 So let's just begin by talking a bit about what national security means today. The old conception of national security was solely focused on the protection of territorial integrity and national sovereignty by military means. That was the old concept of national security. So national security simply meant the absence of external or internal conflicts. So though that we were safe in terms of our physical security, that was official for national security. But today the field of national security scholarship has gone well beyond that, so that the idea of human security has taken center stage as a more holistic interpretation of the state's sovereign responsibility to guarantee the safety and well-being of its citizens. As noted in the United Nations General Assembly Resolution, another pro-election 66, slash 290. And it says that human security is an approach to assist member states in identifying and addressing widespread and cross-cutting challenges to the survival, to the livelihood and dignity of their people. So it calls for a people-oriented, comprehensive, context-specific and prevention-oriented response that strengthens the protection and empowerment of all people. So the very concept of national security now at the heart of it is human security. All of the issues around human security, around security of the individual are constitutions, the 1999 constitution also recognizes the principle of human security in the fundamental objectives and directive principles of state policy. And it says that I quote, the security and welfare of the people shall be the primary purpose of government. The security and welfare of the people shall be the primary purpose of government. So today, human security is national security. And we can't define national security outside of human security. So human security goes beyond absence of war and conflict. But it now goes to the availability of the means to live, food, shelter and livelihood, food, shelter, clothing and other means of livelihood. So clearly, the economy is central to human security because it is the economy that defines those parameters, food, shelter and clothing. Chief Bob Arthur Merwillow, who I'm sure many of us are familiar with, one time Premier of the Western Region of Nigeria, preferred a nexus between national development and human development. And we understand that in today's context as a principle of human security. And he had you, he said, one is therefore the prime mover in every economy. Without him, nothing at all can be produced. Is the determinant of all economic and social change and the generator of all impulses or problems. At all, he is at one, at the same time, the initiator, the innovator, the accelerator, the prime mover, the producer, the distributor, the exchanger and the consumer in every economy. So it should be crystal clear now to you and me and it goes on, that when we speak of underdevelopment of an economy, when it affects speaking of the underdevelopment of man. The characteristics of underdevelopment, Chief Bob Arthur Merwillow wrote and continued, Those characteristics are entirely and inseparably human. So whenever we talk about human development, whenever we talk about human security, which of course is essentially the same as human development, we are actually talking about the well-being of the individual, each and every individual. So man is central to the economy. If anything makes it difficult or impossible for him to function, the economy is weak and the whole progress of community or nation stop. So the national security community has also embraced that paradigm and the new paradigm, as I pointed out, from a traditional state-centric focus to a more comprehensive orientation towards human security. So the National Security Strategy now states that national security is inextricably linked with and inseparable from economic security. That national security is inextricably linked with humans and with economic security. We recognize, this is what the policy says, we recognize that Nigeria's greatest resource is its people and that the truest measure of our progress lies in the degree to which these people have access to opportunities for empowerment and self-actualization. Consequently, we will promote free enterprise, inclusive economic growth, and continue to aggressively pursue the diversification of the economy with emphasis on developing our human capital, end of photo. So there is a consensus, even in the security community, that human capital is at the very center of national security and of course at the very center of the national economy. So when we are talking about the national economy, we are actually talking about one of the same things, because when we are talking about human security and human development, the development of the individual is capacity to contribute to, first of all, to his own well-being and then is capacity to contribute to the well-being of society. So all of that is encapsulated in what we describe as today as national security. So there is no question of national security outside of the security of individuals. So having laid the theoretical foundation for what will be our inputs, we can proceed by noting amounts of that. Nigeria is currently the southern most populous nation on the face of the earth with an estimated population of somewhere about 200 million people. In 30 years, we will be the world's third most populous country after China and Asia. Nigeria is also a very young country. There are 90 million Nigerians under the age of 30, who of course as you know require education, jobs, healthcare