the Trustees shall not be bound to declare any Series of the Bonds immediately repayable or to take any steps to enforce payment thereof or any of the provisions of this Deed unless and until in any of such cases the Trustees is required to do so in writing by the registered Holders of at least three quarters (¾) of the nominal value of the Debt Securities or by a Special Resolution passed at a duly convened meeting of Holders; provided that the Trustees shall in any case inform the Holders of the happening of any Event of Default that comes to their knowledge;

12.4.11 The Trustees in the exercise of the powers and discretions vested in them pursuant to this Deed

shall comply with the provisions of the ISA and any other applicable law.

12.5 Notwithstanding any other provisions hereof, the Trustees shall have no liability for (a) an error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee(s) was negligent in ascertaining the pertinent facts or (b) action taken or omitted to be taken by it in good faith in accordance with the lawful direction of the Holders of not less than a majority in Principal Amount of the Debt Securities then Outstanding.

12.6 The Trustees shall not enter into contracts or other arrangements that would amount to a conflict of interest in the performance of their obligations under the Law or this Deed, or any other customary obligations of a trustee.

12.7 Prior to an Event of Default and after the curing or waiving of all Events of Default which may have

occurred, the Trustees shall not be liable except for the performance of such duties as specifically set down herein.

12.8 The Trustees shall have no liability for any act or omission to act hereunder, or under any other instrument or document executed pursuant hereto except for the Trustee‟s negligence and misconduct.


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12.9 Upon the occurrence of an Event of Default, the Trustees shall subject to the provisions of this Deed, exercise such rights and utilise such powers vested in them under this Deed, and the ISA, and shall use the required degree of care and skill in the exercise of their duties.

12.10 The Trustees shall not be required to expend or risk their own funds or otherwise incur any liability in the

performance of their duties or in the exercise of their rights or powers as Trustees, except such liability as may result from their negligence and/or misconduct.

12.11 It is hereby expressly agreed and declared as follows:

12.11.1 the Trustees, acting reasonably and in good faith, may in relation to this Deed, act on the opinion or advice of, or any information from any solicitor, valuer, surveyor, broker, auctioneer, accountant, or other expert, whether obtained by the Issuer or by the Trustees, and shall not be responsible for any loss occasioned by their reliance on such opinion, advice or information; provided however that the Trustees have exercised due care & diligence in relying on any such advice opinion or information; and any such advice, opinion or information may be obtained or sent by letter, facsimile or electronic mail;

12.11.2 without prejudice to any provision of this Deed, the Trustees may employ and pay an agent,

whether a solicitor or other person, to transact or concur in doing all acts required to be done by the Trustees, including the receipt and payment of money, and any such person shall be entitled to charge and be paid all usual professional fees and other charges provided however that the Trustees shall not thereby be discharged of responsibility or liability for all such acts; and

12.11.3 the Trustees in the exercise of the powers and discretions vested in them pursuant to this

Deed shall comply with the provisions of the ISA and any other applicable law.

14 ENFORCEMENT

The rights and duties of the Trustees, and the rights and duties of the Holders in respect of the Bonds as to recovery of amounts owing on the Bonds upon the occurrence of an Event of Default or the enforcement of the provisions of this Deed are set out in Condition 10 (Enforcement).

16 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEES

Each of the Trustees hereby warrants to the State that: 16.1 it is a Company within the meaning of the CAMA; 16.2 it is duly registered and authorised by the SEC to provide corporate trust services in Nigeria; 16.3 it has the resources, capacity and expertise to act on behalf of the Holders with regard to every issuance of

Debt Securities under the Law and shall comply with the provisions of the Law, the ISA, this Deed and the relevant Series Trust Deed in the performance of their obligations;

16.4 it shall provide any information that the SEC or the Commissioner may require in connection with its

obligation to act on behalf of Holders; 16.5 it shall not allow any conflicts to occur between its obligations in connection with and under the

Programme and its commercial interests;

16.6 it does not have any subsisting fiduciary relationship with the State; and


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16.7 it shall, at all times, adhere to the terms and conditions specified in this Deed.

