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NICON Insurance Faults Report On Senate Summon

NICON Insurance Limited has faulted a report on its invitation to the Senate over failure to remit pension fund to the Pension Transitional Arrangement Directorate

READ MORE: ESP survival fund: More payroll support payments, MSME grants to commence this week

According to a document made available to The Guardian, the insurance firm recalled the report, which claimed that the Senate had summoned the firm over failure to remit N17.4 billion pension fund to the Pension Transitional Arrangement Directorate (PTAD).

“The management of NICON Insurance said that they have not received any summons from the Senate Committee on Public Accounts and are, therefore, unaware of the existence of such summons as reported by the media.

“It is of great concern to management that NICON has been subjected to the court of public opinion on a matter in which we have discharged our duty as a responsible corporate citizen.

“To set the records straight, NICON transferred assets to PTAD under the leadership of Sharon Ikeazor in place of the legacy pension funds for over 50 agencies and parastatals of the Federal Government in June 2017.

“PTAD has all the title documents of the properties in its possession and has been collecting rent on them in the last four years. NICON is therefore not liable to PTAD for any pension funds,” it stated.

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Access Bank: Race for Continental Expansion

Access Bank Plc has intensified its cross-border expansion in order to take advantage of opportunities in the African Continental Free Trade Area, which has been described as a potential game-changer for the continent, writes Obinna Chima

READ ALSO: Growing real estate investment, input cost increase cement price

Inline with its expansion drive, Access Bank Plc last week entered into a definitive and binding agreement with ABC Holdings Limited to acquire 78.15 per cent shareholding in the African Banking Corporation of Botswana Limited (BancABC Botswana).

The transaction, which is subject to regulatory approvals and customary conditions precedent, is expected to close before the end of this quarter.

ABC Holdings is a subsidiary of London Stock Exchange listed group – Atlas Mara Limited.

The Nigerian bank disclosed this in a statement signed by its Company Secretary, Sunday Ekwochi.

Bostwana is renowned for its quality sovereign credit rating and stability. Access Bank’s market entry is expected to further solidify its strategy as, “a strong banking partner in key verticals across retail and corporate banking, including especially supporting trade in payments across southern Africa and Sub-Saharan Africa more broadly.”

Commenting on the deal, the Group Managing Director/Chief Executive Officer, Access Bank, Herbert Wigwe, said: “We remain committed to a disciplined and thoughtful expansion strategy in Africa, which we believe will create strong, sustainable returns for our shareholders and stakeholders at large, over the medium and long-term.

“The establishment of Access Bank through this acquisition in the Republic of Botswana will position the bank to deliver a more complete set of banking solutions to its clients active in and across the SADC and COMESA regions.

“This transaction complements our recent strategic growth acquisitions in South Africa, Zambia and Mozambique. We are building a bank of the future that Africans across Africa and the world would be proud of and look forward to welcoming the employees, customers and other stakeholders of BancABC Botswana to Access Bank.”

BancABC Botswana is the fifth largest bank in Botswana and is a very well-capitalised banking institution poised for growth and success in its local market. The bank has been perennially profitable, given an existing high-quality retail loan book with opportunities and scope for diversification and further expansion into corporate and SME lending.

Access Bank recently unfolded plans to expand to more African countries as part of a strategy to support trade and finance in the continent and take advantage of the newly formed African Continental Free Trade Area (AfCFTA).

According to Wigwe, across Africa, there is an opportunity for the bank to expand to high-potential markets, leveraging the benefits of AfCFTA.

He said AfCFTA, among other benefits, would expand intra-Africa trade and provide real opportunities for Africa.

He stated that the plan is for the bank to establish its presence in 22 African countries so as to diversify its earnings and take advantage of growth opportunities in the continent.

According to him, Africa has enormous potential and there are opportunities for an African bank that is well run, that understands compliance and has the capacity to support trade and the right technology infrastructure to support payments and remittances, without taking incremental risks.

“We believe that we are best positioned to basically do all of that. Our focus is to become an aggregator in Africa and we are building a global payment gateway and providing trade finance support and correspondent banking across the continent. We are focusing on the key markets.