and social infrastructure to put this figure in perspective if the population of the young people they know were imagined as a country of its own, then it will be Africa's second most populous nation. If just our young people alone were taken up, that would be Africa's second most populous nation. Just to give you a sense of size, and I'm going to keep making some comparisons with all the African countries in particular just so that we get a sense of the perspective of the enormity of the challenges that we are dealing with and what these visions may be. The main policy challenge which we have will be to shape our national security calculus both now and in the future to that of creating social and economic opportunities on a scale that not only matches our population growth rate but also the aspirations of our people, especially the young people. The sole objective of man is to live. To live in these food, shelter and clothing. To do so it must have the means to earn enough. Where the means are unavailable is natural instinct is to survive and of course that brings about desperation and alienation from society which makes it protection, a risk to the community as it must then devise a wish to survive or to react against the system that he feels has dehumanized him and for her as a case being by defining him or her of the means of surviving. This is why the presence of a large number of young, unemployed, working age population is a threat to national security. The correlation between high levels of unemployment and poverty and crime and conflict have been exhaustively documented and I don't need to go to any sorts of references. In the context of a large, multi-ethnic and multi-religious nation the availability of a young population that is not productively indeed provides food for extremists, for devlogs and a host of hostile non-steal actors. So it is clear that our current security challenges are both a cause and a consequence of socio-economic conditions and I say a cause, not the only cause, but a cause, a central cause. Improving human capital development, especially education and providing more opportunities for early delivery will reduce the number of young persons available for improvement into the ranks of both our armed and peaceful and chivalrous of that nature. In the Northeast, there are bandits and other criminals around the country. But the insurgency, banditry and other crimes are also hampered to economic activities and contrary to productivity of the Northeast and even in parts of the Northwest and North Central have been hampered by terrorism and banditry. And you take a look at some of the figures you see where those places, the sorts of productive levels that they were at before insurgency and after insurgency. And these are the worst-lethal situations where many are out of work because many of them are found. So unemployment itself, unemployment is both a cause and consequence of poverty. And the central question for us, I mean the central question for us and what I say for us again as a government is how to address the challenges of creating world and opportunity and how we are addressing the problems of poverty and unemployment. And because, as I said earlier, about least twice here at the National Defense Court examine the topic and there have elaborated considerably about details, about the state of the economy then and the steps they take. So I do not wish to repeat those competitions. So today I will focus on some of the latest actions and policies of government directed at creating an economic economy capable of providing decent livelihoods for our people. I will also speak to some of our thoughts and plans that are going forward. Economic policies are built onto broad crises. I say broad promises because these are very, very broad indeed. First is that the private sector and by that I mean the large, medium and small scale companies must be given all the support to create well jobs and opportunities. So the private sector is key because free enterprise is at the heart of our economic policy. Government must then provide the infrastructure and the enabling environment for this to happen. So I want to just note the very first point. Namely that the private sector is at the center that's large, medium, small scale companies. They are the center of our flow. They must be supported to provide the means by which many of our people get jobs. But in doing so, government's business is to provide infrastructure and the enabling environment for this to happen. Secondly, and this is the second premise upon which economic policies are based that before the private sector is able to provide sufficiently for the majority of people. It is the responsibility of government to provide safety nets for the extremely poor, the vulnerable and those who cannot work. This is the premise upon which our social investment policy is based. So there are two aspects. The first aspect is to say that our economy is to be private sectoral and enabled by government providing infrastructure. The second aspect is that there is still a large number of the poor and the vulnerable who cannot wait for the economy to provide the jobs that it needs to provide and their state intervention must pay part. That lower segment, that section of people, the poor are especially vulnerable to jeopardizing national security. And that's why it's important for government to make adequate decisions for that class of people. But I'm just going to talk again, as I said, right, about the idea of economy, about the kind of politicians, the