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The Economic Partnership Agreements and the Central African Region: Challenges and Prospects – Chofor Che, Published by Africanliberty.org, 12 August 2014


Economic Partnership Agreements (EPAs)are special agreements to put in place a free trade area(FTA) between the African, Caribbean and Pacific Group of States (ACP)and the European Union(EU). According to Wikipedia, the Free Encyclopedia, EPAS are an answer to ongoing criticism that the discriminating and non-reciprocal preferential trade agreementspresented to Africa especially by the EU are not in line with rules of the World Trade Organisation (WTO). The EPAs are a major component of the Cotonou Agreement, the most current in the history of ACP-EU Development Cooperationand were supposed to go operational in 2008.

The Central African Region is one region of interest to the EU. The EU is presently in negotiations for an EPA withCameroon. Cameroon and the EU agreed on an interim Economic Partnership Agreementin 2007. According to a report in Jeune Afrique dated the 11 of July 2014, this agreement was adopted by the European Parliament in June 2013 and ratified by Cameroon in July 2014. According to the European Commission this agreement is supposed to furnish duty-free, quota-free EU access for all goods from Cameroon to Europe. This agreement is supposed to also gradually eradicate duties and quotas over 15 years on 80% of EU exports to Cameroon. Apart from trade in goods, the interim agreement also focuses on institutional issues, dispute settlement and aid for trade. The European Commission adds that the EPA also includes “rendezvous” clauses giving room for additional negotiations on other trade-related matters such as intellectual property and competition policy.

Cameroon is not the only country in the Central African region the EU is interested in. The EU is equally interested in establishing EPAS with Chad, the Central African Republic, Congo, Equatorial Guinea, Sao Tome and Principe, the Democratic Republic of Congo, and Gabon. Congo (Brazzaville) and Gabon are yet to sign EPAs with the EU. According to the World Bank, Congo does business with the EU under the EU’s Generalised Scheme of Preferences, as an upper-middle income state. Gabon is no longer qualified for the new Generalised Scheme of Preferences scheme as of 1 January 2014.

The European Commission adds that as Least-Developed Countries, the Central African Republic, Chad, the Democratic Republic of Congo, Equatorial Guinea and São Tomé all benefit from duty-free, quota-free EU access under the EU’s “Everything but Arms” scheme.

There is no gainsaying that regional integration remains a great hurdle for the economies in the Central African region. Compared to other regional groupings like the Economic Community of West African States, the Southern African Development Community, the East African Community, the Caribbean Community + Dominican Republic (CARIFORUM)and the Pacificregion, the Economic Community for Central African States (ECCAS) remains the weakest. Part of the reason for this melee is because of poor governance, the non encouragement of interstate trade within the region and porous economic policies such as double taxation.

The European Commission concurs that imports from the EU into the Central African region are dominated by vehicles, pharmaceutical products, machinery, equipment, mechanical appliances, foodstuffs. Still according to the European Commission, oil dominates (70%) of exports to the EU from the Central African states. The only state in the region that does not export oil to the EU is the Central African Republic. Other major exports from Central African states are wood, copper, bananas, diamonds and cocoa.

The ongoing negotiations for comprehensive EPAS between Central Africa and the EU are laudable, but there remain serious challenges especially at the level of individual states. In the aforementioned report by Jeune Afrique dated the 11 of July 2014, Protais Ayangma Amang, a Cameroonian activist argues that there is no fiscal compensation envisaged in the eventuality of financial losses on the part of the Cameroonian government. The government of Cameroon estimates a loss of about 1500 billion Frs. CFA (2, 3 billion Euros) in 2020 and around 2500 billion CFA Frs. (3, 8 billion Euros) by 2030. This will be a great destabilizing factor for markets within the national territory.

