14/11/2017 06:25 SAST | Updated 14/11/2017 06:25 SAST

Gordhan: Sachs' Resignation Is 'An Absolute Tragedy'

Gordhan says there is no mystery as to why Sachs resigned.

Former Finance Minister Pravin Gordhan.
Rogan Ward / Reuters
Former Finance Minister Pravin Gordhan.

Former finance minister and MP Pravin Gordhan has called the resignation of the head of budgeting at National Treasury, Michael Sachs, an "absolute tragedy", and said the situation at Treasury that resulted in his departure was "reckless".

Sachs resigned from Treasury on Friday over claims that Treasury's budgeting processes had been usurped by a team from the Presidency and the department of monitoring and evaluation. President Jacob Zuma is reportedly behind the takeover.

Technocrats like Sachs have reportedly been sidelined, rendering Treasury's much revered, careful budgeting processes moot. Instead, the Presidency-appointed team is being allowed to redo Treasury's budget to find R40-billion to pay for free higher education, to implement a plan presented to President Jacob Zuma by the former boyfriend of his daughter, Morris Masutha.

Speaking to The Times on Monday, Gordhan said: "It's an absolute tragedy that a person of Sachs' calibre has decided to leave Treasury. It is no mystery as to why this might have happened, despite the spin doctoring that has been put on it.

"This is another activity that can sabotage our economic growth and fiscal credibility at a time we can least afford it."

The rand reportedly fell from R14.40 to R14.54 after the news broke on Monday.

Treasury confirmed Sachs' resignation on Monday. Finance Minister Malusi Gigaba sought to calm the markets and said he was saddened by Sachs' decision.

"Both the director-general and I are aware of protecting the integrity and transparency of the budget system and process‚ and ensure that all tax and expenditure decision processes continue to be run by the Treasury and minister of finance‚ and continues with the consultative process introduced by the first democratic government.

"The minister wishes to assure the nation that Treasury remains committed to a budget that focuses on fiscal consolidation and mindful of the economic challenges of the country while protecting the poor," Gigaba said.