policies that we're undertaking. Very recently, an article featured in the Newsweek magazine was entitled, the article in the title, Luck China, Africa's first superpower is coming sooner than you think. This was the visit. I think last week's edition of Newsweek. Africa's first superpower is coming sooner than you think. It was essentially an article of Nigeria and the prospects of Nigeria and were described as Africa's first superpower and that we are coming sooner than anybody in the country entirely. Of course, there are very many aspects of that. It's not necessarily one that traces the Nigerian economy or that which. But at least it points to a very significant point. The central point that is leading that at is that despite our challenges, Nigeria is the last open market on earth. And that like China and India, its population and economic size will enable economies of scale and attract international investment just by the shared size of the market. Just this week, last week now, this world group, an IT company from China, indicated that they're establishing a computer hardware manufacturing plant in Nigeria. The simple reason, of course, is because they see the market. And they see that that potential is huge. About 147 people have mobile phones or some other device, or some other computerized device. One 47 million people. Much earlier than this, in the course of last year, the Mara Group of Ashistata had also indicated that they will set up a manufacturing plant for mobile phones in Nigeria. Microsoft has also indicated that it will build its $100 million Africa Center here in Nigeria. But I don't think we're going to see why Nigeria remains an attractive destination for investments. Even the insufficient growth, and I want to also note that of 2.5% which is a current growth rate by the group predicted by the IM for the economy this year, 2020. Although our predictions are much better than that. But even that 2.5% growth rate that is predicted comes to about 10 billion US dollars. And it's bigger, or just about the size of some of the economies to which Nigeria is sometimes, in my view, erroneously compared. In other words, the scale of the Nigeria economy in African terms is such that our still relatively low growth is much bigger than several other economies on the continent. But doing that is that what happens here in Nigeria will fundamentally affect, first of all, our supply chain and then indeed the rest of Africa. If Nigeria gets onto the kind of economic growth levels that we expect, then it will certainly impact positively the economies of all African countries. It's easy to emphasize this point. And just to make the point clear, I'm just going to make a few comparisons just so that we'll put this in context. And of course, I'm aware that there are several of you who are also from different African countries just so as to understand the context of it. So let's take Rwanda, for example. Rwanda is a country whose economy has been growing at about between six and eight percent. And I believe it's an economy that is quite well-run. But to me, but Rwanda has a GDP of 8.7 billion dollars as of 2018. The federal capital territory where you are today has a GDP of 29.2 billion dollars. This is location ago. A quiet home state has a GDP of 14.2 billion. But it also has a GDP of 8.8 billion. Lagos state has a GDP of 90 billion. And the Delta state has a GDP of about 11.2 billion. So there are a number of states in Nigeria whose economies are much larger than the Rwanda economy. Ten states like this. That just gives you a sense of what we're talking about. Lagos state with 90 billion GDP compared, for example, to Ghana. Ghana has a GDP of 65.5 billion. So Lagos state has a much bigger GDP than Ghana, the whole of Ghana. So that gives us a sense of the size of the economy that we're dealing with, a size of even the challenges, especially in terms of population. So you cannot compare the issues, economic issues, the socioeconomic issues in the country of 200 million to the country of 24 million or 14 million or 5 million. There are huge differences. So I found that in making comparisons, we are also sometimes better off. And this helps us to understand better what to do and how to do. We're better off looking at countries that have the sorts of challenges and attributes we have in terms of size and diversity. So some of the comparisons that we make in formulating economic policy were actually comparing ourselves with India, which, of course, as you know, has a huge population, with Brazil, with China. These type of economies with their diversity, especially India with its diversity, is a sort of economy that we find ourselves having to compare both in terms of private sector policy and economic policy about the private sector, as well as social investment, the safety net that we're providing for people. Another often overlooked point on the part of the, you know, in the Nigerian story, is the large diaspora that we are. Overseas gravitation is into Nigeria, who estimated that there are about 35 million from our diaspora. And this is from former South Israel, although some students of the Nigerian economy will say that it's as high as 40 billion dollars if informal flows are taken into account. So the potential of the Nigerian economy is huge and is being boosted by investments, not just from diaspora investment and the dispute investment, investments in agriculture, in manufacturing, in technology, and creative industries. The story of the increased rise production in Nigeria, for example, is well known. We have