17 REPRESENTATIONS AND WARRANTIES OF THE ISSUER

17.1 The Issuer hereby warrants to the Trustees that it shall do all acts and things within its powers which are necessary:

17.1.1 to give full effect to the Debt Securities, when issued as provided under the Law; 17.1.2 to establish the Debt Securities as a valid, binding and legal obligation of the Issuer according to

the meaning and intent thereof;

17.1.3 for the creation, execution and delivery of this Deed, which shall also be deemed to be a security agreement; and

17.1.4 for the creation, execution and issuance of the Debt Securities, subject to the terms hereto.

17.2 To the extent that the Issuer may in any jurisdiction claim for itself or its assets or revenues immunity

from suit, execution, attachment (whether in aid of execution, before judgment or otherwise) or other legal process instituted in relation to this Deed or the Bonds and to the extent that such immunity (whether or not claimed) may be attributed in any such jurisdiction to the Issuer or its assets and or revenues, the Issuer agrees not to claim and irrevocably waives such immunity to the fullest extent permitted by the laws of such jurisdiction.

18 REMOVAL AND RESIGNATION OF TRUSTEES 18.1 All or any of the Trustees may resign as Trustees at any time, by giving not less than thirty (30) days prior

written notice to that effect to the Commissioner, the SEC and the Holders, and where all of the Trustees resign, such resignations shall not be effective until a successor(s) to the Trustees is appointed in accordance with the Law and this Deed; provided that the Trustees shall continue to hold the rights conferred and perform the obligations imposed on them by this Deed until they have effectively resigned as Trustees.

18.2 All or any of the Trustees may also be removed where the Commissioner receives a written resolution

passed by Holders of at least 75% in value of the Bonds Outstanding requesting that the appointment of the Trustees be determined; or where the majority of Holders approve the termination of the Trustee(s) due to a material breach of the terms of this Deed or the Rules by the Trustee.

21 UNDESIRABLE SITUATIONS AND PRACTICES

21.1 For the purpose of this Deed, an undesirable situation or practice is a situation or practice which threatens or may threaten fair, orderly and transparent management of the Sinking Fund, and the implementation of its investment objectives which may eventually prejudice the interests of the Holders. These include:

21.1.1 any action or proposed action by a government or any of it agencies including industry

regulators, or any exceptional or unforeseen circumstance, which is at variance with or which threatens or may threaten the objective of the Trust.


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21.1.2 an order by a court of competent jurisdiction or a company resolution passed for the dissolution of or appointment of an administrator for the Trustees (otherwise than in the course of a reorganisation or restructuring of the Trustees on a solvent basis);

21.1.3 where any person takes any step, and it is not withdrawn or discharged within ninety (90) days,

to appoint a liquidator, manager, receiver, administrator, administrative receiver or other similar officer in respect of any assets of a Trustee;

21.1.4 where a Trustee convenes a meeting of its creditors or makes or proposes any arrangement or

compromise with, or any assignment for the benefit of its creditors. 21.2 If in the opinion of the Commissioner, an undesirable situation or practice has developed or is developing

regarding the activities of the Trustee(s) and or the management of the Sinking Fund, the Commissioner may take any steps to correct the situation or practice, including: 21.2.1 with the approval of the Governor and a by a majority decision of all the Holders, suspending

the Trustee(s) and recommending another Trustee or Trustees to the Governor to act in his place during the period of the suspension;

21.2.2 remove the Trustee (s) in accordance with the provisions of this Deed and appoint another Trustee(s) in accordance with this Deed;

21.2.3 giving directions to the Trustee(s) to act in such a manner as will correct or assist in overcoming

the situation or practice; or 21.2.4 taking any other action it considers necessary to assure the proper and efficient management of

the Sinking Fund, maintain its integrity and avoid any adverse effect of the situation or practice on the interest of the Holders.

21.3 In making decisions to address an undesirable situation or practice, the Commissioner may, but is not

obliged to consult with, obtain a report from, or take advice from other persons as he deems fit.

