MALAWI CONGRESS PARTY (MCP)
RESPONSE TO THE 2017/18 MID YEAR BUDGET STATEMENT
HON. ALEXANDER MANDAALIZA KUSAMBA DZONZI – DOWA WEST–MP
MALAWI CONGRESS PARTY FINANCE SPOKESPERSON
Mr Speaker Sir and fellow Parliamentarians, on 24th December, 2017, a seven year old girl invited to celebrate Children’s Christmas Party organized by the first couple at Zomba State Lodge, asked the State President a simple question that we all have been too shy to ask. “Mr President, what can we do when we don’t have electricity”, asked the little girl. The State President is reported to have been caught off guard and his loss for a ready answer was confirmed by his admission that he did not expect such a question.
Mr Speaker Sir, with his hands firmly holding the podium table, the President regained his balance for his constitutional responsibility and responded as follows;
“First of all, electricity is a problem in Malawi right now because the water levels are too low to generate enough power and we are working on that one, but buy candles and paraffin lamps”.
That Mr Speaker Sir, was the response from the Malawi Head of State to the little girl’s question. It is a response that has prompted the 50 + 1 Malawians to speculate that may be what we have in this country is a candles and paraffin lamp government, incapable of thinking strategically. It is very strange to hear the State President admitting that he never thought that our kids would wish to know what he thinks about the blackouts. The question that remains unanswered is this one, how can candles and paraffin lamps run machines in our factories to produce commodities? Can a paraffin lamp or candles push machines at our maize silos in Kanengo to ensure that our maize does not get rotten? It is indeed tempting to conclude that all we have is a candles and paraffin lamps presidency Mr Speaker Sir. This means that Malawians still have unfinished business that of putting in the highest office of the land, a President who will fix the energy problems affecting this country so that our children will once again live in a country without power outages. This is possible if Malawians are determined to loudly say, not again shall the high court impose a President on us as it was done in 2014. This outsourced government has failed Malawians in almost every sector and must be allowed to get out and permanently step aside and watch how the art of running the affairs of the state is done.
Mr Speaker Sir, when the Minister of Finance presented his 2017/18 Budget on 19th May 2017, he told this august House that his budget was designed to be implemented within the context of international, regional and domestic economic developments. He further stated that the objective of the 2017/18 Fiscal Budget was to reduce domestic borrowing to eliminate excessive liquidity in the system in order to quarantine its ability of fuelling inflationary pressures this country has been subjected to since 1994. The truth that the Minister of Finance has failed to tell Malawians in his Mid-Year Budget Statement Mr Speaker Sir, was to admit that the Malawi economy is now worse than it was at the time he was presenting his 2017/18 Annual Budget. It is therefore the duty of the Malawi Congress Party to explain and confirm to Malawians that ‘our economy is in a much sorrier state now than it was some nine months ago’.
Mr Speaker Sir, before I take the whole house and Malawians out there, into areas which demonstrate the cluelessness in the manner this DPP led Government is running the economic affairs of the State, allow me on a personal note, to express my utmost sincere gratitude to the President of the Malawi Congress Party who is also the Leader of the Alternative Government seated behind me, the Rt. Hon. Dr. Lazarus Chakwera, M.P for entrusting me once again with this stately noble task of responding to the 2017/18 mid-year budget statement on behalf of the Mighty Malawi Congress Party (MCP). Allow me Mr. Speaker Sir, to further acknowledge the invaluable guidance, encouragement and mentorship that I always receive from the First Deputy President of MCP who happens to be you Sir, the Chairman of the whole House, the MCP Shadow Minister of Finance Hon Joseph Njobvuyalema-MP, colleagues and friends in the Malawi Congress Party too numerous to mention whose insights and pieces of advice have not only polished this response but have also put it into its proper context given the current economic realities. Due to the wide and open consultations made, allow me Mr Speaker Sir, to put on record that this speech fully represents the collective wisdom and vision of the Malawi Congress Party (MCP).
Mr. Speaker Sir, the success of every budget depends on the realism and foresight of its economic assumptions. It is therefore very important that the Minister of Finance and Malawians out there get reminded of what constituted the DPP led government 2017/18 Annual Budget economic assumptions.
