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States, FCT external debt nears $5.7bn amid higher FAAC

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Thirty-two states and the Federal Capital Territory’s debt rose to nearly $5.7bn in fresh external loans in 2025, driving a year-on-year surge in subnational foreign debt despite higher inflows from Federation Account Allocation Committee disbursements, an analysis by The PUNCH has shown.

Data from the Debt Management Office indicated that the combined external debt stock of the 36 states and the FCT increased from $4.80bn as of December 31, 2024, to $5.68bn as of December 31, 2025, reflecting a net increase of $884.66m, or 18.43 per cent year-on-year.

A breakdown of the data showed that 33 out of the 37 subnational entities recorded increases in their external debt positions during the period under review, representing 89.19 per cent of the total, while only four states posted declines, accounting for 10.81 per cent.

The scale of the increase shows a continued reliance on external financing by state governments amid fiscal pressures, infrastructure demands, and rising FAAC revenues.

Analysis of year-on-year movements revealed that total increases across the 32 states and the FCT amounted to $944.12m, while total reductions across the four states amounted to $59.46m. The net effect of these opposing movements resulted in the overall increase of $884.66m in the external debt stock.

This indicates that the modest declines recorded in a few states were insufficient to offset the widespread borrowing expansion across most states, with increases outweighing reductions by nearly 16 to 1.

The rise in indebtedness comes at a time when FAAC disbursements to states have improved considerably, fuelled by rising oil prices, gains from naira devaluation, and revenue freed up from petrol subsidy removal.

However, the figures suggest that rather than leveraging these inflows to reduce debt, some states are borrowing even more from foreign sources. The 32 states and FCT, which recorded a $944.12m increase in foreign loans, got about N1.36tn in naira terms using the exchange rate adopted by the DMO for 2025, which is N1,435.2571/$1.

Among the states that recorded declines were Edo, Rivers, Anambra, and Bayelsa. Edo posted the largest reduction, with its external debt falling by $29.02m, representing a 7.58 per cent decrease from $383.05m in 2024 to $354.03m in 2025.

Rivers followed with a decline of $28.69m, or 14.37 per cent, dropping from $199.58m to $170.90m. Anambra recorded a marginal decrease of $1.11m, while Bayelsa’s debt reduced slightly by $0.64m.

Despite these reductions, the overwhelming trend across states was upward. Several states recorded significant increases in both absolute and percentage terms, indicating aggressive borrowing patterns.

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Katsina recorded one of the largest increases in absolute terms, with its external debt rising by $100.16m, nearly doubling from $100.46m in 2024 to $200.62m in 2025, representing a 99.70 per cent increase.

Kaduna also posted a substantial increase of $59.19m, bringing its total external debt to $684.29m, making it one of the most indebted states externally after Lagos.

Kogi’s external debt rose by $66.08m, representing a 126.07 per cent increase, while Niger recorded a $73.38m rise, more than doubling its debt stock with a 109.18 per cent increase. Plateau recorded the highest percentage increase overall at 187.24 per cent, with its debt rising by $60.24m.

Gombe posted one of the highest percentage increases at 168.70 per cent, with its external debt jumping by $55.67m from $33.00m to $88.66m. Benue also recorded a sharp increase of 128.16 per cent, while Yobe’s debt surged by 136.56 per cent, further highlighting the rapid pace of borrowing among several states.

Imo’s external debt rose by $45.64m, representing a 63.90 per cent increase, while Oyo recorded a $34.71m rise, translating to a 65.73 per cent increase. Sokoto’s debt increased by $42.92m, or 84.15 per cent, while Jigawa posted a 95.87 per cent increase, adding $22.38m to its debt stock.

At the lower end of the spectrum, Lagos, which remains the most externally indebted state, recorded only a marginal increase of $4.83m, representing 0.41 per cent growth from $1.17bn in 2024 to $1.17bn in 2025.

The relatively flat growth in Lagos’ external debt suggests a more cautious borrowing approach compared to other states, despite maintaining the largest debt stock.

