South Africa's appeals court on Monday opened the way for prosecutors to pursue graft charges against ruling party leader Jacob Zuma only months before he is expected to stand for election as president. The appeals court overturned a lower judge's decision in September to dismiss graft charges against Zuma, leader of the African National Congress, which faces its biggest electoral challenge in a vote expected in April.
Re-opening the case will damage Zuma's image and could increase uncertainty in Africa's biggest economy. On Monday, the rand currency fell to a one-month low as investors worried about the impact of the ruling on the economy. The September ruling led to the ANC ousting former President Thabo Mbeki, Zuma's longstanding rival, but also split the party which has been in power since apartheid ended in 1994. Mbeki supporters have since formed a dissident party, COPE, which poses the first real challenge to the ANC in 15 years.
The Supreme Court of Appeal said in its judgement that High Court judge Chris Nicholson made several errors in a September 12, 2008 ruling in which he dismissed bribery, fraud and other charges against Zuma. "The appeal is upheld with costs," judge Louis Harms said in reading the judgment of five appeal court judges. The appeal court said Nicholson had overstepped his authority in several instances.
The National Prosecuting Authority welcomed the ruling and said Zuma, who has been dogged by graft allegations for years, remained charged. The rand currency weakened sharply to a one-month low of 10.0660 against the dollar from 9.9195 before the ruling and analysts said the decision had increased political risk ahead of the general election expected around April.
"Investors fear that a renewed focus on politicking will divert attention from the all-important reassurance they seek that economic policy will not change in a meaningful way under the new leadership," said Razia Khan, regional head of research for Africa at Standard Chartered.
Monday's ruling is unlikely to stop Zuma being elected but could strengthen the challenge from COPE, seen as more friendly to big business than Zuma's trade union and communist allies.
"The balance of power in the ANC also makes it unlikely that Zuma will be forced out as party president before the election. Although the judgement is unlikely to sway loyal ANC members, undecided voters could vote against the ANC if Zuma is facing corruption charges as the election takes place," said Mike Davies, Middle East and Africa analyst at Eurasia Group.