Zuma calls for better relationship with Africa

While the South Africans are soaking up the World Cup fever - president Jacob Zuma has been addressing foreign leaders at a G20 gathering in Canada.

On Saturday, Zuma called for more meaningful partnerships between the international communities and Africa - hoping that this relationship will promote growth and development across the entire continent.

"As Africa we bring to the G20 Summit the key message that we must, together as the developing and developed worlds, promote stronger and more effective and equal international partnerships for growth and development," Zuma said at the G20 Working Dinner.

"Africa is open to meaningful partnerships and engagement towards ensuring sustainable development," he said.

Zuma added that he believes the continent's one billion populated market will provide many good investment opportunities which will lead to growth.

"The world markets need to take advantage of such opportunities."

The South African president added that international communities must take developing countries more seriously when it comes to things like the "development and implementation of new financial standards and rules".

Zuma revealed that there was a concern that volatile capital inflows into some emerging economies could result in high prices that cannot be justified by economic activity.

He believes that this concern is a result of low interest rates in advanced economies which is contrasted by the high interest rates in emerging markets.

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Markets not bothered by Zuma

Yesterday the National Prosecuting Authority decided to drop the charges of corruption against African National Congress President Jacob Zuma.

There was a lot of comment about this ranging from wild hair tearing to wild jubilation.

The fact of the matter is though that the markets did not even respond.

The Times came in with the headline 'Markets shrug off Zuma decision'.

Jacob Zuma is widely expected to become the next State President of the Republic of South Africa.

The markets seem to have accepted this.

There was a lot of conjecture that a president with corruption charges hanging over his head would be damaging to the economy. But Zuma has done his rounds of the business people, he has spun the lines that they want to hear and they have apparently accepted him.

Having a corrupt head of state is not that an unusual thing.

The French kept Jacques Chirac on for ages.

He even changed the law so that he could not get prosecuted.

And don't forget that it was a French company that is implicated in the corruption scandal.

The bare fact is that the corruption amounts that were allegedly paid have already been priced in, they are not a risk, so the markets don't need to panic, the pay off if it was paid off has already been paid.

The other factors are that regardless of what Zuma may or may not have done there are a number of good things going for South Africa at the moment.

The economy is one of the strongest in the world right now, we are still in a growth phase, the 2010 World Cup is coming and infrastructure development is booming.

The Mail and Guardian reports that Trevor Manuel is positive about the economic bust and believes that it will usher in an era of prosperity for the developing world.

The article quoted him as saying 'There is also an opportunity now to re-shape the international financial and developmental architecture to bring about both greater transparency and better resource flows to support the developing world'.

Business Day noted that the 'Rand (is) at (a) six-month high as investors pile in'.

The rand has been boosted by 7% in the last week.

Fin24 wrote that 'Consumers breathe easier' following the effects of the interest rate decreases, and that the economic stress index wasn't looking as, well, stressful as it was at the end of last year.

There are a number of feel good factors at play here, which have all probably fed into the reaction to the Zuma affair.

The sun is peeking out from behind the clouds and Zuma has indicated that he will be a one term President only, so don't pack for Perth (unless you really want to go live with that lot) get your self a savings account and look forward to your end of year holidays, the world is not ending!

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