Boardroom Talk: Welcome back Michael Sachs - The man who said no to Zuma — and yes to SA

Michael Sachs headed National Treasury's budget office from 2015 to 2017, a period when President Jacob Zuma was pushing a multi-trillion rand nuclear build programme that economists warned would have bankrupted the country. Sachs was among the officials who resisted. He left government in 2017 and moved into academia. President Cyril Ramaphosa has now appointed him as his economic adviser — a role vacant since Trudi Makhaya's departure in 2023. South Africa's economy has grown at less than 1% annually over the past decade, with unemployment among the world's highest. Sachs's return signals a renewed commitment to getting the nation’s economy onto a different path. .By Alec Hogg.I first heard the name Michael Sachs during the darkest chapter of State Capture. South Africa's fiscus was being hollowed out — billions haemorrhaging into the Gupta network, Treasury being systematically dismantled, competent civil servants harassed into silence or departure. While the finance minister Nhlanhla Nene is remembered, the man who actually made the call was Sachs,who headed the national budget office. He looked President Jacob Zuma in the eye — metaphorically, at least — and said the unthinkable: we cannot afford nuclear. Not only can the budget not afford it, the country cannot afford it.That was 2017. Just before Nenegate. And the Weekend Special politician who spearheaded the mercifully brief Gupta takeover of National Treasury. For his part, Sach left government shortly afterwards. South Africa, as ever, could not keep its good ones.Now, nine years on, President Cyril Ramaphosa has called him back. News fed into the system that Michael Sachs has been appointed as the president's economic adviser — a vacancy left by Trudi Makhaya, who served in that role from 2018 to 2023. It is a quiet, almost understated appointment. Bloomberg ran it at 309 words. But the implications are anything but quiet.Here is the context that matters. South Africa's economy has grown by an average of less than 1% a year over the past decade. Officially, unemployment stands among the highest in the world. Public debt has been on a knife-edge, and while it is now expected to stabilise this fiscal year, the economy has consistently failed to break above 2% growth in any sustained way. On the upside Eskom is better. The ports are improving. But the productive engine of Africa's most industrialised economy remains stubbornly underpowered.What Sachs brings is something that cannot be manufactured: credibility earned under fire. He spent a decade at Treasury — from 2007 onwards — shaping the country's budgets during the turbulent Zuma years, when the pressures on him were not merely economic but political and, at times, I suspect, deeply personal. His father is retired Constitutional Court Judge Albie Sachs, a man who himself survived a car bomb planted by apartheid's assassins. Moral courage, it seems, runs in the family..The late Charlie Munger had a phrase he returned to again and again: show me the incentive, and I'll show you the outcome. What makes Sachs unusual is that his incentives have never been financial — a man of his calibre could have earned multiples of his government salary in the private sector, and, indeed, he has spent the intervening years in academia. His incentive was iscountry itself. That kind of public servant is vanishingly rare. Which is precisely why his return matters.The post he will occupy is strategically significant. Sachs is not going back to Treasury — he is being positioned at the centre of economic policy in the presidency itself. This places a man steeped in fiscal rigour, one clearly devoted to serving a higher purpose in the national interest, directly at Ramaphosa's ear. The potential impact is amplified at a time when the government attempts to translate improving macroeconomic indicators into actual growth. The credit rating agencies have noted the improving outlook. The question — always the question — is whether South Africa can convert potential into performance.There is something else worth noting. Those who have written about Sachs over the years have noted his clear idealism. I can relate to that. I have attended eight Berkshire Hathaway annual meetings, participated in nineteen Davos gatherings, and tracked the JSE for more than four decades. Cynicism would have been the easier lesson. But every so often, a Michael Sachs comes along to remind you that idealists are not wrong — they are just early..SA has long suffered a talent drain that is structural and self-reinforcing: all too often, our brightest leave, the mediocre they leave behind inherit the institutions, standards fall, and the cycle continues with more good ones leaving. What Ramaphosa has done — quietly, without fanfare — is attempt to reverse that cycle by bringing one of the best back in. Whether the institutions around Sachs are capable of absorbing and amplifying his influence is the real test. He is not walking into an easy environment. The government of national unity is a coalition of interests, not a coalition of values. Trade-offs will be brutal. The fiscal space is narrow. The structural reforms needed — in labour markets, in education, in energy — are politically costly and economically necessary in equal measure.But Sachs has been here before. He held the line when the president of the country was pushing an unaffordable nuclear programme and massive payoffs for the already overfed. He spoke truth to power when it could have cost him everything. That is the kind of adviser a country in South Africa's position desperately needs — not a yes-man, not a technocrat who disappears into the spreadsheets, but someone who will look across the cabinet table and say: we cannot afford this. Not now. Perhaps not ever.Welcome back, Michael Sachs. South Africa needs you..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.

Boardroom Talk: Welcome back Michael Sachs - The man who said no to Zuma — and yes to SA

Related Stories

By the numbers: Eskom's performance under Cyril's presidency

Michael Saylor's Bitcoin strategy is unravelling

Cyril’s FBI trouble, Mashatile’s Flats move, Mkhwanazi’s award and the Woolies bombs| Lauren Evanthia, The NdB Sunday Show

Jo-Mangaliso Mdhlela: The incalculable debt SA owes Judge Nugent