It is thus clear that there is need for fair trade negotiations to be arrived at by the EU and Central African states. In as much as Central African states demand for fair trade conditions, it is also germane for issues like corruption and heavy taxes to be revisited in the region. Central African states thus need to reform their governance systems so as to better benefit from EPA agreements.
– See more at: http://www.africanliberty.org/content/economic-partnership-agreements-and-central-african-region-challenges-and-prospects-chofor-c#sthash.pSagHItM.dpuf

 
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Posted by on August 14, 2014 in Africa Development

 

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Concretizing The Peace Deal In The Central African Republic – Chofor Che , Published by Africanliberty.org, 4 August 2014


On the 24th of July 2014, France 24 reported that various armed groups met on Wednesday in Congo Brazzaville and agreed on a ceasefire. Over 170 Central African officials also took part in these talks, including members of transitional President Catherine Samba-Panza’s government, lawmakers, members of political parties and civil society. France 24 added that there has still been no agreement on important issues such as disarmament.

This very vital peace deal gives the Central African Republic (CAR) an opportunity to remain united and puts aside an envisaged division along religious lines of the war torn state between the Christian south and the Muslim north. The head of the Seleka delegation, Mohamed Moussa Dhaffane, reportedly, had earlier on demanded that a power-sharing deal was a precondition to any peace settlement. Guy-Herve Gbangolo, a representative of the Democratic Front of the Central African People, a militia group operating in western Central African Republic said such a demand by Seleka group was an aberration to a concrete peace deal.

This three-day meeting chaired by Congo’s President Denis Sassou Nguesso and supported by representatives of over 30 states was meant to resolve a calamity in the Central African Republic that has led to the death of thousands of civilians and produced more than a million refugees.

According to France 24, even as talks were going on Monday the 21st of July 2014 in Brazzaville, more violence broke out in the capital of the Central African Republic, Bangui. This fresh violence led to the death of a former Seleka rebel and sparked new attacks from the anti-Balaka militias.

The Central African Republic plunged into pandemonium in 2013 after the principally Muslim Seleka rebels took over power in a March 2013 coup d’état. This coup d’état was followed by looting, killing and raping between Muslims and Christians. The conflict indeed took the dimension of an inter-religious conflict. The United Nations warned the international community of an ‘ethno-religious cleansing’ in the conflict ridden state during an interview with FRANCE 24in February 2014.

It is important to applaud the efforts towards peace in the Central African Republic. All the same, Africans need to learn from the scenario of the Central African Republic which has led to thousands of deaths. One reason why we continue to have coups d’états in Africa is because regimes in place do not take the interests of individual rights seriously. Free markets are not promoted. Chronic bureaucracy and corruption remains the order of the day especially in states in the Central African region. State institutions such as the judiciaries remain weak and dependent on the executive branch of government.

States like the Central African Republic are very wealthy states but the populace keep on languishing in poverty. This is the reason why armed groups cannot sit back and see corrupt government officials plunder the state’s resources. It is thus vital that in ensuring that the peace deal succeeds, the interests of individuals should be taken into consideration. Free markets should be given a chance to strive in the Central African Republic. President Catherine Samba-Panza’s government needs to revamp the private sector and involve both the public and private sectors in policy formulation and implementation.

Disarmament is also crucial in ending the conflict in the Central African region. If both parties really want to end this conflict, then they have to seriously think about disarmament. If not the peace agreement will yield no fruits.

The African Union also needs to be serious about her role in curbing conflict on the continent.  For some time now this international body has received a lot of criticisms for not acting swiftly when a calamity befalls a member state. Why then should tax payers’ money be used for unimportant missions and conferences while Africans continue to die because of conflict? African leaders therefore have a lot to do in ensuring that peace reigns on the continent. We cannot continue to shove under the carpet real problems like youth unemployment and poverty which are serious contributing factors to conflict in Africa and at the same time talk about peace agreements.

A holistic approach which involves all and sundry is thus needed to curb conflict on the African continent such as the one in the Central African Republic. If such measures are taken into consideration especially by African leaders, then we can start envisaging peace in the Central African Region.