“The approach would always be that in the country we wish to go to, that we have the right skills. We would not just be a drop in the country in which we are present, we would make sure that we have an impactful presence in each of the major countries in which we are present.

“In doing this, we are also mindful of the country we are going to so as to make sure that it is of benefit to the bank. As we do this, we are working with our friends and partners.

“We are diversifying our earnings away from volatile markets as well and we are orchestrating our operations from the global payments gateway and ensuring that using Access Bank UK, providing corresponding services from digital platforms, the overall profitability of our franchise,” he explained.

Commenting further, on AfCFTA, he said the bank would use its digital framework to benefit from the continental agreement.

“Coming to Nigeria, we think we need to continue to entrench ourselves in the local market because there is still so much work to be done.

“So, we are doing everything possible to satisfy our customers and also to ensure that our channels are adequately secured. We are also ensuring that our staff are very efficient,” the CEO said.

Since the commencement of the AfCFTA, analysts and stakeholders have expressed optimism about Nigerian banks’ readiness, saying the financial sector stands to benefit most from the continental agreement.

They noted that with most Tier-1 banks already operating in many African countries and are continually expanding, saying that would give them an edge over their counterparts in other African countries.

They added that with the increase in trade expected to spur economic activities and increased lending, many banks are already positioned to take advantage of AfCFTA.

The immediate past President of the Chartered Institute of Bankers (CIBN), Mr. Uche Olowu, said Nigerian banks with more trade will be in a better position to increase lending to the real sector which in turn will spur economic activities.

He said: “Banks are ready especially as banks have procured good lines that would support trading and supporting manufacturers, exporters, Nigerians products, which would thereby jumpstart economic activities.

“Nigerian banks are liquid and are prepared to lend out to those channels and outlets to serious manufacturers because it poses great opportunities for Nigerian banks and the Nigerian economy.

“Banks are there to intermediate and they have the information, data and all that it takes to support Nigerian businesses that are serious and credit worthy.”

Also, the President of Risk Management Association of Nigeria, (RIMAN) Mr. Magnus Nnoka, said Nigerian banks are well capitalised and have outlets across Africa which put them at an advantage.

Nnoka said: “We are amongst the most prepared country from the financial services point of view. Apart from a few banks in Egypt and South Africa, Nigerian banks are reasonably capitalised compared to other African countries.

“I think Nigerian banks, given their size today and given their track record, are prepared and positioned to attract partnerships that would also facilitate trade within the African block.”

On his part, the Head of Consulting, Agusto Consulting Limited, Mr. Jimi Ogbobine, said:

“In terms of the AfCFTA, the Nigerian banking industry is more prepared than banks from Ghana, Kenya and maybe it is the South African banks that can give them a challenge in terms of exploiting AfCFTA. But outside South African banks, Nigerian banks are the most prepared, especially when you are using footprints across the continents and for South Africa.”

In view of the opportunities that exist in the market, Access Bank recently disclosed plan to transit to a holding company (HoldCo) structure. The bank has received the Approval-in-Principle from the Central Bank of Nigeria for the restructuring and the HoldCo will consist of four subsidiaries in order to tap into the market opportunities that are available in the consumer lending market, electronic payments industry and retail insurance market.

Access Bank Group will consist of Nigeria, Africa and international subsidiaries, while the payments subsidiary will leverage the strong suite of the bank’s assets.

“Going into the fourth year of our four-year cyclical strategy, our focus remains on consolidating our retail momentum and expanding our African footprint in a sustainable manner,” Wigwe said.

In 2018, the bank launched its ‘Africa’s Gateway to the World’ campaign – a strategic initiative which aims to promote ‘access to finance’ in Africa and beyond. It started this campaign by leveraging technology to offer its consumers new products. An example was its partnership with Remita, which has offered PayDay loans to over five million external customers. The product was available on the web, through the bank’s USSD code, via ATMs, Access Mobile, WhatsApp Banking, and QuickBucks – its instant loan disbursal application.

Access Bank has also continued to strengthen its digital technology to propel both its sustainability targets and its African gateway strategic drive.

This was evident in the bank’s partnership with the Africa Fintech Foundry (AFF), aimed at nurturing the next generation of cutting-edge financial-technology firms.

