A court ruling that effectively reinstates corruption charges against African National Congress leader Jacob Zuma could hardly have come at a worse moment for him and the party that has dominated South Africa since the end of apartheid.

There appears little doubt that Zuma will be the party’s presidential candidate ahead of elections expected around April, but the ANC now faces its toughest electoral test yet with hefty graft charges hanging over its man.

Prosecutors say the ruling means Zuma remains charged with corruption, fraud and money laundering. This might severely hurt his image, internationally and at home, during a battle to fend off a challenge from the new party of ANC dissidents called COPE. The ANC is still expected to win, but maybe without such a sweeping parliamentary majority to be able to shape laws as it wishes.

The news brought renewed concerns of political instability and the rand fell to a one-month low.

Zuma’s lawyers may appeal to the Constitutional Court, the highest in the country, which will drag out the case further. Zuma has said before he will only step down as president if found guilty of the corruption and fraud charges.

Prosecutors and Zuma may try to secure a deal that will end the long-running saga over charges that Zuma’s supporters see as politically motivated.

A settlement may suit Zuma if it looks as though he will face new charges and a trial that will either coincide with the election, or punctuate the first years of his presidency.

The appeals court ruling is good news for former President Thabo Mbeki, helping to repair his image after being ousted by the ANC in September, following the high court judgement that suggested he interfered to secure charges against Zuma. He cannot be expected to return to government, however.

What should Zuma and the ANC do next? Even if no charges are brought by then, would the case be likely to have an impact on the elections? Would COPE stand to benefit?

Given that the leaders of the world’s most firmly capitalist countries are splashing around unprecedented billions to nationalise banks, prop up industry and try to get economies moving, it might seem churlish for anyone to question South Africa’s ruling ANC for planning to spend a bit more freely.

This weekend, the African National Congress set out its election manifesto priorities of creating jobs and improving education and health - promises interpreted by many as marking a generally leftward shift under the leadership of president in waiting Jacob Zuma.

But the plan raises the questions of how the spending will be paid for and how dramatic a shift to the left there will be - of major interest to investors as well as South Africans.

“Zuma did not attach a price tag to the manifesto, but ANC leaders privately admit, to allay fears of a tax hike, that it would be too costly to implement,” said this article in the Sunday Independent.

Africa’s biggest economy has grown significantly since the end of apartheid in 1994, although the dynamism had started to falter even before the global financial crisis spread gloom around the world.

South Africa’s poor and its workers had long complained that the benefits were not being shared around fairly and that only those in a new elite were thriving. The leadership under Zuma, widely expected to become president this year, was always going to be under pressure for more social spending from the ANC grassroots and the party’s union and Communist Party allies.

The pressure may have increased further with the emergence of the new COPE party after the ousting of President Thabo Mbeki. Although COPE’s electoral impact is uncertain and it has not yet spelled out its policies clearly, the fact that close allies of Mbeki are behind it has suggested it is likely to align more with the former president’s stance, seen as ‘pro-business’.

Zuma has always been at great pains to spell out to business leaders and foreign investors that there would be no dramatic changes under his rule. Flight of investment could further weaken the rand, mean job losses just at the moment when the ANC wants to create more and force up government borrowing costs.

That could make it even harder to finance populist pledges without resorting to measures that might create even more financial instability.

This article in South Africa’s Times raised questions over the ANC’s plans for the central bank and whether that would damage its standing as a pillar of macroeconomic stability seen as vital for growth.

It is certainly going to be a very tricky time. How substantial do you think any shift to the left is and would it be for the best? If conflicting promises have been made to different interest groups then which are going to be met? Can they all? If not, then what will be the reaction of those who feel disappointed?

(Picture: President of the ruling African National Congress Jacob Zuma dances on stage at his party’s election campaign launch. Reuters)

There was jubilation, defiance and a sense of history in the making in this farming community this week when some 4,000 South Africans gathered to lay the groundwork for what may be a seismic shift in the political landscape.