- See more at: http://www.africanliberty.org/content/concretizing-peace-deal-central-african-republic-chofor-che#sthash.wbXohwBf.dpuf

 
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Posted by on August 14, 2014 in Uncategorized

 

Lessons from the 2014 joint UN/AU Economic Report on Africa – By Chofor Che, published at AfricalLiberty.org, 23 July 2014


The 2014 Economic Report on Africa (the 2014 Report) was launched in Yaoundé on the 17 July 2014 under the patronage of Cameroon’s Minister of the Economy, Planning and Regional Development. Present at this launch were top ranking civil servants, economists, private sector actors, academics and members of the international community interested in investing in Africa in general and in Cameroon in particular. The report, published by the African Union Commission (AUC) and the United Nations Economic Commission for Africa (ECA) focuses on various case studies of states across the African continent, especially Africa’s failure to become adequately industrialized.

The 2014 Report is entitled ‘Dynamic Industrial Policy in Africa: Innovative Institutions, Effective Processes and Flexible Mechanisms.’ According to ECA, the title is a rational addition of the ideas propounded in past editions especially that of 2011 on the part the state has to play in economic transformation. The 2014 Report also pivots on the 2013 Report which focuses on linking Africa’s vast raw materials with industrialization.

According to the 2014 Report, poor industrialization in Africa is due to the fact that African states tend to blindly copy industrialization policies from other states especially states in the West. Other factors which have contributed to Africa’s erroneous industrialization image include a lack of collaboration with other actors especially the private sector and academia.

Apart from exposing Africa’s porous industrialization policies, the 2014 Report paints a positive image of other states in the South like Rwanda, South Africa and Nigeria that have made great strides towards industrialization. The 2014 Report also proposes institutional measures for adequate industrial policies in Africa especially the Central African region, which remains the least industrialized region on the continent. It calls on African states, taking into cognizance limited resources, to invest in adequate infrastructure that would accommodate serious demands of growing industrial sectors.

There is no gainsaying that Africa is in need of policies which reflect the local realities. Governments of States especially in the Central African region have vehemently refused to put in place industrialization policies which promote free markets. Countries like Cameroon, Chad, Equatorial Guinea, the Democratic Republic of Congo, Congo Brazzaville and Gabon continue to export raw materials which could easily be processed at home if these countries were adequately industrialized. The private sector in these states also remains underdeveloped, especially as available human resources remains inadequately trained. Heavy taxes also cripple industrial start ups especially in the Central African region. There are several Africans who have returned home in a bid to start up industries, but the porous industrial policies in place would not allow them flourish.

To make sure that growth is both beneficial and long lasting to all strata on the continent of Africa, states, especially states in the Central African region; need to put in place industrial policies that fit their own local contexts as suggested in the 2014 Report. State Constitutions need to put in place a firm legal foundation upon which adequate industrialization can grow. The constitutional basis for true industrialization then needs to be backed up with legislation grown from consultations with legislators, academics, senior civil servants and members of civil society. Apart from legal instruments, there is also a need for firm administrative and judicial institutions to have clearly defined mandates of formulating and pushing through such policies especially policies which promote free markets. It does not suffice to just have legal instruments and institutions in place. Those who are called upon to follow up on industrialization policies in Africa must be adequately trained with state of the art skills.

A canker worm eating into the fabric of the already poor industrialization image in Africa is corruption. African States need to work extra hard to stamp out corruption especially with respect to industrialization.

If such measures are put in place by state actors in collaboration with the private sector, then Africa may boast of adequate industrialization by 2065. If not, then reports such as the 2014 Report may remain a waste of time and tax payers’ money.
– See more at: http://www.africanliberty.org/content/lessons-2014-joint-unau-economic-report-africa-chofor-che#sthash.WGdIEogP.dpuf

 
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Posted by on July 24, 2014 in Africa Development

 

Aid to Africa: donations from west mask ‘$60bn looting’ of continent, Mark Anderson, theguardian.com, Tuesday 15 July 2014 11.57 BST


UK and wealthy states revel in their generosity while allowing their companies to plunder Africa’s resources, say NGOs.

Western countries are using aid to Africa as a smokescreen to hide the “sustained looting” of the continent as it loses nearly $60bn a year through tax evasion, climate change mitigation, and the flight of profits earned by foreign multinational companies, a group of NGOs has claimed.