21.4 If the Commissioner determines that the undesirable situation or practice has sufficiently abated to allow for the proper management of the Sinking Fund, the Commissioner shall order the removal of any restrictions which may have been imposed or placed, and he may make such additional orders as he may deem necessary or appropriate.

24 TERMINATION AND DURATION

24.1 This Deed shall remain in full force and effect until the earlier of the:

24.1.1 discharge of all the obligations of the Issuer under the Programme; or

24.1.2 unconditional release of the Issuer from all of its obligations under this Deed. 24.2 In the event of termination of this Deed in accordance with the provisions hereof, the Trustees shall

immediately account for and deliver up all of the Assets in their possession to the Issuer.


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SCHEDULE 1

PROVISIONS FOR MEETINGS OF THE HOLDERS

1. Who may Convene Meetings

Who may Convene Meetings

The State or the Trustees respectively may at any time at their discretion, and the Trustees shall on the requisition in writing of the Holders holding not less than three-quarters (¾) of the nominal amount of the Debt Securities for the time being Outstanding, and upon being indemnified to their satisfaction against all costs and expenses to be thereby incurred, convene a meeting or meetings of the Holders in accordance with the provisions of this schedule to discuss and determine any matter affecting their interest. Any such meeting shall be held at such place as the Trustees shall determine or approve.

2. Notice of Meetings

2.1 A meeting of the Holders may be called by giving not less than twenty-eight (28) days‟ notice in writing. 2.2 A meeting may be called after giving shorter notice than that specified in paragraph 2.1 above if consent is

accorded thereto by Holders holding not less than seventy-five per cent (75%) of the nominal amount of the Bonds for the time being Outstanding.

3. Consent and manner of service of notice

3.1 Every notice of a meeting shall specify the place, the day and hour of the meeting and shall contain a

statement of the business to be transacted and the terms of every resolution to be proposed thereat.

3.2 Notice of every meeting shall be given to the State when the meeting is convened by the Trustees:

3.2.1 every Holder;

3.2.2 the person entitled to the Debt Securities in consequence of the death, insolvency, winding-up or dissolution of a Holder by sending it through the post in a pre paid letter addressed to him by name or by the title of the representative of the deceased or assignee of the insolvent or by any like description at the address (if any) supplied for the purpose by the person claiming to be so entitled, or until such an address has been so supplied, by giving the notice in any manner in which it might have been given if the death, insolvency, winding-up or dissolution had not occurred;

3.2.3 to the Registrar; and

3.2.4 to the Trustees when the meeting is convened by the State.

3.3 The accidental omission to give notice to or the non-receipt of notice by any Holder or other person to whom it should be given shall not invalidate the proceedings of the meeting.


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4. Quorum for Meeting

4.1 Any two (2) or more persons holding or representing by proxy at least one-quarter (¼) of the nominal

amount of the Bonds for the time being Outstanding shall be a quorum for the conduct of business at a meeting of the Holders unless the business of the meeting includes the consideration of a Special Resolution, in which event the necessary quorum shall be two (2) or more persons holding or representing by proxy a clear majority of the nominal amount of the Bonds for the time being Outstanding and no business shall be transacted at any meeting unless the requisite quorum be present when the meeting proceeds to business provided that at any meeting the business of which includes any of the following matters (each of which shall only be capable of being effected after having been approved by Special Resolution):

(a) to amend the dates of maturity or redemption of the Bonds, any Instalment Date or any date for

payment of interest or Coupon on the Bonds;

(b) to reduce or cancel the nominal amount of, or any Instalment Amount of, or any premium payable on redemption of the Bonds;

(c) to reduce the rate or rates of interest in respect of the Bonds or to vary the method or basis of

calculating the rate or rates or amount of interest or the basis for calculating any Coupon in respect of the Bonds;

(d) if a Minimum and/or a Maximum Rate of Interest, Instalment Amount or Redemption Amount is

specified in respect of the Bonds, to reduce any such Minimum and/or Maximum;

(e) to vary any method of, or basis for, calculating the Final Redemption Amount, the Early Redemption Amount or the Optional Redemption Amount, including the method of calculating the Amortised Face Amount;

(f) to vary the currency or currencies of payment or denomination of the Bonds of a Series, or;

(g) to modify the provisions concerning the quorum required at any meeting of Holders or the

majority required to pass a Special Resolution,

the necessary quorum shall be two or more persons holding or representing not less than 75%, or at any adjourned meeting not less than 25%, in nominal amount of the Bonds for the time being Outstanding.