a production of party rise in 2019, which is estimated at about 7.3 million electric tons, compared to about 5 million electric tons in 2015, 2016. And it's important to point out that the production of party rise, if we were milling at the rate of production, we would be self-sufficient in price production by now. Or milling is behind in terms of that value check. And we've also worked quite hard on trying to get more investments into milling. That was, for example, as invested by a thousand milling machines to be located in parts of the Northwest and the Northeast. And several others, there are several other investors smaller in milling. And we very strongly that if we were able to ramp up our milling, we should completely eliminate invitation of rise, which at the moment anyway is about 2% of what we're used to it for. But there's still a fair amount of money, especially before the close of the borders. A little noted phenomenon also taking place, phenomenon taking place in agriculture, is the use of technology to attract funding into the sector. These programs, and there are about 17 of them at the last minute, enable a wide variety of people to invest in agriculture without actually owning or having to engage in farming or to manage farms. Now, given the huge investments in agriculture and the relative ease of investment through such platforms, we are bound to see a huge increase in investment in agriculture and subsequent increases in agricultural output across the value check. And I'm just a very brief example of some of these mechanisms for investing in agriculture. There are a few companies, and these are companies that are technology enabled formed by young Nigerians. There's a company called Friberg Greek, there's another called Farm Allied, and these are companies essentially that look for funds online from people who are interested in investing in farming. So if you're interested in farming, it will take your funds, guarantee dividends at the end of the second cycle. You can choose the farm, the particular location of the farm you want to invest in in their own portfolio, and you can then watch the progress of that farm and expect dividends from it. Quite a few, there are about three or four companies doing that very actively now, and they are now generating billions of nair into their cultural industry. And these are, as I said, in just technology enabled investment platforms. Of course, in order to enable them, government policy is crucial, which is why we have the payment systems, the new licenses for payment systems that will allow the central bank now to mix these kinds of payment systems and investment platforms. And we have to be proactive in doing so in order to encourage more platforms to be able to invest in agriculture. When you look today at the manufacturing purchasing managers index, this is just how you get a feel for activities in the manufacturing sector and the output for the future. It stood at about 60.8 index points in December of 2019, which was the highest level which has been in about three years. So there is obviously an optic in manufacturing, but half of what's significant is the fact that all component parts of the index show an optic, inventory, employment levels, supply deliveries, new orders, production levels, all of it reported positive looks. Now this might be imperceptible in the overall economy because it may attract, but it's clear that there is far more attention today being paid to manufacturing and processing than ever before. And this is obvious from the figures. So the positive outlook for manufacturing sector can be seen from, for example, the level which is good, which continues to make substantial investments in the manufacturing sector through subsidiaries, the Nigerian admin company, and etc. Nigerian admin company, for example, will soon commission its new plans in Nigeria, which has taken a substantial part of a recent $500 million investment in Nigeria. Now, DeltaGas, which makes it possible for the pharmaceutical sector and for beverages like hookah, cola, and stabbing, has also invested another $30 million to expand its $30 million status, to expand its furthest capacity. The Nigerian technology sector continues to hold out great promise also. Recent reports show that Nigerian startups attracted $122 million out of the $492 million in funding African startups in 2019. But part of the more compelling is the increase in the use of e-payment channels within the economy. Multi-billion Naira companies founded by Nigerians, most of them under 30, are growing practically every day. And few examples, Pesca, South Congo, Mandat, Pharma Line, KKM, all of Africa, there are just literally hundreds of them today. All of them, telling about large amounts of money, taking a space that used to be unoccupied. A lot of banks, a lot of banks, of course are used to their traditional banking systems. But what in all of these young men and women are doing is that they're able to transfer large amounts of money quickly and without much charge to various parts of the country and to the unregistered parts of the country. Many of them are building platforms. For example, when we started our NPR program, my NPR program is our jobs program for young people where we engage so far 500,000 young men and women under the MSK. Now to recruit these young men and women, we needed a platform where people would apply, where these young people would apply. And we got in this one, a Nigerian company called Sophtom, young, very young people, as I said, who put together this very robust platform. And