Cross River’s debt rose by $20.46m to $222.92m, while Bauchi recorded an increase of $33.75m to $220.57m. Ogun’s external debt rose by $24.10m, while Ondo recorded an $8.25m increase.

In the South-East, Ebonyi’s debt rose by $16.94m, while Enugu recorded a $12.83m increase. Abia’s external debt also rose by $5.69m, representing a modest 5.61 per cent increase.

Adamawa posted a $26.03m increase, while Akwa Ibom’s debt rose by $19.90m, representing a 55.97 per cent increase. Delta recorded a $6.28m increase, while Ekiti saw a marginal rise of $1.73m, indicating relatively moderate borrowing activity in those states. The FCT also recorded an increase of $7.31m, representing a 37.53 per cent rise from $19.48m in 2024 to $26.80m in 2025.

Further analysis of the debt composition showed that the bulk of external loans were multilateral, with limited exposure to bilateral and other commercial sources, according to the DMO breakdown.

The sustained increase in external borrowing at the subnational level comes amid rising fiscal constraints, including higher recurrent expenditure and growing infrastructure financing needs, despite higher FAAC revenue.

The PUNCH earlier reported that FAAC allocations to states surged by over N2tn in 2025, according to an analysis of Federation Account disbursement data published by the National Bureau of Statistics and collated by The PUNCH.

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The Federation Account disbursement data show that state governments received a total of N7.315tn from the Federation Account Allocation Committee in 2025, compared with N5.186tn in 2024. The year-on-year increase of roughly N2.13tn represents a jump of about 41 per cent in direct FAAC allocations to states.

When the constitutionally mandated 13 per cent derivation revenue is included, total inflows attributable to states rose to N8.934tn (about N9tn) in 2025, up from N6.533tn in 2024, an increase of N2.4tn or 36.74 per cent.

This surge came amid an increase in total FAAC distributions. Aggregate allocations to the three tiers of government, including derivation, rose from N15.259tn in 2024 to N21.897tn in 2025.

States therefore captured a substantial share of the overall increase, both in absolute terms and as a proportion of total federation revenues. Without the 13 per cent derivation component, states’ N7.315tn allocation in 2025 accounted for about 33.4 per cent of the N21.897tn total FAAC disbursement for the year, compared with roughly 34.0 per cent in 2024.

When derivation revenue is included, total state-linked receipts of N8.934tn represented about 40.8 per cent of total FAAC disbursements in 2025.

The PUNCH also reported that states paid N455.38bn in foreign debt service in 2025, up from N362.08bn in 2024, according to Federation Accounts Allocation Committee figures released by the National Bureau of Statistics and obtained and analysed by The PUNCH.

The year-on-year comparison indicated that subnational governments’ foreign debt deductions rose by N93.30bn, representing a 25.77 per cent increase in 2025 over the prior year.

In plain terms, states collectively lost a larger share of their FAAC inflows to external loan repayments and related obligations in 2025 than in 2024, tightening the fiscal space available for salaries, capital projects, and routine governance.

In a recent statement, the acting Director of Communication and Stakeholders Management at the Nigeria Extractive Industries Transparency Initiative, Mrs Obiageli Onuorah, noted that states face financial strain due to debt repayments, despite record-high disbursements from the Federation Accounts Allocation Committee.

According to the statement, a NEITI report showed that several states with high debt burdens also ranked lower in FAAC allocations, raising concerns about their fiscal sustainability and their ability to fund critical projects.

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“The report noted that many states with high debt ratios were in the lower half of the FAAC allocation rankings but ranked higher for debt deductions, raising concerns about their debt-to-revenue ratios and overall fiscal health,” the statement read.

Speaking recently on Channels Television’s Politics Today programme, the Country Director of BudgiT, Vahyala Kwaga, expressed concern that the more FAAC allocations go to states, the more disincentivised they appear to be to boost their internally generated revenue.