4.2 If within an hour from the time appointed for holding the meeting a quorum is not present, the meeting, if

called upon the requisition of the Holders, shall stand dissolved. In any other case, the meeting shall stand adjourned to such day and time not being less than seven (7) days thereafter and to such place as the Chairman may determine.

4.3 At least three (3) days‟ notice of any adjourned meeting shall be given in the same manner as for an

original meeting, but it shall not be necessary to specify in such notice the business to be transacted at the adjourned meeting. Any two (2) or more persons being Holders or holding proxies for Holders whatever the amount of Bonds held by them, shall be a quorum for all purposes including the passing of Special Resolutions and to decide upon all matters which could properly have been disposed of at the meeting from which the adjournment took place.


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5. Chairman of Meeting

5.1 Such person nominated by the Trustees shall be entitled to take the chair at every meeting and if no such

nomination is made or if at any meeting the person nominated shall not be present within twenty (20) minutes after the time appointed for holding the meeting the Holders personally present shall on a show of hands elect one of themselves to be the Chairman thereof.

5.2 If a poll is demanded on the election of the Chairman it shall be taken forthwith, the Chairman elected on a show of hands shall exercise all the powers of the Chairman until the result of such poll is declared.

5.3 If some other person is elected Chairman as a result of the poll he shall be the Chairman for the rest of the meeting.

6. Persons entitled to attend meeting

In addition to the Holders, the Trustees, their solicitors and any authorised officer of the State and any other person authorised in that behalf by the Trustees may attend any meeting but shall not be entitled to vote thereat.

7. Evidence of Passing of Resolution

At any meeting a resolution or any question put to the vote of the meeting shall be decided on a show of hands unless a poll is demanded in the manner hereinafter mentioned, and unless a poll is so demanded a declaration by the Chairman that on a show of hands the resolution has been carried either unanimously or by a particular majority or lost or not carried either unanimously or by a particular majority, and an entry to that effect in the books containing the minutes of the proceedings of the meeting, shall be conclusive evidence of that fact without proof of the number of proportion of the votes cast in favour of, or against such resolution.

8. Demand for Poll

8.1 8.1 Before or on the declaration of the result of the voting on any point or question on a show of

hands, a poll may be ordered to be taken by the Chairman of the meeting on his own motion, and shall be ordered to be taken by him on demand made in that behalf by at least five (5) Holders having the right to vote on the resolution and present in person or by proxy or by the holders of not less than one-quarter (¼) in nominal amount of the Bonds for the time being Outstanding.

8.2 The demand for a poll may be withdrawn at any time by any person or persons who made the demand.

9. Time of taking Poll

9.1 A poll demanded on a question of adjournment shall be taken forthwith.

9.2 A poll demanded on any other question (not being a question relating to the election of a Chairman as

provided for in Paragraph 6 hereof) shall be taken in such manner and at such time not being later than thirty (30) days from the time when the demand was made as the Chairman may direct.

10. Votes

On a show of hands, every Holder who is present in person or by proxy or (being a body corporate) is present by its duly authorised representative shall have one (1) vote, and on a poll every Holder who is


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present in person or by proxy shall have one (1) vote in respect of every unit of the Bond of which he is the holder.

11. Representatives of Bodies Corporate

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

12. Proxies

12.1 The Holder or in case of joint holders any one of them shall be entitled to vote in respect thereof either in

person or by proxy and in the latter case, as if such joint holders were solely entitled to such Bonds. A Holder shall be entitled to appoint another person (whether a Holder or not) as his proxy to attend and vote instead of himself.