1. Increase domestic resource mobilization to ensure that tax revenues grow in tandem with the growth in nominal GDP of 6.1%;
2. Ensure that the adequate resources are allocated for productive sectors, especially agriculture, energy and transport infrastructure;
3. Ensure that the wage bill is maintained below 8% of the nominal GDP while permitting the critical recruitment of frontline staff;
4. Ensure that resources allocated to the health, education and social sectors constitute a significant proportion of the budget.
Mr Speaker Sir, the Executive Arm of government together with its arsenal working at Capitol Hill and all departments spread throughout the country believed that if these assumptions are implemented our economy would have grown by 6.1% in the second half of calendar year 2017 and by 5% in the first half of calendar year 2018.
Nine months down on the line, there hasn’t been any meaningful growth for our economy Mr Speaker Sir. Infact our domestic revenues underperformed by K45.9 billion against its initial set projection of K478.0 billion. The resources which were set to be allocated to the productive sectors of agriculture, energy and transport infrastructure have been misdirected by our workers who self-turned themselves into our masters seated in front of me right now. And because of their fiscal mismanagement, we still have the black-outs today which have reduced the aggregate economic productivity. The fall army worms are still with us happily devouring our maize despite spending K2.0 billion with no evidence of success. Malawians have now come to accept as the order of the day to have drum holes riddling our roads making our roads not only impassable but also fashioning them into death traps for us all in here as well as those out there. And by his admission, Mr Speaker Sir, the Minister of Finance and his DPP government have failed to keep the wage bill below the projected 8% of the nominal GDP growth of 6.1% in the first half under discussion despite freezing vital vacancies in government. The lamentation from the Minister of Finance that the increased wage bill of K5.0 billion and the Admarc K45.2 billion bail-out created obstacles to achieving the planned macroeconomic stability, remains absurd and senseless to most Malawians because the two singled out sins were committed in total disregard of the provisions of the 2017/18 Appropriations Act. Mr Speaker Sir, Malawi Congress Party can therefore not be expected to feel sorry for this Minister and be a party to the DPP’s incompetency in running the economic affairs of this country, especially when such incompetences are anchored on total breach of a glaring law, the 2017/18 Appropriations Act that was duly passed by this House and dutifully assented to by the State President His Excellency Prof. Arthur Peter Muthalika, a Lawyer himself.
Today Mr. Speaker Sir, the manufacturing sector, wholesale and retail sector, transport, construction as well as the storage sector have withered under this clueless government of His Excellency Prof Arthur Peter Muthalika. With a withering economy, it is therefore not surprising to see that our official public debt is now at K4.5 trillion which is way above acceptable limits. Mr. Speaker Sir, had this been an accounting class, I would have declared that Malawi is bankrupt as no organization survives a debt that is more than its balance sheet figures and remains an ongoing concern. We might as well speculate that what is happening in Malawi today is economic witchcraft of the highest level. It is disheartening to see that all the players in wholesale, retail, construction, farming as well as manufacturing businesses are owned by foreigners. This is a sign that we have no economy of our own, because what we have Mr. Speaker Sir, is an outsourced economy, very foreign and not ours.
The Malawi Congress Party therefore wishes to strongly advise the State President to quickly put his economic house in order and put a tight lid on his government’s uncontrollable borrowing appetite and invest the already borrowed monies into proven economically productive sectors.
MID-YEAR 2017-2018 BUDGET REVIEW STATEMENT
Mr Speaker Sir, Malawi Congress Party wishes to agree with the Hon Minister of Finance, that there is indeed no legal requirement for him to table before this House any Mid-Year Budget Review Statements. We therefore can only thank His Excellency, the State President Prof. Arthur Peter Muthalika for allowing his Minister of Finance to carry on with this important tradition that was started during late Bingu’s rule in 2005, may his soul continue resting in peace. This being the House of Laws and Traditions, it is our prayer and belief that this tradition which allows Malawians to have a half way peep into how the executive is managing the approved scarce resources will be allowed to live forever.
Mr. Speaker Sir, in his statement, the Minister of Finance continues admitting that like in the past, the current mid-year review was done with guidance and a watchful eye of the International Monetary Fund (IMF). The beauty about this Minister of Finance is that he is more often too honest and he has no business pretending that mid-year budget review is his creation or coming from the wishes and pleas from Malawians, No. It is now clearly evident Mr Speaker Sir that both the views of the Minister of Finance and Malawians directly or as represented here no longer count in the budgeting processes. This is why that in this Presidential Parliamentary System we adopted in 1994, the Minister of Finance is so powerful to the extent that he no longer listens to the plea of Malawians crying through their representatives here on how the resources must be distributed nationwide and managed.