Equally, Access Bank has been driving its revenue growth through retail expansion, which has grown consistently across all income lines, driven by a strong focus on consumer lending, payments and remittances, digitalisation of customer journeys, and customer acquisition at scale

It has also maintained strong capital levels despite investments for growth and has accumulated capital over time.

Its recently released financial statement for the year ended December 31, 2020, showed that despite a challenging economic and regulatory landscape, the bank beat analysts and stakeholders’ expectations.

In the period under review, the bank recorded gross earnings of N764.7 billion for the financial year ended December 31, 2020, which was a 15 per cent improvement from the N666.75 billion posted for the comparative period of 2019.

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Youth Benefit fg fund

246,000 Youths to Benefit from FG’s N75bn Youth Fund

There are indications that only about 246,000 Nigerian youths may eventually benefit from the Federal Government’s Nigeria Youth Investment Fund, NYIF, at end of the disbursement programe this year.

READ ALSO: AfCFTA Market Offers Nigeria $666.2bn Business Opportunities – Emefiele

The NYIF was part of the COVID-19 stimulus package of the Federal Government last year aimed at getting the economy rescued from the set-backs of the pandemic by engaging the young people in productive ventures.

So far only 41,000 out of over three million applicants has been covered and about N12.5 billion has been disbursed. The government intends to disburse N75 billion under the scheme before end of this year.

READ ALSO: Update on the Enugu Micro-credit Lending program

The beneficiaries received about N300,000 each but some of them were angry that the amount was far bellow their expectations and the purpose for which they needed the fund.

One of the beneficiaries told our correspondent that he was surprised that he got only N300,000 when he actually applied for N3.0 million, which he said was the cost of his poultry business expansion as contained in the business plan he submitted.

He lamented that the development would force him to continue looking for more funding which may delay his expansion while jeopardizing his loan repayment plans.

He also confirmed that a lot of his friends that applied did not succeed while a few that succeeded also got N300,000.

But the Ministry of Youth and Sports Development appears to be disappointed at some of the beneficiaries who condemned the amount they received as the scheme actually pegged maximum amount for individual beneficiaries at N250,000, meaning that over 20 percent enhancement was actually made.

In a statement earlier in the week the Ministry said the disbursement of the Fund is being done in phases.

A statement signed by the Director of Press explained that the ministry had received over three million applications for the initial N12.5billion made available.

It said at the current cap of N300,000 per beneficiary, only about 41,000 beneficiaries could be covered.

According to the ministry, it had limited the loans to the current amount so as to reach as many beneficiaries as possible.

The statement read in part, “The Ministry of Youth and Sports Development has been following with interest the reaction of some beneficiaries of the NYIF, particularly those expressing disappointment at the N300,000 cap on disbursement under the first tranche of N12.5billion.

“Firstly, the framework specified N250,000 as the maximum for individual and eligible businesses that are critical can access up toN3m subject to meeting key criteria set in the guideline and conditions.

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FG Zainab Ahmed

FG Admits Revenues Crashing, Says Nigeria Faces Hard Times

The Minister of Finance, Budget and National Planning, Zainab Ahmed, on Monday admitted that Nigeria’s economy was facing a difficult time, saying states must improve their internally generated revenues.

READ ALSO: FBNQuest Recommends Commercial Papers and Bonds as Stable Funding Sources for SMEs and Corporates

Ahmed, who stated this in an interview on a daily breakfast show on the Nigerian Television Authority, Good Morning Nigeria, stated that the money shared at the March  Federation Account Allocation Committee meeting was short of N50bn.

The minister was speaking on a controversy generated by a claim by the Edo State Governor, Godwin Obaseki, that the Central Bank of Nigeria printed N60bn in March to augment the money shared at March FAAC.

But the minister and the CBN Governor last week dismissed Obaseki’s claim.

In the interview on the NTA on Monday, the finance minister stated the country’s economy was stabilising from the recession, which the country exited a few months ago.

She, however, added, “These are very difficult challenging times because revenues are low and the demand for expenditures are very high understandably because we have to keep intervening to make sure the pandemic is contained as well as the economic impact it has caused.