It is too early to say whether the birth of the Congress of the People will be the political equivalent of an earthquake or a minor tremor. But there is no denying that the new political party caught the nation's attention with the inaugural conference in Bloemfontein.

Delegates sang anti-apartheid anthems, danced and denounced the ruling African National Congress. Many had recently defected from the ANC, which has ruled since the end of apartheid in 1994. Some admitted they had fallen out of favour with the party after new leader Jacob Zuma took over a year ago.

The COPE faithful speak of a need to save the country from Zuma, who is the frontrunner to become the country's next president after the general election in 2009. They believe he will reverse the gains made under Nelson Mandela and Thabo Mbeki, ousted as president by the ANC in September.

"We cannot allow a man like Zuma to take power. This would be a disaster for our country," Joseph Mabunda, a COPE supporter from Bloemfontein said on Tuesday after the new party named its leadership team and outlined its programme for the 2009 election.

COPE's leader is former defence minister Mosiuoa Lekota. Many South Africans refer to him as "Terror," a nickname picked up on the soccer pitch decades ago. It is said he was an accomplished though aggressive player, and his supporters believe he can rekindle that magic against Zuma.

COPE supporters were buoyed by recent by-election victories - their candidates took slightly less than a third of the seats in contention. On Tuesday, delegates carried a mock ANC coffin outside the conference hall.

But the ANC is fighting back and remains very confident.
The ruling party, unlike its new rival, can count on a formidable political machine and healthy campaign coffers.

"You can hang that in a museum next year" says an ANC supporter, pointing at the COPE media credential badge hanging around my neck. "Nobody will beat us."

What do you think of COPE's chances?

South Africans have widely greeted new President Kgalema Motlanthe, many of them with a sense of relief after the bitter and divisive power struggle between his ousted predecessor Thabo Mbeki and Jacob Zuma, leader of the ruling African National Congress.

Motlanthe, quiet spoken and dignified, struck exactly the note the public were looking for when he took office, sober but smiling gently - a huge contrast to the theatrical ebullience of Zuma and the aloof, intellectual style of Mbeki, who was seen as arrogant and out of touch with his people.

The sense of relief was palpable on Friday.

“Motlanthe restores order” said the front page headline of Johannesburg’s Star newspaper, over a picture of the new president swearing the oath of office. “New leader steers SA to calm,” said the Pretoria News. “For now the country has at its head a nice and largely untainted man with not much ego who doesn’t think he knows everything and who listens to people. You can almost feel the relief in the republic,” Business Day said in an editorial.

But Motlanthe’s honeymoon may not last.

He must try to end an unprecedented battle inside the ANC while his country, Africa’s biggest economy, faces serious stresses including record inflation, slowing growth and a power supply crisis that has hit vital platinum and gold mines. Yet, he has little room for manoeuvre. Although fully accepted as the third president since the end of apartheid, he is seen only as an interim leader, holding the fort until Zuma takes over after elections expected around April next year.

This will make it difficult even to make a mark, without arousing suspicions that he wants the permanent job himself–something that many South Africans would welcome.

Ironically this suspicion, if allowed to grow amongst Zuma’s militant allies within the party, could create new divisions instead of allowing Motlanthe to do the job for which he has mainly been elected — gluing back together the once monolithic ANC which is now torn by rifts that have distracted policy makers from addressing huge economic and social problems including persistent and widespread black poverty, an AIDS epidemic and rampant crime.

He has promised to stick with the economic policies of Mbeki, who presided over South Africa’s longest period of growth, but is already under pressure from Zuma’s leftist allies to shift policy away from protecting investors and towards rapidly spreading the fruits of black rule. On Friday, his first day in office, the powerful COSATU trade union confederation called on him to eradicate policy and create jobs.

Can Motlanthe make a difference and end South Africa’s instability? Could he eventually dislodge Zuma to become the next president? Or will he just leave problems untouched until the election? What do you think?