this is the sort of platform that takes, when the platform is open, almost four to five million applications. And not just the applications, it processes the applications, they conduct a test on those applications and then we make payments through those platforms to over 500,000 people, practically every time. And the same is true. We also built the platform. These are all local entrepreneurs. Building the platforms for micro-credit loans to two million traders in Nigeria. These platforms, the payments, the collections, the repayments, all of that are done through those platforms. And they're all technology platforms built by Nigerians. The value of point-of-sale transactions is reported to have reached 3.2 trillion Naira in 2019, as compared to about 2.3 in 2011, an increase of 38%, while the volume also increased by one 53 million transactions to a total of 438 transactions in 2019. Now POS transactions are also a way of knowing what consumers are doing, what's going on, how many transactions are going on, and how many of these transactions, and these are recorded transactions on POS. So with the registration of payment service banks and the increase in the minimum level at which stamp duty is payable, of course, I'm sure you are aware that stamp duty is payable now on sums in excess of 10,000 Naira, 10,000 Naira and above. It used to be 1,000, but now stamp duty is only payable from 10,000 Naira and above. So we are set to see quantum leaps in the use of electronic transactions with their attendant positive effect on the economy. Our creative industry and tourism are also a source of encouragement about our economic prospects, the quality of such offerings from our film and entertainment industry. Nollywood has films like Wedding Party, Wedding Party 2, Chief Daddy, King of Boys, I'm sure all of you guys are far too busy to watch any of these movies, but these are made in Nigeria movies, grossing large amounts of money at the box office all over the world, attracting large audiences and reaping huge rewards. In terms of quantity, Nollywood is the second largest film industry in the world, producing about 50 movies a week. Second to India, it is true that the quality of such offerings has improved greatly. So what do these stories tell us? All of these stories about economic activity and all that. They are indicators of the emergence of a post-All Nigerian in which sustainable prosperity will be hinged on our people's capacity for invention and ingenuity. The definition of Nigeria as a nation that is all about oil is now gradually expiring because as we see productivity which is key to any economy, as we see productivity, as we see productive enterprise as opposed to just rent seeking or just extraction, we are seeing the growth of a real economy, an economy that can blossom and give thousands of jobs that are required and in fact the millions of jobs that are required in our country. Now one of the major challenges in growing our economy is maintaining an environment favorable to business and the problems of low revenues. I don't want to go into all the litany of complaints about difficulties of doing business in our environment but I'll probably just come to that very briefly. The other problem is low revenues. In other words, we're generating low revenues as a government. Now our budget this year is 10.6 trillion. Last year it was about 8.9 trillion, that's Naira. The aggregate revenue that is the aggregate of all our revenues estimated will be about 8.4 trillion with a shortfall estimated about 2.2 trillion. So we're not making enough to fund the budget and that means of course that we have to borrow. We have to borrow especially to fund our capital projects. The sources of our revenues as you know are all proceeds and taxes. But they are the same. The same problem with generating revenue that the national economy has. The states also have. So most states do not generate enough revenue in one year to pay their bills in one month. So for example, let's just take two, three examples. Adamauer State, its IGR is internally generated revenue was 6.2 billion. The annual internally generated revenue which means that it generates about 517 million Naira a month. But in 2018, Adamauer's expenditure was about 14.8 billion a month. So they generate 500 million a month and their budget is 14.8 billion. That is without federal allocation. I'm talking of what they're able to generate. Of course with federal allocation that comes quite a bit. But just in terms of what the states themselves are able to generate. Benio State, for example, its IGR was 11.2 billion in 2018. That's about just over 900 million a month. 900 million a month. But Benio State's expenditure in a month it comes to something in the order of about 14.9 billion. So it generates about 900 million and it spends about 14.9 billion. So you can see the huge gap. Ekiti State, its IGR was about 538 million Naira a month. That's what its IGR is. But its expenditure is 8.2 billion a month. So they generate about 500 odd million but then spend about 8.2 billion. So there's a huge deficit. It shows that both the federal government and the state governments are simply not collecting enough revenue. They're simply not collecting enough revenue. And so these revenues, of course, are badly needed. So let me just talk briefly then about the finance bill which tries to address some of the concerns that I've mentioned. The first, this finance bill is a new legislation. It's the first of its kind since 1999. And its government's fiscal response to some of the issues I've