Kwaga further said that “Fiscal sustainability requires that states look inward, improving revenue systems, cutting waste, and prioritising infrastructure and human development investments that deliver long-term value.”

Analysts earlier told The PUNCH that continued reliance on foreign loans exposes states to even greater fiscal risks amid a weakening naira.

“Since most of the debts are dollar-denominated, every depreciation of the local currency automatically inflates repayment obligations, forcing states to channel a larger share of their revenues into debt servicing at the expense of development projects,” says a Professor of Economics at the Ekiti State University, Taiwo Owoeye.

Beyond repayment costs, Owoeye noted that heavy external borrowing also undermines states’ financial autonomy.

“By taking on more foreign obligations, many states risk mortgaging future federal allocations to meet repayment schedules, leaving them with little room to respond to emergencies or fund critical sectors such as health, education, and infrastructure,” he explained.

The Director and Chief Economist at Proshare Nigeria LLC, Teslim Shitta-Bey, warned that the rising debt burden on Nigeria’s subnational governments could challenge their fiscal stability in the coming years.

He stressed that most state governments, along with the Federal Government, had failed to effectively manage their balance sheets. Speaking recently to The PUNCH, Shitta-Bey said, “The challenge here is that most of the governments, including the Federal Government, are unable to manage their balance sheets properly. While borrowing might seem like an easy way to run operations, it is not necessarily the right approach.”

According to Shitta-Bey, borrowing should not be the default solution for governments. “Governments could consider longer-term debt structures that resemble equity, which might actually be more beneficial in the long run,” he explained.

A macroeconomic analyst, Dayo Adenubi, also emphasised the need for states to take more targeted steps toward boosting internally generated revenue as they grapple with rising debt obligations and constrained federal transfers.

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My customers taught me Yoruba – London trader, ‘Olakunle Oshodi’

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You are an Iraqi based in London, United Kingdom, how did you learn to speak Yoruba?

I trade at Woolwich Market. That is where I work and where I started meeting many Nigerian customers, especially Yoruba people.

Many of the Nigerians I met at the market spoke Yoruba when they came to buy things from me. At first, I did not understand what they were saying, so I became curious and started asking them to interpret the words they used. That was how I gradually started learning Yoruba from my customers.

What do you sell?

I used to sell pepper and fruit, but now I sell cosmetics and hair. My business has changed over time, but I have continued interacting with many Yoruba customers at the market. Through those interactions, I have also continued learning the language.

How did you first become interested in the Yoruba language?

About 95 per cent of my customers are Yoruba. Whenever they came to buy things, they would speak Yoruba to me. Instead of just listening to them, I started asking questions whenever I heard words I did not understand. I would ask them what the words meant, and that was how I learnt little by little.

The more I listened to them, the more interested I became. I started enjoying the language because I think Yoruba is a sweet language. That was what encouraged me to keep learning it.

What do you like about the Yoruba language?

I like the way the language sounds. For me, it is an interesting language, and because I hear my customers speak it regularly, it became easier for me to pick it up. I also like the way Yoruba people communicate with me when they come to the market.

How did you get the name “Olakunle Oshodi”?

Oh, one of my customers gave me the name. She is a lovely person, and she is Yoruba. She said the name was good for me, and that was how I got the name “Olakunle Oshodi.”

Do you have any family connection to Nigeria?

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No, I don’t have any family connection to Nigeria. I have never even been there. My connection with Yoruba came through my customers and the people I have met at the market.

How long have you been learning Yoruba?

It has been about three years. I can speak it because I really like the language, so it has not been that hard for me. I have been learning mainly through my customers and through everyday conversations at the market.

What made you decide to speak Yoruba with your customers?

Basically, I just wanted to learn. You know, Yoruba people joke with you and laugh with you. They want happiness, and they are not fake. That is why I love them.

When they come to the market, there is always a lot of interaction. They joke, laugh, and make you feel comfortable. So, for me, learning the language became a way of connecting with them better.

Yoruba people are lovely. Even when wahala comes sometimes, they are still just lovely. I enjoy the way they joke and laugh with you. They want happiness, and that is something I really like about them.

