Martin van Staden: Motsoaledi and Ramaphosa’s “anti-illicit” crusade nothing but a fever dream

As the world grows more uncertain, clarity matters more than ever. BNC#8 brings together some of the smartest and most experienced minds to help you cut through the noise and navigate the turbulence with greater confidence. Tickets are selling out fast, with only 40 left. Don’t waste time, book your place at BNC#8 by clicking here or on the image below..Key topics:Tobacco bill may worsen SA’s already massive illicit cigarette tradeMotsoaledi criticised for limiting stakeholder engagementHigher taxes and stricter rules could drive smokers to black market .Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Martin van Staden*.When Ramaphosa used his State of the Nation Address to launch the “Illicit Economy Disruption Programme”, promising inter-agency muscle to crush (among others) illicit tobacco syndicates, many hoped for pragmatic relief. Three-quarters of the cigarettes sold in South Africa are already illicit.But three weeks later, on 4 March, health minister Motsoaledi stood before the Portfolio Committee on Health and delivered a presentation that doubled down on the very measures likely to swell that black market even further.The Tobacco Products and Electronic Delivery Systems Control Bill of 2022 is still grinding through Parliament, and even at this advanced stage Motsoaledi was unwilling or unable to address the “outstanding issues” the committee had flagged. The minister offered no concession on the flawed process the bill has followed, no compromise on the mission creep against new technologies, and no recognition that South Africa’s enforcement machinery is hopelessly broken.Motsoaledi opened with a now-usual lie: that the bill supposedly does not “ban” smoking, but only “protects public health”. In reality, the bill would give the minister the untethered power to ban smoking (and vaping) at his discretion, anywhere in the country..Read more:.BAT shuts South Africa plant after years of illegal tobacco warnings.Most shockingly, Motsoaledi threw the Constitution out the window when he defended his department’s decision to strictly limit engagement with the parties most affected by the bill. In practice, this means the Department of Health has kept and will keep at arm’s length not only manufacturers, but the thousands of South African farmers, retailers, wholesalers, spaza-shop owners, and informal traders whose livelihoods depend on the lawful tobacco market.Motsoaledi used international guidelines, never seen or countenanced by the voting South African public, to justify this unconstitutional posture.South Africans watching their taxes fund yet another interdepartmental talk shop may be forgiven for cynicism. We already have the Police Service, Revenue Service, the Hawks, and the Border Management Authority – institutions repeatedly exposed for corruption, incompetence, and incapacity. Creating parallel structures when existing ones cannot stem the 75% illicit trade is not governance, but a vanity project dedicated only to Motsoaledi’s institutional legacy.Meanwhile, the 2026 Budget Speech delivered by finance minister Godongwana quietly raised excise duties on tobacco in line with inflation: a 20-pack of cigarettes now attracts R23.58 in tax (up from R22.81), with similar hikes for pipe tobacco, cigars and, crucially, electronic nicotine delivery systems.In a fiscus already projecting anaemic growth and ballooning debt-service costs, the question hangs unanswered: where exactly will the extra billions for the “Illicit Economy Disruption Programme”, the new Monitoring Committee, expanded border checks, and graphic-warning enforcement come from? The same strained coffers that cannot fix potholes, build schools, or maintain electrical infrastructure?Bear in mind that South Africa’s tax-to-GDP ratio is the highest it has ever been, meaning the government is gobbling up more of the economy than ever before... and still cannot afford to fulfil its core mandates.Motsoaledi’s timing could hardly be more tone-deaf, with Consumer Rights Day falling on 15 March.At its core, the Tobacco Bill attacks consumer choice by driving legal, taxed, traceable products into the same shadows occupied by the syndicates Ramaphosa pretends to want to target. When legal cigarettes become more expensive and harder to brand-authenticate under the cover of new plain packaging rules, the path of least resistance for the estimated 8-10 million South African smokers (and growing cohort of vapers) is the R5 street pack with no tax stamp.The minister’s own presentation concedes that three-quarters of the market has already fled underground, and every additional restriction will simply accelerate the exodus.Public health outcomes will obviously suffer. Higher illicit volumes mean no health warnings, age controls, or quality standards, and certainly no additional money for the Revenue Service to fund the very National Health Insurance the minister feverishly champions. Youth initiation will not vanish because packaging is “plain”; it will shift to unregulated channels. Adult smokers denied differentiated harm-reduction options will either continue combustible use or join the black market.The Portfolio Committee now holds the lever before the bill returns to the National Assembly. Civil society, retailers, farmers, public-health realists, and ordinary consumers still have a window to demand the bill be shelved or fundamentally rewritten. Differentiated regulation for non-combustible products, rejection of plain packaging while illicit trade festers, genuine public health policies premised on evidence, and, above all, recognition that enforcement capacity, not consumer freedom or access, is the binding constraint. These are the minimum changes required for any credible “tobacco control” policy..Read more:.Anthea Jeffery: Licencing Bill slams the brakes on already stalled SA economy.Minister Motsoaledi’s presentation offered none of them. Instead, it (again) presented an ideological thesis dressed as evidence.If Parliament rubber-stamps this approach, Ramaphosa’s “anti-illicit” crusade will be remembered not as disruption of criminal syndicates, but as the moment the government handed them permanent market dominance..*Martin van Staden is Head of Policy at the Free Market Foundation and South African Policy Fellow at the Consumer Choice Center.

Martin van Staden: Motsoaledi and Ramaphosa’s “anti-illicit” crusade nothing but a fever dream

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