mentioned, the twin issues of generating enough revenue and also creating an environment for business to thrive. The act itself, that's the finance act, has two main purposes. The first is that it addresses the issue of domestic revenue mobilization. That's the issue of getting more tax. And Nigeria has often paraded, as I've pointed out, an abysmal record. Second, it contributes to improving the ease of doing business in Nigeria. So the two major objectives of the finance act, which the president just signed into law a couple of weeks ago, is first, to ensure generation of revenue and secondly, to create a better environment for doing business in Nigeria. Now everyone agrees that the engine of commerce in any economy are the small and medium scale businesses. So for us, one of the most important objectives of the finance act are the specific incentives for small businesses. The act exempts small businesses, small companies. Those are companies with a turnover of less than 25 million naira a year from paying any company's tax at all. So if a company generates, in terms of turnover, less than 25 million naira a year, it pays no taxes at all. It's exempted from taxes. Medium-sized companies with a turnover of between 25 million and 100 million a year will now pay companies income tax at a lower rate of 20% from the upside of 30%. Now that we're paying 20%. With this in place, the finance act has done a way with that whole conversant procedure also for computing minimum tax for companies under the company's tax and all of that, and replacing that with a simple base rate of 0.5%. For insurance companies, this is a sector that are complained of lack of growth. There's a bit of good news as well. Before the act, insurance companies were only allowed to carry forward losses for four years, even when companies in other sectors of the economy could carry their losses indefinitely. These are normally has now been removed. They can now carry their losses forward indefinitely, and there's also the special minimum tax for insurance companies has now been abolished so that in many senses, we expect to see a growth in the insurance industry because they are now to be treated as just any other company. And a lot of the restrictions on their growth have been removed by the act to ensure better revenues from dividends. And this is a very important point because dividends are, of course, a major source of revenue for individuals, a major source of availability of consumer spend. Now, what has happened now is that there are provisions in the act to mitigate the risk of double taxation of dividends. Before now, dividends that were paid out of retained earnings were liable to tax. Despite the fact that such earnings would usually have been subjected to tax already. So there was a double taxation situation ahead of the finance act. There's now no longer that. So you can't have a situation where if you retain earnings, your retained earnings are already taxed. Your retained earnings, your profits are already taxed. Today, you cannot, after taxing profit, you are no longer allowed to tax the dividends because it's already been taxed once. So a similar provision has also been made in respect of frank investment income and dividends paid out of exempted profits. In other words, these sources of income will no longer be at the risk of double taxation. And it's very important to bear in mind that these tweaks in policy, these tweaks in fiscal policy are crucial in releasing aspects of the economy that had been either under growing or simply not growing at all because as far as we're concerned, in order to create the jobs and the job opportunities that we know are necessary, we simply must ensure that the environment for companies to thrive, small companies, medium companies and large companies, that that environment is as friendly as possible. Another business friendly provision in the finance act is the granting of credits to companies for early filing of their tax returns. So if a company files its tax returns early, large companies, if you're a large company, you'll get a 1% tax credit, while medium-sized companies will get a 2% tax credit just for filing their tax returns early. Furthermore, in recognition of the special impetus required for infrastructure development, withholding tax rate on roads, bridges, buildings and power plant construction contracts is now reduced from 5% to 2.5%. So those who are in infrastructure contracts or who enter into infrastructure contracts, in the past they paid a 5% tax. Today that has been reduced by the act to 2.5%. So that infrastructure, building of houses, power, roads, rail, et cetera, is now much cheaper and of course brings more profit to those who are involved as contractors. Now let's talk about increasing government revenues. Is already well known, and of course it's, the reason, and I need to just explain this quickly, of course you know the reason why government revenues are important, is first of all because of infrastructure investment but also in order to satisfy the second premise of our economy, which is the provision of a social investment program. So government revenues are crucial for two of those reasons. Now it's a well known fact that Nigeria's debt to GDP ratio has always been very low. Indeed is one of the lowest in the world. This has by itself seriously hampered economic growth and limited the delivery of public amenities and these are essential preconditions for attracting investment. The OECD's revenue statistics in their recent report, the 2019 report puts Nigeria's tax to GDP