Markets respond badly to Zuma judgement

Investors may fear that a renewed focus on politicking after Monday’s Jacob Zuma judgement will divert attention from the all-important reassurance they seek that economic policy will not change in a meaningful way under the new leadership, says Standard Chartered Africa economist Razia Khan.

This comes amid news on Monday that South Africa’s Supreme Court of Appeal overturned an earlier High Court decision that dismissed the corruption charges against African National Congress (ANC) leader Jacob Zuma.

“This should mean that ANC President Zuma can be charged again by the National Prosecuting Authority,” notes Khan.

The ruling also found that the judge in the earlier High Court decision may have overstepped his authority in saying that the decision to prosecute Zuma had been politically motivated.

“Although the ruling demonstrates the strength of South Africa’s institutions, the decision also introduces more uncertainty into the political outlook. Protest against the decision from grassroots supporters of Jacob Zuma is probable. The knee-jerk reaction of markets has therefore been negative,” said Khan.—I-Net Bridge