12.2 In every notice calling a meeting of the Holders there shall appear with reasonable prominence a statement that a Holder entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself and that a proxy need not be a Holder.

12.3 The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed, or a notarized copy of the power of authority, shall be deposited at such place as may be specified in the notice convening the meeting or in some document accompanying the same or if no place is so specified then at the office of the Trustees for the time being, not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote or in the case of a poll not less than twenty-four (24) hours before the time appointed for the taking of the poll, and in default the instrument of proxy shall not be treated as valid.

12.4 The instrument appointing a proxy shall:

12.4.1 be in writing in the usual common form or such other form as the Trustees may approve; and

12.4.2 be signed by the Holder so appointing or his attorney duly authorised in writing or if the Holder so appointing is a body corporate be under its seal or be signed by an officer or any attorney duly authorised by it.

12.5 No instrument appointing a proxy shall be valid after the expiration of twelve (12) months from the date

named in it as the date of execution. An instrument appointing a proxy shall be deemed to confer authority to demand or to join in a demand for a poll.

12.6 Every Holder entitled to vote at a meeting of the Holders or on any resolution to be moved thereat shall be entitled during the period beginning twenty-four (24) hours before the time fixed for the commencement of the meeting and ending with the conclusion of the meeting to inspect by himself or through a duly authorised person, the proxies lodged at any time during the business hours of the Trustees, provided that not less than three (3) days‟ notice in writing of the intention so to inspect is given to the Trustees.

12.7 A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or the revocation of the proxy or of the authority under which the proxy was executed, provided that no intimation in writing of such death, insanity or revocation shall have been received by the Trustees at their registered office before the commencement of the meeting or adjourned meeting at which the proxy is used.


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13. Entitlement of a Holder to vote differently

On a poll taken at a meeting of the Holders, a Holder entitled to more than one vote, or his proxy or other person entitled to vote for him as the case may be need not, if he votes, use all his votes or cast all his votes in the same way.

14. Scrutineers at Poll

14.1 Where a poll is to be taken the Chairman of the meeting shall appoint two (2) scrutineers to scrutinize the votes given on the poll and to report thereon to him.

14.2 The Chairman shall have power at any time before the result of the poll is declared to remove a scrutineer from office (where the scrutineer has abused his office or committed like offences) and to fill vacancies in the office of scrutineer arising from such removal or for any other cause.

14.3 Of the two (2) scrutineers appointed under this clause one shall always be a Holder present at the meeting, provided that such a Holder is available and willing to be appointed.

15 Manner of Poll and result thereof

The Chairman of the meeting shall have power to regulate the manner in which a poll shall be taken.

16 Voting in the case of joint holding

In the case of joint Holders the vote of the senior who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the votes of other joint Holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register.

17 Power to adjourn meeting

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

18 Casting Vote

In the case of equality of votes whether on a show of hands or a poll the Chairman of the meeting at which the show of hands takes place or at which the poll is demanded shall be entitled to a second or casting vote in addition to the votes to which he may be entitled as or on behalf of a Holder.

19 Proceedings and Demand for Poll

The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which a poll has been demanded.

20 Chairman to be sole judge

The Chairman of any meeting shall be the sole judge of the validity of every vote tendered at such meeting, and the Chairman present at the taking of a poll shall be the sole judge of the validity of every vote tendered at such poll.


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21 Power of General Meeting

A meeting of the Holders shall inter alia have the following powers exercisable by Special Resolution:-

(a) to sanction the release of the State from all or any part of the Principal Amount and Coupon

owing upon the Debt Securities;

(b) to sanction any modification or compromise or any agreements in respect of the rights of the Holders against the State whether such rights shall arise under these presents or a Bond Certificate or otherwise;

(c) to assent to any modification of the provisions contained in this Deed proposed or agreed by the

State;

(d) to give any sanction, direction or request which under any of the provisions of these presents is required to be given by Special Resolution;

(e) to authorise and empower the Trustees to concur in and execute and do all such deeds,

instruments, acts and things as may be necessary to carry out and give effect to any Special Resolution;

(f) to give any release to the Trustees in respect of anything done or omitted to be done by the

Trustees hereunder before the giving of the release. 22 Resolution Binding

A resolution passed at a meeting of the Holders duly convened and held in accordance with these presents shall be binding upon all the Holders whether present or not present at such meeting, and each of the Holders shall be bound to give effect thereto accordingly, and the passing of any such resolution shall be conclusive evidence that the circumstances justify the passing thereof, the intention being that it shall rest with the meeting to determine without appeal whether or not the circumstances justify the passing of such resolution.