Mr. Speaker Sir, the budget review by Hon Minister of Finance can be summarized as a mere cosmetic cover for the DPP led Government’s failure to plan properly and effectively; a continuation for more corrupt practices and a clear evidence of a government whose priorities are upside down. The Malawi Congress Party knows and appreciates the quality personnel that the Government has in some quarters. We are also aware that the main challenge to get the best out of our civil servants has always been the continuous political interference from the ranks of the ruling party which makes the basic plan like a budget this House approves always miss its targets. Therefore, the Minister’s assertion that the mid-year budget review will ensure the maintenance of the hard won macroeconomic stability and a rebounded economy is not just a mere false hope to Malawians but also a sign that DPP led government is incapable of being honest with the people it governs.
PROJECTS TO BE COMPLETED WITHIN THE 2017/18 FISCAL YEAR
Mr Speaker Sir, Malawi Congress Party would like to thank government for the commitment shown in singling out some fifteen projects out from a total of 85 projects to be completed within this current fiscal year. We believe that Malawians out there will be happy to see that the more than fifteen years old Zomba-Jali-Kamwendo-Phalombe-Chitakale road gets completed by 30th June 2018. The completion of Lumbadzi-Dowa-Chezi road, Mzuzu-Nkhatabay road as well as the Jenda-Embangweni-Edingeni road and many others will be good news to us all here. Malawi Congress Party however, would like to know as to why the completion of Malawi Rural Electrification Program-Phase 8 has been included on the projects list to be completed by 30th June 2018 yet there are no quantifiable resources allocated to the same. May the Hon Minister of Finance explain during his responding time as to what game is being played here bearing in mind that this is the only program that reaches every constituency in recognized by august house. Mr Speaker Sir, Malawi Congress Party would also like to see the Minister of Finance unbundling the projects earmarked for completion included in ‘Other Rural Projects’ under Annex IV by name and geographical location.
Mr Speaker Sir, MCP has however, noted with unhappiness that some projects under Annex IVB, Projects that should be started and implemented to a visible stage by 30th June 2018, some are appearing without any quantifiable resources attached to them for take-off. Of interest is the outspoken Kam’mwamba Coal Fired Power Plant whose resources will come from the Chinese Government and partly Malawi Government. Why has the Minister of Finance hidden from this house the monetary figures of this project? Given the continuous black outs and the expensive electricity from the Aggreko-Escom Generators Deal, can the Minister of Finance explain to Malawians the wisdom of pending the Kam’mwamba Coal Fired Power Plant to the God knows when. Mr Speaker Sir, MCP further finds it rather disturbing for the Minister of Finance to include the construction of Blantyre bypass road, the Dual Carriage way between Parliament round about to Bingu National Stadium and the Dual Carriage Way between Katoto round about to Mzuzu University whose funding sources are still under discussions and negotiations. We don’t another scenario where K55 billion from European Union was included in the 2017/18 budget figures no avail. We therefore wish to strongly warn government against over-committing itself on the undertakings it is likely to fail. Government must stop giving false hopes to Malawians and realize that Malawians will not fall again for another round of empty and broken promises as they go to elect a suitable government next year. We also find it extremely disturbing to note that the Lilongwe-Salima Water Supply Project has its funding sources still under negotiation ‘mpakana lero’. Mr Speaker Sir, the people of Lilongwe like those arrested around the Likhubula Water Supply Project in Mulanje deserve good and reliable water source. As government and legislators, we must start feeling ashamed to continue having our Capital City run without reliable water supply systems. We do not have to wait until we reach the stage of the Cape Town water crisis, NO. MCP therefore wishes to see the Minister of Finance explaining the reasons which are delaying the take-off of this long awaited Lilongwe-Salima Water Project. We know that the Minister of Finance is aware that there are some areas in this country with very well funded stand alone water supply projects whose combined population is far less than that of Lilongwe or Kasungu or Thyolo, yet they are favoured with huge well-funded water projects. Mr Speaker Sir, it is our humble plea to the Ministers of Finance and Agriculture, Irrigation & Water Development to desist from what we seem to be regionalist and tribalistic tendencies in the manner water projects are funded and prioritized in the country. Statistics seem to show that one region is getting a lion’s share in the manner water projects are being distributed in total disregard of any demographic justifications. While on the same Mr Speaker Sir, MCP wishes to persuade government not to abandon the construction of the state of the art Military Hospital at Kamuzu Barracks and the Nayuchi-Mozambique Border road by among others, getting resources from the Malata Subsidy to these very important projects. The Malawi Army and the people of Machinga and Mangochi too deserve a good border road.