“In our case in Nigeria, the crash of the crude oil prices really hit us very hard in terms of revenue. We have very low revenues, we have very high expenditures. What we have done so far is just to provide some stability to make sure salaries are paid, pensions are received every month;  that we send funds to the judiciary and the legislature; that we meet our debt service obligations.

“That’s what we are doing. It also means we have had to borrow more than we have planned before the COVID-19 started because we need to still continue to invest in infrastructure using our national budget. We borrowed to invest in key projects such as roads, rail, airports, seaports and several other investments that are required in health and in education and upgrading the social standards and quality of life of our people and Nigeria is not unique as several countries of the world went into recession.

“Almost every other country has had to borrow more than it planned. It means we expanded our economy deficit very fast in 2020. 2021 is a year that we see as the year of recovery.”

According to him, government hopes to achieve a growth of three percent in 2021, adding that some of the multilateral institutions are putting it at 2.5 percent.

She stated,  “It is a very difficult time. I can explain to you how difficult it is, not just for the Federal Government but also for the states. We see increasing reductions in our FAAC revenues; FAAC revenues are the revenues that we put together every month, that are collected from both oil and non-oil sectors from the collection of the NNPC (Nigerian National Petroleum Corporation) the FIRS (the Federal Inland Revenue Service) and all other revenues collection agencies.

“ So, FAAC reduces and whenever FAAC reduces, it is a very difficult situation and in the past one year, we have tried to fall back on some specific accounts that are meant to be saved; savings that when you have such a situation, you fall back on the resources and augment.

“So, we take funds based on Mr President’s approval either from Excess Crude or Stabilisation Account or in some cases, President approved for us to take funds from LNG (Liquefied Natural Gas) dividends. In the month of March, we had a shortfall of FAAC that was about N50bn; we didn’t have enough accrued in any of those accounts other than some N8.5bn that we took from exchange rate differential account so we added that and we ended up with the FAAC of N605bn.

“An average FAAC that is healthy for us is N650bn, so it means we had a shortfall of about N50bn. The states to be honest wanted us to go and borrow from the central bank to augment FAAC.”

She stated that advice by states was rejected, adding that the three levels of government were asked to manage what was available.

“So, it was very surprising when we had a sitting governor saying that the CBN had printed money for FAAC. That was very unfortunate because it was not true. The FAAC information is published so you can see the revenue contributed by each of the agency; that is what we shared.

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Refineries Record Deficit as NNPC Lifts $407.15m…

Refineries Record N5.4bn Deficit, As NNPC Lifts $407.15m Crude

Amidst controversy over the state of the nation’s refineries the latest report of the Nigerian National Petroleum Corporation, NNPC, has indicated that Nigeria’s three refineries guzzled a total of N5.86 billion in overhead expenses on zero output in the month December 2020 alone.

READ ALSO: Eight States To Benefit From FG’s Agro-Processing Zones Programme

This expenditure eventually resulted in operating deficit of N5.37 billion by the refineries, the report stated. The three refineries are those of Kaduna, Warri and Port Harcourt.

The Federal Government has awarded contract for rehabilitation of Port Harcourt refinery at a cost of USD1.5 billion, a figure considered by most industry experts as outrageously high while condemning the high cost of maintaining the offices in the refineries with zero output over the years.

According to the NNPC report “in December 2020, NNPC lifted 7,538,735 barrels of crude oil from the daily allocation for domestic utilization translating to an average volume of 243,185 barrels of oil per day.”

The report further stated that in order to meet domestic product supply requirement for the month of December 2020, the entire 7,538,735 barrels were processed under the Direct Sales-Direct Purchase, DSDP, scheme while no deliveries to the domestic refineries for processing, meaning no crude was processed by the country’s three refineries.

Meanwhile, the report said the total value of crude oil lifted on the account of Nigerian National Petroleum Corporation, NNPC, in December 2020 was $407.15 million latest report by the Corporation has shown.

NNPC in its Monthly Financial and Operations Report for January, 2021 said of the 12.16 million barrels lifted on its account in December 2020, 7.54 million barrels and 0.50 million barrels were for domestic and export markets respectively.