23 Minutes

Minutes of all resolutions and proceedings at such meeting as aforesaid shall be made and duly entered in the books to be provided from time to time for that purpose by the Trustees at the expense of the State, and every such minutes as aforesaid if purporting to be signed by the Chairman of the meeting at which such resolutions were passed or proceedings had or by the Chairman of the next succeeding meeting of the Holders shall be conclusive evidence of the matters therein contained, and until the contrary is proved every such meeting in respect of the proceedings in which minutes have been signed as aforesaid shall be deemed to have been duly held and convened, and all resolutions passed thereat or proceedings taken to have been duly passed and taken.

24 Resolution in Writing

A resolution in writing duly signed by 75% of the Holders for the time being Outstanding, shall be as effective for all purposes as a Special Resolution duly passed at a meeting of the Holders, Provided that the resolution was received by all the Holders entitled to receive notice of a meeting of Holders. Such resolution may be contained in one document or in several documents of identical form duly signed by or on behalf of all of the Holders.


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25 Multiple Series of Bonds

The following provisions shall apply where Outstanding Bonds belong to more than one Series: (a) a resolution which in the opinion of the Trustees affects only one Series of Bonds shall be deemed to

have been duly passed if passed at a separate meeting of the Holders of the Bonds of that Series;

(b) a resolution which in the opinion of the Trustees affects more than one Series of Bonds but does not give rise to a conflict of interest between the Holders of Bonds of one such Series and the Holders of Bonds of any other such Series shall be deemed to have been duly passed if passed at separate meetings of the Holders of the Bonds of each such Series or at a single meeting of the Holders of the Bonds of all such Series, as the Trustees shall in their absolute discretion determine;

(c) a resolution which in the opinion of the Trustees affects the Bonds of more than one Series and gives

rise to a conflict of interest between the Holders of Bonds of one such Series and the Holders of Bonds of any other such Series shall be deemed to have been duly passed if passed at separate meetings of the Holders of the Bonds of each such Series; and

(d) the preceding paragraphs of this Schedule shall be applied, mutatis mutandis as if references to the Bonds and Holders were to the Bonds of the relevant Series and to the Holders of such Bonds.

20. FORM OF SUPPLEMENTARY SHELF PROSPECTUS/ PRICING SUPPLEMENT

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RC 622258RC 622258

PRICING SUPPLEMENT/SUPPLEMENTARY SHELF PROSPECTUS

LAGOS STATE GOVERNMENT OF NIGERIA

N167,500,000,000 DEBT ISSUANCE PROGRAMME

N[xxxxxxx] [.]% Series [.] Bonds due [.] This Pricing Supplement/Supplementary Shelf Prospectus is issued by the Lagos State Government of Nigeria in connection with the issuance of Series [.] Bonds under the N167,500,000,000 Debt Issuance Programme established by the Lagos State Government of Nigeria (“the Issuer”). To the extent that there is any conflict or inconsistency between the contents of this Pricing Supplement/Supplementary Shelf Prospectus and the Shelf Prospectus, the provisions of this Pricing Supplement/Supplementary Shelf Prospectus shall prevail. This Pricing Supplement/Supplementary Shelf Prospectus may be used to offer and sell the Bonds only if accompanied by and read in conjunction with the Shelf Prospectus. Copies of the Shelf Prospectus can be obtained from the Issuing Houses/Book Runners.