Being around them has also helped me learn more about the language because I speak Yoruba almost every day with my customers. The more I interact with them, the more I learn.

Has speaking Yoruba affected your business?

Yes, it has made the business grow. Speaking Yoruba has helped me connect with my customers better, and I believe that has been good for my business.

When customers realise that I can speak their language, it creates a different kind of relationship. We can joke together, laugh together, and communicate more easily.

How do customers react when they realise that you can speak Yoruba?

They are shocked, and they laugh. I see them happy, and I laugh with them. Sometimes, you can see that they did not expect a white man to speak Yoruba, so their reaction is usually one of surprise. Most of the time, they are not expecting it at all, especially when they first hear me respond to them in Yoruba.

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I enjoy seeing their reaction because you can immediately see the happiness on their faces. Sometimes, they will look at me again as if they are trying to confirm whether I really understand what they are saying. It is always a funny and enjoyable moment for me.

Speaking Yoruba also makes the interaction more relaxed. Instead of just being a customer-and-trader relationship, we can joke together, laugh together, and have a better conversation. I enjoy that connection with them. I laugh with them because it makes the interaction more enjoyable, and I am happy when I see that they appreciate my effort to speak their language.

What goes through your mind when customers are surprised by your Yoruba?

I just enjoy the moment. They are shocked and laughing, and I see that they are happy. So, I laugh with them. For me, it is a nice experience because it shows that they appreciate the fact that I am trying to speak their language.

Has speaking Yoruba helped you gain your customers’ trust?

Yes, 100 per cent. I’m always with them. I spend a lot of time interacting with my customers at the market, so speaking Yoruba has helped me become closer to them. When I speak their language, they know that I am making an effort to understand them and communicate with them in a way that makes them comfortable.

I am not just there to sell something to them; I enjoy being around them and having conversations with them. That connection is important to me.

Have you ever had a funny experience while speaking Yoruba?

Yes, I have. They say, “Ah-ah!” when I speak. They are usually surprised when they hear me speaking Yoruba, and that reaction can be funny.

Sometimes, they cannot believe what they hear. They will react with “Ah-ah!” because they did not expect me to speak the language.

Even though sometimes wahala can come, it is still just lovely being around them. My experience with them has been positive, and they have also played an important role in helping me learn the language.

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Do you think your customers have also enjoyed teaching you Yoruba?

Yes, because most of what I know came from interacting with them. When they speak Yoruba and I do not understand a word, I ask them what it means. That is how I learn.

It has been a gradual process. I listen, ask questions, and then try to use the words when I speak to them. I enjoy the learning process.

What are you looking forward to about visiting Nigeria?

As I said earlier, I have never been to Nigeria, but I have plans to go. I have not had the opportunity to visit yet, even though I have developed such a strong interest in the Yoruba language and culture.

I have a plan to go. I have never been there before, so I would like to experience the country and meet more people. I have learnt Yoruba mainly from people in London, so visiting Nigeria would allow me to experience the language and culture differently.

What does Yoruba culture mean to you?

I love the culture. I love Yoruba natives. My connection with Yoruba has grown through the people I meet and the language I have learnt from them. Even though I have never been to Nigeria, I have developed a love for the culture through my customers and the people around me.

What would you like Yoruba people to know about your connection with their language?

I want them to know that I love all of them, and I want to learn more of the language if I can. I speak well, but I only need time. One day, they will see. I want them to know that my interest in Yoruba is genuine. I did not learn it because somebody forced me to; I learnt it because I met Yoruba people, I enjoyed being around them, and I fell in love with the language.

Source: punchng.com

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Tax reform has reduced burden on low-income earners — Revenue board

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The Joint Revenue Board has said Nigeria’s tax reform has reduced the burden on low-income earners and eliminated multiple nuisance taxes.

The Executive Secretary of the JRB, Olusegun Adesokan, stated this while giving an overview of the progress recorded one year into the implementation of the tax reform.