THE K45.2 BILLION ADMARC LIMITED LOAN BAIL-OUT
In his statement, the Minister of Finance informed this house that Government has bailed out ADMARC on its K45.2 billion Loan which it guaranteed. He also said that he did so within his legal powers on behalf of government. Malawi Congress Party is aware of the powers the Minister of Finance has to give guarantees and indemnities. Such powers Mr Speaker Sir come from S63 (1) of the Public Finance Management Act, No:8 of 2003 of the Laws of Malawi. In short S63(1) Mr Speaker Sir, empowers the Minister of Finance on behalf of the State to give in writing a guarantee or indemnity in respect of the performance of any person, company or body corporate, organization or statutory body it appears to the Minister to be in the public interest and necessary to do so. The lead words in this provision Mr Speakers Sir, are ‘public interest and necessary’. This Section however, Mr Speaker Sir, has two conditions that the Minister of Finance must satisfy before he convinces himself that it is necessary to spend outside the interest of Malawians (public interest). The conditions are that he must secure a prior approval from Cabinet and that the guarantee or indemnity be consistent with S12 to the same Act.
Mr Speaker Sir, Section 12 (1) states that subject to subsection (4), the government shall pursue its policy objectives in accordance with the principles of responsible fiscal management specified in subsection (2) to the same Act. MCP’s focus Mr Speaker Sir is on S12(2)(a) and (d) which state that the principles of responsible fiscal management are-
(a) Managing total public debt at prudent levels so as to provide a buffer against factors that may impact adversely on the level of total public debt in the future;
(d) Managing prudently the fiscal risks facing the State;
By settling the Admarc Loan outside the National Assembly, the Minister of Finance departed from the policy principles of responsible fiscal management. The Minister of Finance is however, sufficiently warned in S12(3) that he can only depart from the principles of responsible fiscal management specified in subsection (2) only in cases of exceptional circumstances. He is further ordered that such a departure must be temporary, reasons, justifications and details for doing so and the approach to be taken to return the fiscal principles be specified. MCP has failed to see any exceptional circumstances that would have forced our experienced Minister of Finance depart from the principles of responsible fiscal management except that he has been forced to settle this loan to reward the ruling elite in DPP who are the true beneficiaries of this taxpayers’ money.
Mr Speaker Sir, Section 12 (4) on the other hand orders the Minister of Finance to disclose to the National Assembly the exceptional circumstances that made him move away from the principles of responsible fiscal management forthwith if the Assembly is in session and if not, at the commencement of the next ensuing session or at the commencement of the next session.; MCP has never seen the Minsiter of Finance doing any of what the law orders him to do.
Mr Speaker Sir, we note with sadness that three reasons the Minister of Finance cited as obstacles to our achieving macroeconomic stability is the K45.2 billion Admarc bail out by government. It is possible that the bail-out was approved by Cabinet as the law requires. But it certainly did not get the blessings from the National Assembly. The Minister of Finance did not even bother to follow the demands of S12(4) having been cleared by Cabinet. So as am speaking now, the National Assembly may have no record or report from the Minister of Finance explaining why he departed from the principles of responsible fiscal management as required by S12 to the Public Finance Management Act. The question we may wish to ask is; under the circumstances, are the actions and decisions of the Minister of Finance regarding the Admarc K45.2 billion bail-out still legally binding? Malawi Congress Party does not believe that the guarantee given to Admarc was in the first place done in good faith. It is possible that the Minister of Finance never bothered to inform the National Assembly about the guarantee of the loan because it was not necessary and had nothing to do with the public interest later alone the provisions of S12. Well Mr Speaker Sir, the State President himself is a Lawyer of the highest notch, he understands the cited provisions of the Public Finance Management Act and he knows that they were not followed right from word go. Malawi Congress Party Mr Speaker Sir, therefore wishes to ask the State President through you Sir, two questions.