as somewhere in the order of about 6%. Which considering the levels of economic activity is so low as to constitute a negative factor as a serious drawback for the entire system. This is more so considering that the average tax to GDP ratio across 26 other African countries is 7.2% which is 11.5% points higher than Nigeria's. So Nigeria's were very, very poor tax to GDP ratio. Another area of revenue improvement therefore is in the value added tax rate. Now this also has been notoriously low. VAT rates is one of the lowest, in fact it is the lowest in Africa until this recent change. Ghana for example has a VAT rate currently of 12.5%. They recently reduced their VAT from 15% to 12.5%. Cameroon has a VAT rate of 19.2%. Egypt has a VAT rate of about 14%. South Africa about 15%. And Mexico somewhere in the order of about 16%. Our tax rate, VAT rate stood at 5%. Despite of course the increased activity in our midst. So that has been moved up to 7.5%. So the current VAT rate is 7.5% we expect to see an uptick in revenues. But the finance act has also ensured that the increase in VAT rate does not impact the poor or so become a disincentive for small businesses in particular. So there's a whole exempted class of basic food items. And that's very comprehensively defined in there. All food necessities are not taxable. And the new act also has 16 very clearly articulated classes of food, all exempted from tax. Similarly exempted services like drugs, locally manufactured sanitary towers, pads and tuition fees in all tiers of the educational system from nursery to primary. So there's no VAT on fees, no VAT on drugs and a wide range of medical products. Also as a palliative measure for micro and small enterprises, the VAT compliance threshold is now set at a turnover of 25 million naira. So if your company is recording a lower turnover than 25 million, you are not expected to register for that. So for small companies, they're exempted from tax, they're exempted, they're not obliged to register for VAT or render monthly returns for VAT. So that is the position with that. Also services rendered by microfinance banks are exempted from that. And the reason why that is so is because the microfinance banks were trying to push between the BOI and the microfinance banks for greater lending to the trading sectors and also to small businesses. And so we need to remove that to enable that to happen. And upside of the VAT rate increase, which was not filled to note, is that it will give the additional much needed revenue to state governments as well. And this is a very important point because of course we've raised minimum wage now to 30,000. Many states of course complain that they cannot pay that easily. So with the increase in VAT rates, we expect that the state's capacity to pay will be enhanced. And just to explain how tax, the VAT is shared, 50% of VAT goes to state governments, 35% goes to local governments and 15% comes to the federal government. So states obviously have the large share of VAT proceeds. And the rate will increase, the rate will increase of course when you look at their own IGRs as well and all that. Now governments need to focus, and many of our governments of course, need to keep their focus on entirely generated revenue. If you look at what happened, and there is absolutely no excuse, sometimes you hear about people talking about non-viable states. The reason why states are not generating as much as they should, is because there is something coming from the federal government every month. If there was nothing coming from the federal government, states will pull their weight. If the federal government itself did not have all revenues, we will pull our weight. If you look at what happened in the regions, the old regions, the northern region, the eastern region, the western region, all of these regions during that period, not only paid all of their bills from internally generated revenue, tax, agriculture, mostly. They paid all their bills. In western region, for example, they had free education, over a million pupils at one point in time. They built roads all over the place, and they were spending only 50% of what they generated and paying 50% to the federal government. And all they were relying on was essentially tax and agriculture, just tax. That's income tax of individuals and agriculture. Today, that's no longer the case. Very few states, very few states, including the federal government, are as aggressive in revenue generation. We're not as aggressive because whether we work or not, something will come from federal allocation. And that's why there is a need to ensure that we hold ourselves to account for revenue generation. This country, a country of this size, certainly can do far more than we're generating at the moment. So as I said earlier, it would enable governments to pay the new minimum wage so that they can play their key roles in the locational centers of economic activity. Let me also briefly mention the provisions on taxation of the digital economy and non-resident companies. It's a very important aspect of our taxation policy. Before the Finance Act, only companies that had a physical presence or a fixed base in Nigeria could be taxed. So most digital companies, so I mean any of the big technology companies and multinational technology companies do not have any physical presence in Nigeria. So they made significant income from Nigeria, from online activities, such as advertising, movie streaming, online gaming, e-commerce, from subscribers in Nigeria, but they paid no tax whatsoever because they