In a post obtained from the board’s X handle on Friday, Adesokan spoke at the 160th meeting of the JRB in Kaduna State, with the theme, “One Year of Reform: Assessing Progress and Addressing Challenges.”

He said the reform had also provided relief for low-income earners and micro-scale businesses, contrary to concerns that it had increased the tax burden.

“Addressing the misconception that the tax reform has increased taxes, the reform has rather reduced the tax burden on low-income earners, eliminated multiple nuisance taxes while providing reliefs for low-income earners and micro-scale businesses,” he said.

Adesokan said 18 state Houses of Assembly had domesticated the model harmonised taxes and levies law, which was designed to address overlapping and multiple taxation across the country.

According to him, the legislation had reduced more than 50 collection items previously administered by states and local government areas to nine sub-heads.

He added that the law had also abolished cash collection and the mounting of roadblocks for revenue collection.

The Executive Secretary said the measures had recorded significant progress in harmonising taxes and levies across the subnational governments.

The JRB, Nigeria’s apex body for revenue administration, convened the meeting to assess progress under the new revenue regime, identify gaps, and address emerging challenges.

The meeting was declared open by the Kaduna State Governor, Senator Uba Sani, who said the reform had expanded opportunities for domestic resource mobilisation and strengthened the country’s capacity to finance development.

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Sani urged the JRB to identify bottlenecks affecting revenue collection, institutional weaknesses creating friction between revenue authorities and taxpayers, and opportunities for technology to improve efficiency in revenue administration.

He said, “The objective of the reform should not be simply to collect revenue; it should be to build a tax system in which compliance becomes easier, enforcement becomes more intelligent and voluntary compliance becomes a norm.”

The Executive Secretary appreciated Governor Uba Sani for hosting the 160th JRB meeting and for his consistent support of the tax reform initiative. He particularly commended the governor for nominating a member of the Board and outgoing Executive Chairman of Kaduna State Internal Revenue Service, Mr Jerry Adams, as his running mate for the 2027 gubernatorial election.

Sani expressed his delight with the tax reform, stressing that apart from eliminating duplication of taxation, it has enhanced revenue generation.

He observed that the national tax revenue has so far risen to N21.6 trillion since President Bola Tinubu introduced tax reform in 2026.

According to him, the nation’s revenue was  approximately ₦10.1 trillion in 2023,  ₦21.6 trillion in 2024, and about ₦36.8 trillion in 2025.

In his opening remarks, JRB Chairman, Dr Zacch Adedeji, represented by the Executive Director, Finance and Corporate Services, Nigeria Revenue Service, Muhammad Abubakar, said the meeting was a call for revenue authorities to take stock of the progress made, address identified gaps and confront emerging challenges.

He said the ultimate measure of the reform’s success must be improved revenue mobilisation, greater compliance, a better taxpayer experience, and stronger contributions to national development.

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Source: punchng.com

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Rivers oil tragedy: 37 die from toxic fumes

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About 37 persons have reportedly died after inhaling fumes from a petroleum product at a jetty in Okrika Local Government Area of Rivers State.

The incident occurred on Thursday at the Okari Jetty in the Okrika Mainland area, where youths from Okrika and neighbouring communities had reportedly gathered to load a petroleum product from an illegal tapping point.

Many others were said to be missing following the incident, which occurred in the mainly coastal community.

A source in the community told our reporter that more than 100 persons had stormed the jetty with locally made boats while a vessel was anchored at the riverside to load petroleum products.

The source said trouble started while the youths were loading the product, as a strong smell suddenly saturated the air, causing several of them to collapse.

“Many of them collapsed into the river, while others who managed to escape the scene had serious respiratory disorders and were being treated at the hospital.

“As I speak to you, over 37 bodies were identified as Okrika people, while six others were yet to be identified and many are still missing,” the source, who pleaded anonymity, said.

The Youths and Environmental Advocacy Centre also confirmed the incident, saying its network of youth volunteers and human rights defenders in the Niger Delta had reported that no fewer than 37 persons suspected of involvement in illegal oil activities died after inhaling what was locally referred to as “Indorama fuel.”