1 How legally binding is this bail out of Admarc’s loan given the demands of S63 and S12 of the Public Finance Manage Act, No.8 of 2003?
2 When will his Minister of Finance report to the National Assembly and Malawians about the guarantee issued on the Admarc loan and the reasons for his Minister of Finance to disregard the principles of the responsible fiscal management as stipulated in S12 of the Public Finance Management Act?
Mr Speaker Sir, in the event that the State President is never told the truth by his Ministers or the Attorney General as to why theft and corruption rank high in his administration, here are some free leads. The Auditor General’s Report on the Accounts of the Government of the Republic of Malawi for the fiscal years ended 30th June, 2013 – 3oth June, 2016 can be a good starting point for him. This report reveals a total disregard of the country’s controlling officers breaking each and every fiscal law the land has. They even do not know anything about the roles of controlling officers as outlined by the Treasury Instructions. Even the Chief Secretary himself or the Secretary to Treasury has no clue about what they are required to do by the Public Finance Management Act when faced with fiscal mismanagement by their officers. For your own information Rt Hon Speaker Sir, government of Malawi has lost a lot of financial resources within the civil service due to the negligence and a who cares attitude of our Controlling Officers. In 2014 for example, K70.6 billion was lost under the DPP government due to missing payment vouchers and other supporting documents. This lost money Mr Speaker Sir, represents lost school blocks in Dowa West, desks for our pupils in Nsanje Central, text books and computers for rural schools in Mzimba West, boreholes that would have eased the water problem our women are enduring and many other essentials for our people in Mangochi Masongola. As if that was not enough, in 2015 this government failed to account for about K72.4 billion on similar accounts of missing documents, vouchers and failure by the Accountant General to reconcile financial statements and IMFMIS. Remember that the notorious cash-gate saga occurred because of government’s failure to reconcile cash books with bank statements. Your guess now is as good as mine as to how far fiscal abuse has gone up in 2016, 2017 and what is happening right now as we speak Mr Speaker Sir.
WHERE ARE THE MALAWI SAVINGS BANK PROCEEDS?
This House Mr Speaker Sir, passed a Resolution stopping Government from selling the peoples’ Bank, Malawi Savings Bank Limited (MSB). The government Auctioneer, the Minister of Finance sold it all the same. People lost jobs even after they were promised job security after the sale. Children of the dismissed employees were sent back from school because their parents no longer possessed the means and ways of paying them their school fees, families were broken all because, this DPP Government sold our Bank, popularly known as MSB. In a James Bond film, Malawians witnessed a smaller bank swallowing a much bigger bank under the questionable pretext by the Reserve Bank of Malawi that MSB was under-capitalized and therefore unfit to carry on the banking business under the requirements of Basal II. The Minister of Finance appeared to be in a very big hurry to please his Master and did not pay any attention that the smaller bank was not even fully capitalized at the time of sale. That even its books were falsified to appear in order and that its non-performance loan rate (NPL/loan default rate) was as high as 68%. It did not matter to him because it was very important for him to secure his position and seal a deal to remain Minister of Finance for five years.
Malawians Mr Speaker Sir, have now come back to their senses and agree with us in the MCP that the sale of their Bank was done fraudulently. They now know that there was collusion between the Minister of Finance and the ruling elite to benefit from the said sale and this is why that even the Anti-Corruption Bureau has never been interested to investigate the whereabouts of the sale proceeds. The Ministers of Finance and Justice are on record telling the National Assembly that the MSB toxic loans government settled on behalf of the DPP elites will be collected, but up to now, no single tambala has been collected. Malawians today don’t even know where the proceeds of the sale amounting to K9.9 billion are being kept and for what. The Ministers of Finance and Justice must come out clearly, and tell the country where their monies are kept? Malawians must know that had these monies been available, the University of Malawi would have subsidized the school fees for our children to continue their studies uninterrupted. Each constituency would have been given fifty boreholes for the rural poor to afford good water, but DPP has other priorities with the money hence their denial of access for Malawians. It is now an open secret that Malawi is under a state sponsored State Capture and that only those who do not affiliate with the ruling elite are seen to offend the law. The Minister of Finance himself is on a secret mission to silence MPs who are very critical of government fiscal mismanagement with arrests and court proceedings on the trumped up charges from CDF perceived mismanagement. Let us hope that government is ready to deal with the counter-suits which will follow from the Honourables in here.