did not have a physical base in Nigeria. So now we're no longer relying on the fixed base or physical address criteria. Under the new Act, once you have a significant economic presence in Nigeria, you are liable to tax. Whether you are resident here or you are not resident as your company, so long as your economic presence is significant, you are liable to tax. So if you are streaming online or if all the adverts, Google advert, this advert and all of that, whether you are resident here or not, you are now subjected to tax. So non-residents who previously had no fixed base or no Nigerian tax liability will now be tax-based on the significant economic presence criteria. So the minister, that's the minister of finance, has been empowered to issue a regulation defining what significant economic presence means. So she just defines the scope what we will be looking out for in terms of significant economic presence. I think it's also important to note what the CBN has been doing to improve credit flow to the private sector. Now it's very important to understand also the monetary policy issues because the monetary policy issues determine what credit goes to the private sector. And as I mentioned earlier, the private sector is the focus of the economy. They are the job creators. So how do they get credit? And a major complaint of the private sector is that inability to access credit, cheap credit in particular, as a major complaint, everybody complains about access to credit. Now, the only way business can grow, of course, as I pointed out, is loans to the real sector. But now on account of the reform of the OMO operations, that's the open market operations of the central bank, we now have a situation where interest rates have become much lower. Now, also the loan to deposit rate is now 65%, but interest rates have become much lower. And the interest rates, especially for fixed bills, for the treasury bills, et cetera, is now much lower. So you are looking at something in the order of between three and 6% or so for treasury bills, where it used to be 14%. Now, because of the lowering of the interest rates, and the ban on Nigerian companies and banks and individuals investing in treasury bills, it is now apparent that they must now lend to the real sector. So because in the past, and I'm sure that many of us are familiar with this, in the past banks, individuals, simply invested in treasury bills. Because treasury bills, you could get 14%, 15%, even higher, right? Just by investing in treasury bills. So banks had no motivation whatsoever to lend to the private sector, because without any risk at all, they could earn anywhere from 14% upwards. But today, because they can no longer do so, they have the deposits, CRR is now at about 27.5, and because of that, they have enough resources to lend to the private sector. So they have cheaper funds with them, far cheaper funds. And it's very obvious from what we are seeing today that interest rates have dropped very sharply, and we are no longer going to have the rather excessive interest rates we used to have. But the target, of course, is to be able to bring interest rates to a single digit. That's the target. At the moment, only our development finance institutions as a BOI are able to offer those kinds of loans. So net domestic credit has increased by a little over 30%. And a further attempt to reduce the cost of doing business is, as I've said before, that reduction in fixed income yields, reduction in treasury bill rates. So government itself has an advantage. If you look at our debt burden today, most of our debt burden comes from servicing our debt. So we spend quite a bit of money servicing debt. Most of that debt is domestic debt. That means most of it is on paying back treasury bills. But when treasury bill rates were reduced to 5% to 6% from about 14%, it means that government itself pays far less to service its debts. So we're paying considerably less. So the offshoot of this is that government will no longer be paying double digit interest rates on treasury bills. And that reduces, as I've said, debt burden. And it means that rates repayable on commercial paper will also not be high so as to discourage investments. But I want to point out also the downside. The downside is that at the moment, current account balance is negative and there's a need to improve foreign portfolio investment. But with low exchange rates, there is, of course, low foreign exchange flows. So one of the things that we want to achieve is to get foreign exchange flows, especially portfolio investments, in order to be able to boost our reserves. But if the interest rates are low, it of course means that we're less attractive as a destination for portfolio investment. That has its good side, that has its bad side. But I choose to describe it as a downside because it means that we're going to see some reduction in foreign portfolio investments, at least in the short term. With the signing also of the deep offshore bill into law, we also expect enhanced revenues from the oil sector. So enhanced revenues from the oil sector, of course, is another way of generating income. I'm going to stop about now. I think I've spent close to 40 minutes. But what I hope we'll be able to achieve because I'm not done with the presentation, is that possibly when you're asking questions, are we able to devote a lot more time to social safety nets, to infrastructure development, et cetera? Well, Miwa, let me spare you so that you can at least gather yourselves and be able to ask some questions. Thank you very much. Thank you.