The Executive Director of YEAC-Nigeria, Dr Fyneface Dumnamene, said in a statement that the incident occurred at about midnight on Thursday at the Okari Jetty.

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“According to the report, no fewer than 37 persons suspected to be oil thieves died after inhaling what is locally called ‘Indorama Fuel.’

“Many others are still missing. The incident occurred during the illegal loading of the product into a ship at a tapping point,” he said.

Dumnamene said the victims had connected a pipe to a tapping point on a pipeline that transported petroleum products from the Indorama Eleme Petrochemical through the Port Harcourt Refinery to vessels that reportedly came every two weeks to load products for export.

He added that the youths inhaled the product while a vessel was loading and they were simultaneously loading it into their waiting boats from the illegal tapping point.

“This led to the death of not fewer than 37 persons. Many are still missing, and some corpses have been seen floating on the river but have not yet been recovered,” he stated.

Dumnamene called on the National Oil Spill Detection and Response Agency to immediately conduct a joint investigation visit to the site of the incident.

He also urged the company that owned the vandalised facilities to provide adequate security for its pipelines to prevent a recurrence.

The YEAC-Nigeria boss condemned the alleged sabotage, warning youths to stay away from oil and gas infrastructure because of the dangers associated with high-pressure pipelines.

He also called for alternative livelihood opportunities for youths in the Niger Delta, including the establishment of modular refineries and the legalisation of artisanal refining.

When contacted, the spokesperson for the Rivers State Police Command, Blessing Agabe, confirmed the incident and said the victims were reportedly attempting to steal crude oil.

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Agabe, an Assistant Superintendent of Police, said no official complaint had been lodged with the command but added that an investigation had commenced.

“The suspects reportedly died in the process of attempting to steal crude oil. However, no official complaint has been received in connection with the incident at this time.

“Investigation is ongoing to establish the circumstances surrounding the incident and ascertain the facts,” the police spokesperson stated.

However, the Commander of the Civilian JTF in Okrika LGA, Igwe Godswill, gave a different account of the incident, saying the victims had gone to scoop petroleum products that had spilled into the river when they were allegedly overwhelmed by fumes from a vessel loading products at the jetty.

Godswill described the incident as tragic, saying most of the victims were youths searching for means of livelihood amid a lack of employment opportunities.

“It is so pathetic that this incident is happening in our community. These are young guys who have gone to search for their daily bread, only for the fumes from the fuel that was pumped to kill so many of our youths under the bridge.

“Many of them were choked to death. These are not criminals or anything, but they went out in search of their daily meal. I am advising the community, the leaders and every other person that we need legitimate jobs in the community.

“These things are risky, but when you cannot feed your children, most times, those risky jobs become the only option,” Godswill stated.

He explained that the victims had gone to scoop petroleum products floating on the water when they were overcome by fumes from a vessel loading petroleum products at the jetty.

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Godswill, however, said about 10 bodies had been recovered, adding that only some of the victims could be identified because of the condition of their remains.

He said, “We saw about 10 of them. Four were still unrecognisable, while four persons were identified. The rest could not be identified because their bodies were badly damaged and their faces were severely affected.”

The Civilian JTF commander called on the Rivers State Government, community leaders and other relevant authorities to create employment opportunities for youths in the area to discourage them from engaging in dangerous activities.

“I am calling on the relevant authorities, community leaders, the chairman and every other person to look into this. It is not enough to stop them because, yes, it is a risky job, but they should create jobs for the youths so that everybody will have something to eat.

“Something that can put food on the tables of these young men, the youths and every other person. I can tell you for free that it will not just stop because when that source is the only livelihood, people will still go there.

“Even as of yesterday, people still went there, despite the fact that we had confirmed that people had died from the same activity. So, we are calling on the leaders to look into it and see how they can create job opportunities, especially for the youths,” Godswill added.

Source: punchng.com

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