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

South Africa

ANALYSIS

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

A man crosses a mostly desertd street in downtown Cape Town on the first day of national lockdown, 27 March 2020. (Photo: EPA-EFE / Kim Ludbrook)

The move to a Level 2 lockdown allows SA’s battered economy to start humming again and furnishes the possibility of slowing the flood of job losses. Hopefully, it marks the end of the beginning of the Covid-19 pandemic, even as the virus will probably remain with us for many years. Still, there is much to be done, and no indications yet that any economic reforms will happen.

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.

One of the more important aspects of this decision is that it shows the government has clearly abandoned its earlier statement that there would be a differentiated approach in different parts of the country, that the number of new cases in each province would see that province being treated differently.

Instead, despite some concerns about the situation in KwaZulu-Natal, the entire country is being dropped to Level 2. This may well lead some to speculate about why the differentiated approach was not used at all, and if this could have anything to do with the fact that the DA-governed Western Cape appeared to peak much earlier than the other provinces before it started to decline.

There are many questions about what will happen next, and what approach the government will take.

From midnight on Monday, people will be allowed to move across provincial borders. But will police maintain roadblocks on these borders? If they do, what signal does that send about the government’s attitude towards freedom of movement?

However, the main questions still revolve around the economy.

Millions have lost their jobs, and South Africa was in a recession before Covid-19. All the talk about reform that we heard five months ago appears to have evaporated. Interestingly though, the one group who may be able to put intense pressure on the government in general, and President Cyril Ramaphosa is particular, is visibly frustrated.

Cosatu and other unions have let it be known that they blame Ramaphosa for what has happened, and the lack of progress. In union documents prepared for discussions at Nedlac they say that now is not the time for a “festival of papers” on the economy. They want action.

This pressure may force Ramaphosa’s hand. That, however, would require consensus in the ANC on economic policy and the way forward, something which has been lacking for 20 years, and there are no signs that it will magically appear now.

Even non-controversial issues, such as the liberalisation of the mobile data spectrum, have been delayed, postponed or abandoned. Finance Minister Tito Mboweni published his economic proposals nine months ago – and nothing has happened since then.

The nationwide anger is going to rise because of this lack of action.

In the meantime, some of the important dynamics in our politics have become scrambled because of the impact of the virus on political personalities.

ANC Treasurer Paul Mashatile has been through the horrendous pain of losing first his mother, and then his wife, before suffering from Covid-19 himself. Deputy President David Mabuza was at one point too ill to answer questions in Parliament, even by a Zoom call. He has suffered from ill-health, as a result of poisoning, for several years, and it is not known if this latest setback was related to that. But if he is consistently unwell it makes the politics of the ANC that much more difficult.

This period has seen increasing public anger at the party and its secretary-general, Ace Magashule, because of his own involvement and defence of people related to ANC leaders receiving the government’s Covid-19 PPE contracts.

As in many other countries, the government’s legitimacy has been eroded during the pandemic. This has been a divisive time, and arguments about the right policy flowed strongly, sometimes wildly. The legitimacy of the state was tested as some people broke lockdown regulations, or ignored them, or just gave up on following the state’s lead.

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.

Never has the spectre of nationwide hunger been so real.

While the virus may slowly be receding, at least for a while, there is much work to be done in trying to put South Africa back together again. These are days of one step forward, two steps back. Only time will show how close we came to the abyss. DM

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