The report explained that at an average oil price of $50.78/barrel and exchange rate of N379/$, the domestic crude oil lifted by NNPC “is valued at $382.8 million or a Naira equivalent of N145.1 billion for the month of December 2020.

The remaining crude oil lifted for export was valued at $24.3 million at an average price of $48.92/barrel. The report added that from December 2019 to December 2020, a total volume of 708 million barrels of crude oil and condensate was lifted by all parties.

SOURCE

Cryptocurrency

Cryptocurrency Ban: Turkey, says risks are too big

Turkey bans Cryptocurrency payments, says risks are too big

The Turkish central bank banned the use of cryptocurrency as a form of payment from April 30, saying the level of anonymity behind the digital tokens brings the risk of “non-recoverable” losses.

READ ALSO: IMF warns against CBN fiscal deficit financing

The curbs also prohibit companies that handle payments and electronic fund transfers from processing transactions involving cryptocurrency platforms, according to a decree published in the official government gazette on Friday.

A lack of regulation, supervision mechanisms or central regulatory authority, combined with the potential for criminal activity and the high volatility of their market value, mean digital tokens entail “significant risks,” the central bank said in a statement on its website.

In March, the Treasury and Finance Ministry said it shared the “global concern” about the development of cryptocurrencies.

The ministry signaled it was working on regulations in cooperation with the central bank, the banking regulator and Turkey’s capital markets board.

Complaints from Turks mentioning cryptocurrencies soared by 8,616% in February from a year earlier, according to data from consumer forum Sikayetvar.

Source

Food inflation

Inflation rate hits 18.17%

Nigeria’s consumer price index, which measures the rate of increase in the price of goods and services, increased to 18.17 percent in March from 17.33 in February, according to an inflation report released by the National Bureau of Statistics on Thursday.

Food prices are surging on the back of lingering security challenges, festive induced demand and an acute dollar squeeze

READ ALSO: FG begins full commercialization of Federal Mortgage Bank

This implies that Nigerians spent more on purchasing goods and services in the month of March, compared to February.

The March figure is the highest since January 2017 when it climbed 18.72 percent.

“Nineteen straight months of rising inflation rate and momentum is not even slowing. Looks like we are going to break the 2017 record in Q2,” Omotola Abimbola, assistant vice president at Chapel Hill Nigeria tweeted on Thursday.

The NBS data also showed Nigeria’s food inflation is now at the highest in over 12 years. Food inflation increased by 1.16 percent, year on year, from 21.79 percent in February to 22.95 percent in March.

The rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, vegetable, fish, oils and fats and fruits.

The “All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce rose to 12.67percent in March 2021, up by 0.29percent when compared with 12.38percent recorded in February 2021.

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Obaseki

End current monetary rascality, Obaseki replies FG

What is fast becoming a forth and back between Edo State Governor Godwin Obaseki and the Federal Government continued on Thursday as the governor urged the FG to stop the act of deliberately ignoring the prevailing economic challenges in the country and take urgent steps to end the current financial rascality.

READ ALSO: LCCI Seeks National Asset Register For Debts

Obaseki, in a tweet via his official Twitter handle @GovernorObaseki titled “Our advice is that we stop playing the ostrich”, noted that he is not joining issues with the Federal Ministry of Finance but was only offering useful advice for the benefit of Nigeria.

The governor had recently expressed worry over the country’s penchant for borrowing, noting that the debt profile could rise to N16 trillion by the end of 2021.

He also claimed that the Federal Government printed additional N50 billion-N60 billion to top up the Federal Accounts Allocation Committee (FAAC) for states to share.

Zainab Ahmed, minister of finance, budget and national planning, on Wednesday, however, said it was untrue that the FG printed N60 billion in March to support federal allocations to states.

But responding via a tweet on Thursday, Obaseki, who stood by his claim, urged the minister of finance, budget and national planning to rally Nigerians to stem the obvious fiscal decline confronting the nation.

“We believe it is our duty to offer useful advice for the benefit of our country. Rather than play the ostrich, we urge the government to take urgent steps to end the current monetary rascality, so as to prevent the prevailing economic challenge from degenerating further,” Obaseki said.

