South African Rand Gains On Zuma’s Nkandla Ruling
The South African rand gained on Thursday after the country’s constitutional court ruled that President Jacob Zuma should pay back a portion of public money spent on contentious security upgrades at his rural Nkandla home.
TechCentral reported that the rand strengthened by about one percent to touch 14.74 to the US dollar immediately after the ruling was passed at 11 AM, but lost some of its gains to settle at 14.80 by mid-day.
The rand has depreciated considerably against major currencies since last year as investors shy away from Africa’s second largest economy. Political scandals that have rocked South Africa in recent months are partly to blame for the weakening of the local currency.
Analysts have said before that a decline in Zuma’s rule will help reduce the undue political influence that has been blamed for the woes facing the rand.
The top national court said on Thursday that Zuma has violated the constitution by using taxpayers money on non-security upgrades on his private home.
“The president failed to uphold and defend the constitution,” Chief Justice Mogoeng Mogoeng said while delivering the judgement.
The Nkandla case was brought against the South African president by two opposition parties after country’s Public Protector, an anti-corruption watchdog, said that some of the non-security installation at Zuma’s palatial rural home including a cattle enclosure, swimming pool and amphitheatre, were unconstitutional.
He had already agreed in February to repay part of the nearly $15 million, despite initially refusing to do so.
The opposition has said they will push for the impeachment of the President in parliament, but this is widely expected to be defeated — as it has done before — since the ruling ANC party commands the majority in the house, Reuters reported.
President Zuma has come under political pressure over several of scandals since last, including his involvement with the Gupta family that the opposition claim has compromised some of his ministerial appoint decisions.
In December, he fired respected finance minister Nhlanhla Nene and replaced him with an unknown backbencher, triggering a dramatic sell-off in the rand.