The registration of the Shelf Prospectus and this Preliminary Pricing Supplement/Supplementary Shelf Prospectus shall not be taken to indicate that the Commission endorses or recommends the Securities or assumes responsibility for the correctness of any statements made or opinions or reports expressed either in the Shelf Prospectus or this Pricing Supplement/Supplementary Shelf Prospectus. No Securities will be allotted or issued on the basis of the Shelf Prospectus read together with this Pricing Supplement/Supplementary Shelf Prospectus later than two years after the date of the issue of the Shelf Prospectus. This Pricing Supplement/Supplementary Shelf Prospectus contains particulars in compliance with the requirements of the Commission for the purpose of giving information with regard to the Securities being issued hereunder (the “Series [.] Bonds” or “the Bonds”). The Issuer and Issuing Houses accept full responsibility for the accuracy of the information contained in this Pricing Supplement/Supplementary Shelf Prospectus. The Issuer declares that having taken reasonable care to ensure that such is the case, the information contained in this Pricing Supplement/Supplementary Shelf Prospectus is, to the best of its knowledge, in accordance with the facts and does not omit anything likely to affect the import of such information and that save as disclosed herein, no other significant new factor, material mistake or inaccuracy relating to the information included in the Shelf Prospectus has arisen or has been noted, as the case may be, since the publication of the Shelf Prospectus. The statements made in this paragraph are without prejudice to the provisions of Section 85 (1) of the Investment & Securities Act No. 29 2007 (Civil Liability for Mis-statements in Prospectus). Further, the material facts contained herein are true and accurate in all material respects and the Issuer confirms that, having made all reasonable enquiries, to the best of its knowledge and belief, there are no material facts, the omission of which would make any statement contained herein misleading or untrue.

LEAD ISSUING HOUSE/BOOK RUNNER

JOINT ISSUING HOUSES/ BOOK RUNNERS

Form of Supplementary Shelf Prospectus/ Pricing

Supplement

RC261272 RC 733583

RC672560 RC 125097


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This Pricing Supplement/Supplementary Shelf Prospectus is issued to provide details of the Series [.] Bond Issuance under the N167,500,000,000 Debt Issuance Programme being undertaken by the Lagos State Government of Nigeria (“Lagos State” or “the Issuer) and contains the specific terms of the Series [.] Bonds that are being issued hereunder. This Pricing Supplement/Supplementary Shelf Prospectus supplements the terms and conditions in, and incorporates by reference, the Shelf Prospectus dated [.], 2012 and all documents incorporated therein (“the Prospectus”), and must be read in conjunction with the Prospectus. The terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions set forth in the Prospectus. In the event of any inconsistency between the terms contained in the Pricing Supplement and the terms of the Prospectus, this Pricing Supplement will prevail for the purposes of the Series [.] Bonds. PRICING SUPPLEMENT /SUPPLEMENTARY SHELF PROSPECTUS

PROVISIONS RELATING TO INTEREST PAYABLE

19. Fixed Rate Bond Provision: Fixed Rate Bond

20. Interest Payment Date(s): [.] and [.] in each year

21. Fixed coupon amount:

N[.]per N1,000

22. Fixed Day Count Fraction: Actual number of days in a month/Actual number of days in a year

1. Issuer: Lagos State Government

2. Series Number: [.]

3. Specified Currency: Nigerian Naira

4. Aggregate Nominal Amount: N[.]

5. Issue Price: At Par, N1,000 (One Thousand Naira)

6. Gross Proceeds: N[.]

7. Net Proceeds: N[.]

8. Specified Denominations: N1,000 (One Thousand Naira)

9. Issue Date: [.]

10. Maturity Date: [.]

11. Interest Basis: Fixed Rate

12. Coupon: [.] %per annum

13. Redemption /Payment Basis: Redemption at Maturity

14. Use of Proceeds:

[.]

15. Issuer Rating:

[.]

16. Status of Bonds: Registered and Listed Bonds

17. Security Trust Structure: [.]

18. Listing: The Nigerian Stock Exchange

19.