Although sub-Saharan Africa receives $134bn each year in loans, foreign investment and development aid, research released on Tuesday by a group of UK and Africa-based NGOs suggests that $192bn leaves the region, leaving a $58bn shortfall.

The report says that while western countries send about $30bn in development aid to Africa every year, more than six times that amount leaves the continent, “mainly to the same countries providing that aid”.

The perception that such aid is helping African countries “has facilitated a perverse reality in which the UK and other wealthy governments celebrate their generosity whilst simultaneously assisting their companies to drain Africa’s resources”, the report claims. It points out that foreign multinational companies siphon $46bn out of sub-Saharan Africa each year, while $35bn is moved from Africa into tax havens around the world annually.

The study, which also notes that African governments spend $21bn a year on debt repayments, calls for the aid system to be overhauled and made more open.

It says aid sent in the form of loans serves only to contribute to the continent’s debt crisis, and recommends that donors should use transparent contracts to ensure development assistance grants can be properly scrutinised by the recipient country’s parliament.

“The common understanding is that the UK ‘helps’ Africa through aid, but in reality this serves as a smokescreen for the billions taken out,” said Martin Drewry, director of Health Poverty Action, one of the NGOs behind the report. “Let’s use more accurate language. It’s sustained looting – the opposite of generous giving – and we should recognise that the City of London is at the heart of the global financial system that facilitates this.”

Research by Global Financial Integrity shows Africa’s illicit outflows were nearly 50% higher than the average for the global south from 2002-11. The UK-based NGO ActionAid issued a report last year (pdf) that claimed half of large corporate investment in the global south transited through a tax haven.

Supporting regulatory reforms would empower African governments “to control the operations of investing foreign companies”, the report says, adding: “Countries must support efforts under way in the United Nations to draw up a binding international agreement on transnational corporations to protect human rights.”

But NGOs must also change, according to Drewry: “We need to move beyond our focus on aid levels and communicate the bigger truth – exposing the real relationship between rich and poor, and holding leaders to account.”

The report was authored by 13 UK and Africa-based NGOs, including: Health Poverty Action, Jubilee Debt Campaign, World Development Movement, African Forum and Network on Debt and Development, Friends of the Earth Africa, Tax Justice Network, People’s Health Movement Kenya, Zimbabwe and UK, War on Want, Community Working Group on Health Zimbabwe, Medact, Healthworkers4All, Friends of the Earth South Africa, JA!Justiça Ambiental/Friends of the Earth Mozambique.

Sarah-Jayne Clifton, director of Jubilee Debt Campaign, said: “Tackling inequality between Africa and the rest of the world means tackling the root causes of its debt dependency, its loss of government revenue by tax dodging, and the other ways the continent is being plundered. Here in the UK we can start with our role as a major global financial centre and network of tax havens, complicit in siphoning money out of Africa.”

A UK government spokesman said: “The UK put tax and transparency at the heart of our G8 presidency last year and we are actively working with the Organisation for Economic Co-operation and Development to ensure companies are paying the tax they should and helping developing countries collect the tax they are owed.”

 
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Posted by on July 16, 2014 in Africa Development

 

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Cameroon’s admittance to the status of a mixed financing nation by the African Development Bank is a bad omen to development, by Chofor Che


On the 9th of July 2014, an op-ed was published by Business in Cameroon revealing that Cameroon has been admitted to the status of a mixed financing nation by the African Development Bank (ADB). This position was corroborated by Cameroon’s Minister of Economy, Emmanuel Nganou Djoumessi. According to Business in Cameroon, this status allows Cameroon to continue to get loans at concessional rates from the African Development Fund (ADF), a subsidiary of the ADB. Cameroon can also have direct access to the national branch of this regional institution.

“The designation of this status by the ADB group shows that it recognises the efforts made by the country,” added Racine Kane, the ADB resident representative to Cameroon. “The ADB has allowed us to access the mixed financing regime. This was not done at our request. It was done in light of the strong assessment the ADB evaluators have done on our economy. This assessment established the soundness of our macro-economic criteria. It demonstrated that we have a low level of indebtedness and we are harnessing our resources. Consequently, we are a country with an emerging economy,” Minister Nganou Djoumessi added.

