Moving to Level 2: Is this the end of the beginning?

The decision to switch to lockdown Level 2 and drop the bans on the sale of alcohol and tobacco products was widely expected. All the signs were there and the unions had gone public in their demands for the change, fearing even greater job losses. Gauteng Premier David Makhura had said earlier in the week that his province was ready to move to the next level.

But the most important statements came from doctors and scientists. It would be impossible, they said, to defend the destruction of the economy while the number of new cases being reported every night was dropping so quickly. And while there will be some who claim there was a “grand conspiracy” to lower the number of tests being conducted, doctors were quick to point out that fewer tests were being done because fewer people were presenting with coronavirus symptoms.

Either way, to keep the country on lockdown Level 3 with fewer than 3,000 new daily cases being announced was always going to be unsustainable.

Pressure was also building up from other corners.

The case brought by British American Tobacco SA (BATSA) on behalf of much of the tobacco industry, along with an appeal to an earlier case brought by the Fair-Trade Independent Tobacco Association had the potential to severely embarrass the government. A loss in either of those cases would have justified the public outrage, and there was an additional potential for BATSA and others to sue the government for loss of income.

But a lot more than just injured pride was on the line with these decisions.

Since the country was locked down, there has been a process of “informalisation” of the economy, which has rolled back two decades worth of attempts to bring everyone into the formal economy. This is a painful dynamic that has the potential to make many workers poorer and less safe, while also reducing the power of the state (and, crucially, its income). If the lockdown on Level 3 had continued much longer, it is possible that this process would have become irreversible.

And, of course, there was also the significant rise in the illicit economy, as illegal booze and cigarettes found their way into millions of desperate hands in every one of thousands of South African communities.

The other significant point of pressure was the simple short-term money predicament. The ban on the sale of alcohol and cigarettes was costing the government a fortune in lost revenue, just as it needed more funds than ever before. The alcohol industry claimed that the excise and tax that has been lost to the government would more than make up for the amount of money borrowed from the IMF. And there is evidence to back up those claims.

The amount of revenue taken as tax by SARS would have declined massively, meaning the government gets closer to the very dangerous moment at which it could not pay salaries or social grants without borrowing more money at ever-higher interest rates.

All of this would have put huge pressure on the Cabinet to abandon its position, and possibly a part of the ideological rigidity that was an apparent lodestar for some of its more unpopular decisions. It is said that those who used this time to pursue their own agendas of yesteryear mounted a big fight to retain their pandemic power. But the scientific and economic evidence were against them. This raises the question of why it took so long to make this decision, and whether in fact the slowdown in the confirmed Covid-19 infections was the most important piece of evidence.

If, indeed, this is the end of the beginning of Covid-19 in South Africa, it might well be the beginning of a series of new political realignments. Never has the ANC been so weak, and never has the opposition been more divided. And never have so many in South Africa – over 10 million (at least) – been without formal income.