WAY FORWARD TO REDEEM OUR COUNTRY
Mr Speaker Sir, most commentators who seem to side with the Government fiscal mismanagement keep on asking what Malawi Congress Party would do if given chance to rule this country. Well, when someone is stealing and you are telling that person not to steal and to stop stealing, do we really need to spell out what ought to be done next? Mr Speaker Sir and fellow Malawians, the Malawi Congress Party has offered numerous ways of dealing with the problems this country is facing, but it seems that our colleagues in DPP have a tendency of ignoring any recommendations given to them.
However, for the sake of those commentators, who need to have it spelt out for Malawians on what the Malawi Congress Party will do to fix the macroeconomic stability, curb corruption, fix electricity generation and improve on public goods and services delivery, we have the following to say:-
1. MCP will fix and achieve macroeconomic stability for our people by ensuring that the government we will constitute runs on the principles of good planning, accountability, good governance management and servant leadership
2. MCP will curb corruption by ensuring that the state investigations and prosecution bodies like the Anti-Corruption Bureau, the Police Service especially the fiscal, criminal and prosecution departments within it, the Financial Intelligence Authority, the Attorney General, the Auditor General, the Secretary to Treasury, the Reserve Bank of Malawi Governor, the Director of Public Procurement and Disposals and the Director of Public Prosecution are headed by individuals who will be employed on merit and that coming from the same district or same corner of Malawi.
3. MCP will move away from the run of the river approach that is failing Egenco to produce enough electricity by constructing a state of the art water resevour/dam above the troughy Livingstonia Mountains as we move past Chitimba towards Mzuzu to the left of Mulowe. Water will be pumped from the Chitimba side of our natural dam, Lake Malawi up to the Man-made Dam higher up on the mountains and back to the other side of the Lake after pushing the turbines for a long lasting cheaper electricity generation. Other doable sources of power generation will also be taken aboard in as long as it will remain affordable to our people. In the short run MCP will immediately stump out corruption, theft and wastage in the energy sector particularly at ESCOM and EGENCO, this we believe will quickly improve electricity generation in the short run.
4. MCP will provide universal education by ensuring that children who go to primary schools finish their primary, secondary and tertiary education without let or hindrance.
5. MCP will introduce universal health coverage by ensuring that CHAM facilities treat everybody and every sickness without any discrimination as the situation is currently bearing in mind that everyone pays tax in the country.
6. MCP will ensure that civil servants have complete job security and independence of mind without subjecting anyone to any unfair discrimination or political interference.
7. MCP will multiply economic opportunities, raise the living standards, promote business, maintain stable prices, provide social security for the aged, enlarge the domestic products and commodities’ markets in order to get Malawians out the current economic stagnation.
8. MCP will once again make farming a source of income for the masses and increase the yield per acre to ensure that the current underemployment is minimized, saving capacity of the people is increased, national income is enlarged, more food and raw materials can be grown on less land and that more land is available for cash crop production.
Malawi Congress Party Mr Speaker Sir, is geared to regain the lost glory of Malawi and its people by bringing back a government that is anchored on servant leadership, that will share and enjoy with its people guided by a principle of one Malawi, one nation, one vision.
When all is said and done, we ask Malawians to stand up to their birth right and reclaim their country from the hands of these demons. Catholics, Protestants, Moslems, Pentecostals, Anglicans, other believers and those who are still searching for the word of God, let us unite and rebuild our country Malawi without fear or favour.
Lastly Mr Speaker Sir, allow me on behalf of the Mighty Malawi Congress Party to assure you our Speaker and your two Deputies that MCP has no plans to impeach anyone of you. MCP knows that in a democracy every elected person impeaches himself or herself by his/her electorates when recalled for re-election.
Mr Speaker Sir, Malawi Congress Party finishes its statement by wishing all Malawians a reflective Lenten season.
Allow me to once again thank you Sir, my colleagues in here and Malawians out there for listening to me.
I thank you all and glory goes to the Omnipotent God always-Amen.
Compiled by Chauncy Mopho Jere
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