The ADB has dished out over 99 billion Fcfa to Cameroon to finance 91 projects, since 1972. The Minister of Economy confirmed that the ADB has loaned Cameroon over 255 billion Fcfa, for the month of July 2014 alone.

It is indeed, a shame to know that the government of Cameroon is happy with such a status. This is indeed a bad omen to development especially for a country which has decided to depend on loans from international financial institutions like the ADB. Of the 21 projects currently being financed in Cameroon by the ADB, just 23% are within the private sector. Many continue to argue that the private sector in Cameroon is weak. The truth is that government has not made adequate efforts to make the private sector in Cameroon an equal partner in development. Experience has also shown that financing which has been engineered by the government sector has been siphoned by corrupt government officials and most of this money starched illegally in foreign bank accounts.

Embracing the status of a mixed financing nation by the ADB will only make Cameroon poorer and underdeveloped. Rather than embracing such a status, policy actors tasked with reshaping Cameroon’s economy need to reflect more towards a free market economy rather than an economy that depends on loans from international financial institutions like the ADB. There is no gain saying that since 1972, after having received so much money from the ADB, the country has nothing to write home about. Infrastructure remains deplorable while youth unemployment is alarming. Cameroon needs to beef up the private sector. Taxes need to be reduced and more jobs in the private sector created. The educational system in the country has to also be revisited so as enable graduates to be ‘job creators’ rather than ‘job searchers’. These are some measures which if the government of Cameroon gives some attention to, then there will be no need to be contended about being a mixed financing nation of the ADB.

 
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Posted by on July 11, 2014 in Africa Development

 

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The 23rd Ordinary Summit of Heads of States and Governments of the African Union and African Monetary Fund exaggerated ambition, by Chofor Che, 7 July 2014


The 23rd Ordinary Summit of Heads of States and Governments of the African Union (AU) ended on Friday the 28th of June 2014 after two days of discussions in Malabo, Equatorial Guinea. In attendance were the Secretary General of the United Nations (UN), Ban Ki-moon, the Prime Minister of Spain, Mariano Rajoy and the Vice President of Cuba, Salvador Valdes Mesa.

The official theme of this summit was “Agriculture and Food Security in Africa”, but according to Alfredo Tjiurimo Hengari, a Senior Research Fellow at the South African Institute of International Affairs in an op-ed dated the 26 of June 2014, few if any of the decisions during the summit focused on farming or food. He added that this is evidence that summit themes are merely symbolic and are hardly followed by intensive discussions around the subject matter. This notwithstanding, certain sources argue that the 23rd Summit is historic because at the end of deliberations, though much did not focus on farming and food, a gigantic step was made towards the financial autonomy of Africa as a continent with the adoption of the Establishing Protocol and Statutes of the African Monetary Fund (AMF) one of the AU’s Financial institutions.

Founded in 2009, the AMF has as aim to contribute to the economic stability and the management of financial crisis in Africa, giving preference to macroeconomic development and business by promoting trade amongst states in Africa. It is expected to create a common market amongst African states by 2017. Having its sit based in Yaoundé, the political capital of Cameroon, this institution is supposed to forge for a single African currency in a bid to encourage rapid regional economic integration which for the moment remains a dilemma especially with the numerous currencies on the continent. Some analysts even argue that the multitude of currencies on the continent has grossly weakened business between African states.

The putting in place of the Establishing Protocol and Statutes of the AMF arrived at in Malabo on Friday the 28th of June 2014, does not in any way mean that the African continent will suddenly become financially independent. 15 African states need to ratify the statues for the institution to go operational. An organigram for the institution needs to be set up before the recruitment of staff including a Director General.

This is indeed an ambitious agenda my Heads of State who have decided to put the cart before the horse. Many African states are still plagued by precarious financial hurdles such as heavy taxes, trade barriers and corruption. In addition to these hurdles, the Central African Republic remains mired in armed and bloody conflict, Nigeria remains tortured by the activities of the notorious Boko Haram Sect and Kenya is still seeking solutions to the Al Shabab dilemma.