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LCCI

LCCI Seeks National Asset Register For Debts

The Lagos Chamber of Commerce and Industry (LCCI) has sought a national asset register to document the specific projects that the debts are incurred for so as to ease the pressure of debt service on the budget.

READ ALSO: FDC Analysts Predict March Inflation To Hit 17.8%

“We note that the majority of Nigeria’s debts are not linked to assets or specific projects. As such, it is critical to create a national asset register, and have a coordinated mechanism in place for valuing and managing Nigerian assets”, noted LCCI President Toki Mabogunje

She faulted government’s penchant for issuing new debt to redeem maturing ones as not being an optimal debt management strategy.

“It is critically important to replace existing debts with asset-linked securities to reduce debt cost. This will ease the pressure of debt service on the budget,” Mabogunje said.

she said further that LCCI acknowledged the introduction of the electronic call-up system at Apapa and Tin Can ports, which is aimed at resolving the systemic gridlock crisis around the Apapa corridor caused by port congestion.
“This measure is a work-in-progress and may not alone provide a sustainable solution to numerous issues faced by economic agents at the ports.

“It is important for the Federal Government, Lagos State government, Nigerian Ports Authority (NPA), and other relevant stakeholders to address the internal issues within the ports including the terminal operators, custom processes and procedures, quality of cargo handling equipment, lack of credible framework for dispute resolution on import valuation and classification, presence of several government agencies with overlapping roles, serial extortions and racketeering; and other structural bottlenecks stifling the ease of doing business at the ports.

“The solution to this problem must be holistic and inclusive. It demands strong political will to bring discipline to the entire cargo clearing and export evacuation processes.

Despite the laudable initiative of the Electronic Call Up system and the initial successes recorded on its introduction, there seems to be a reversion to the old ways. Many importers and exporters are expressing severe frustrations,” she said.

The LCCI president asserted that to achieve an enabling investment environment for the advancement of the Nigerian economy and the good of all investors and economic players, right policy and regulatory framework are imperative,” Mabogunje concluded.

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Federal-Ministry-of-Finance-Budget-and-National-Planning-the-Minister-of-Finance-Zainab-Ahmed-min

Federal Government Denies Printing N60bn To Share In March

The Federal Government has debunkfed claims that it printed N60 billion to support federal allocations to states in March, describing the comment made by the Edo State Governor, Godwin Obaseki as untrue and saddening.

READ ALSO: Sell-offs in microfinance banks over recapitalisation

The Minister of Finance, Budget and National Planning, Zainab Ahmed explained that despite Obaseki’s worry that Nigeria is in ‘huge financial trouble’, the country’s debt profile is still within sustainable limits.

Recall that Edo State Governor was quoted as saying at the Edo transition committee stakeholders engagement last Saturday that, “When we got Federation Account Allocation Committee (FAAC) for March, the federal government printed additional N50 billion- N60 billion to top-up for us to share.

“This April, we will go to Abuja and share. By the end of this year, our total borrowings are going to be within N15 trillion-N16 trillion.”

But the Minister of Finance in a statement by Yunusa Tanko Abdullahi
Special Adviser, Media & Communications, maintains that what is distributed at the monthly FAA meetings were generated revenue from government institutions available to the public at the ministry’s website.

Ahmed said: “The issue that was raised by the Edo State Governor for me is very, very sad because it is not a fact.

“What we distribute at FAAC is a revenue that is generated and in fact, distribution of revenue is a public information. We publish revenue generated by Federal Inland Revenue Service (FIRS), the Nigerian Customs Service (NCS) and the Nigerian National Petroleum Corporation (NNPC), and we distribute at FAAC.

“So, it is not true to say we printed money to distribute at FAAC; it is not true. On the issue of borrowing, the Nigerian debt is still within a sustainable limit.

What we need to do, as I have said several times, is to improve our revenue to enhance our capacity to service not only our debt, but to also service the needs of running government on day-to-day basis. So our debt currently at about 23 percent to GDP is at a very sustainable level if you look at all the reports that you see from multilateral institutions,” Ahmed concluded.

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