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PROVISIONS RELATING TO REDEMPTION

23. Final redemption of each note: N 1,000.00

24. Gross redemption Amount: N[.]

GENERAL PROVISIONS APPLICABLE TO THE BONDS

25. Bonds Settlement: [.]

26. 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

27. Tax Consideration: The Bonds are exempt from taxation in Nigeria in accordance with the Companies Income Tax (Exemption of Bonds and Short Term Government Securities) Order 2011 and the Value Added Tax (Exemption of Proceeds of the Disposal of Government and Corporate Securities) Order 2011. Please refer to the section “Tax Considerations‟‟ on Page [.] of the Shelf Prospectus

28. Liquidity Status [.]

29. Early Redemption [.]

30. Purchase/Cancellation The State may at any time offer to purchase, beneficially, Bonds from any person. Any Bonds so purchased may be retained, sold or cancelled at the discretion of the State

DISTRIBUTION

31. Method of distribution: By way of a Book Build. The Issue Price/Coupon will be determined following the Bid Closing Date (the date on which the Book Runners stop accepting Bids for the Issue), at the conclusion of the Book Build

32. Names of Book Runners: Lead Book Runner/Arranger/Issuing House Chapel Hill Advisory Partners Limited (“Chapel Hill”) Joint Book Runners/Arrangers/Issuing Houses Afrinvest (West Africa) Limited Radix Capital Partners Limited Joint Issuing Houses FBN Capital Limited FCMB Capital Markets Limited Skye Financial Services Limited Stanbic IBTC Bank PLC Vetiva Capital Management Limited Zenith Capital Limited.


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33. Qualified Institutional Investors: The following Investors are permitted to participate in this transaction: Fund Managers, Pension Fund Administrators, Insurance Companies, Unit Trusts, Multilateral and Bi-Lateral Institutions, Registered and/or Verifiable Hedge Funds, Market Makers, Staff schemes, Trustees/Custodians and Stockbroking firms; High Net worth Individuals (i.e. individuals with a minimum net worth of N300 million) as stipulated by Rule 78(C)(2) of the Rules and Regulation of the Securities and Exchange Commission. Retail Investors are exempted from participating in this offer

34. Oversubscription In the event that the number of bidders at the highest acceptable yield exceeds the amount of Bonds available at that yield per tranche, the State may either increase the amount available up to 15% of the size of that particular tranche so that a minimum number of Bonds can be issued on a pro-rata basis to each successful bidder at that yield, or decrease the amount available so that no allocation of Bonds is made at that yield; provided however that where the State increases the amount available this will be subject to 15% of the oversubscription (or such amounts as permitted by the SEC).

OPERATIONAL INFORMATION

35. Date of delivery: [.]

36. Mode of delivery: E-allotment to CSCS Account

37. Registrar: First Registrars Nigeria Limited 38. Trustees: First Trustees Nigeria Limited

Skye Trustees Limited UBA Trustees Limited Union Trustees Limited

39. Other Parties: Lead Stockbrokers

Marina Securities Limited

Joint Stockbrokers Chapel Hill Denham Securities Limited Afrinvest ( West Africa) Limited Camry Securities Limited Clearview Investment Company Limited CSL Stockbrokers Limited Dominion Trust Limited Equity Capital Solutions Limited FBC Trust & Securities Limited FBN Securities Limited F&C Securities Limited FIS Securities Limited Greenwich Trust Limited GTB Asset Management Limited Profund Securities Limited PSI Securities Limited Pyramid Securities Limited Reward Investments Limited Security Swaps Limited Signet Investment & Securities Limited Stanbic IBTC Stockbrokers Limited


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WSTC Financial Services Limited Zenith Securities Limited

Receiving Banks Access Bank Plc Mainstreet Bank Limited Keystone Bank Limited Ecobank Nigeria Plc Fidelity Bank Plc First Bank of Nigeria Plc First City Monument Bank Plc Guaranty Trust Bank Plc Skye Bank Plc Sterling Bank Plc Stanbic IBTC Bank PLC Union Bank Plc UBA Plc Zenith Bank Plc

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