In addition to the various hurdles faced by various states on the continent, Africa is still not a force to reckon with in the United Nations (UN) Security Council. Hengari in his op-ed argues that in light of a meeting which took place in May 2014, UN Security Council reform agenda in the AU remains stalled due to the rigid proposals which propped up from the Ezulwini Consensus. Hengari argues further that concerning the current institutional setup, the AU remains state-centric. While the AU accepts regional economic communities as vital building blocks in regional integration, there is no serious formal institutional rendez-vous with the assembly or the commission.

It is high time for states to resolve domestic issues like barriers to trade, over taxation and corruption. African states need to open up their boarders for trade and not close up boarders under the pretext of fighting illegal immigration just as what has been transpiring between Equatorial Guinea, Cameroon and Gabon.

It is germane for Heads of State to try and resolve the ongoing conflicts on the continent including terrorists’ attacks from groups like Boko Haram and Al Shabab. It is important for the AU to equally engage heads of communities and officials within the frame work of the commission and assembly, especially in conflict resolution and regional integration.

Considering these suggestions is germane for the AU. If such proposals are not taken seriously then the AMF dream may be another waste of time and Africa’s tax payers’ money.

 

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“Equatorial Guinea Oil & Gas Report Q3 2014″ Now Available at Fast Market Research, By Digital Journal


Recently published research from Business Monitor International, “Equatorial Guinea Oil & Gas Report Q3 2014″, is now available at Fast Market Research

Boston, MA — (SBWIRE) — 06/03/2014 — BMI View: Although the start of a number of small fields and continued interest in West Africa’s deepwater are positive trends for Equatorial Guinea’s oil and gas se ctor, t he temporary recovery in oil production will g i ve way to gradual downtrend, placing the country’s heavily oil – dependent economy at risk. While new discoveries could support an expansion of the country’s LNG export capacity, uncertainty over the market and infrastructure has rendered investment decisions repeatedly delayed. Notwithstanding the possibility of new discoveries, we expect oil production to gradually head lower over the course of the decade.

View Full Report Details and Table of Contents

The key trends and developments in Equatorial Guinea’s oil and gas sector are:

- Since having peaked in 2005 at 375,477 barrels per day (b/d), oil production in Equatorial Guinea has failed to demonstrate strong enough recovery to permanently return to growth. While output fell to 297,000b/d in 2013, volumes have since managed notable gains on the back of the start of smaller fields offshore. We estimate production averaged 346,000b/d for 2013 and will continue to make incremental gains before peaking at 375,000b/d in 2015.
– The start of new fields like Carla and later Alen will deliver gains over the course of our forecast period, but in our view are not enough to sustain the recovery in production over the longer term. While we see some upside from prospects under appraisal, such as Noble Energy’s Diega and potential liquids from Ophir Energy’s gas-rich Block R, we do not believe development of these prospects alone will be able to offset falling volumes from currently producing fields. Beyond 2017, we anticipate a steady decline in production unless further investment is made in exploration and production (E&P) with new discoveries being brought online.
– Equatorial Guinea recently announced the awarding of a number of onshore and offshore blocks to small and mid-sized players. Traditional international oil companies (IOCs)…

The Equatorial Guinea Oil & Gas Report has been researched at source and features Business Monitor International (BMI)’s independent forecasts for Equatorial Guinea including major indicators for oil, gas and LNG, covering all major indicators including reserves, production, consumption, refining capacity, prices, export volumes and values. The report includes full analysis of industry trends and prospects, national and multinational companies and changes in the regulatory environment.

BMI’s Equatorial Guinea Oil & Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the Equatoguinean oil and gas industry.

About Fast Market Research
Fast Market Research is a leading distributor of market research and business information. Representing the world’s top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff is always available to help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.

Read more: http://www.digitaljournal.com/pr/1960568#ixzz34E3yOS9t

 
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Posted by on June 10, 2014 in Africa Development

 

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