Reuters - Former Zambian president Frederick Chiluba was acquitted on Monday of all charges in what was seen as a landmark corruption case against an African former head of state.

Analysts say the ruling could be a setback for Zambia’s fight against graft, but the country’s anti-corruption task force described the case as proof of its determination to fight crime within a strong legal framework.

Zambia has earned praise from Western donors for cracking down on corruption, a policy that critics say is rare in Africa.

The ruling is unlikely to deter investors in Africa’s biggest copper producer.

Chiluba’s co-accused, two business executives, were found guilty of theft and possession of state funds and were each imprisoned for three years.

Lusaka magistrate Jones Chinyama said the prosecution had failed to prove the case against Chiluba, who ruled Zambia for a decade after ousting liberation hero Kenneth Kaunda in multiparty elections in 1991.

The trade unionist turned politician, hailed as a democrat after helping to dismantle Kaunda’s 27 years of socialist single party rule, was charged with stealing nearly $500,000 of public funds.

“I find that the accused is not guilty on all counts,” Chinyama said.

LANDMARK RULING

In 2007, British judge Peter Smith ordered Chiluba to pay $58 million to the Zambian Treasury to compensate for money he was suspected of stealing while in office.

That ruling, hailed as a turning point in Africa’s battle against official corruption, was made in Britain where Zambian officials filed a civil case to try to recover properties and other assets owned by Chiluba and his associates in Britain and other European countries.

In 2002 late president Levy Mwanawasa launched Zambia’s biggest anti-corruption drive since independence from Britain in 1964, resulting in jail terms for several prominent figures including senior officials and ministers under Chiluba.

Chiluba’s wife Regina was jailed for three and a half years in March for corruption.

“Most people will think he (Chiluba) was just forgiven, especially (given) that his (co-accused) were found guilty, and this will complicate the fight against corruption. No one will take the fight seriously,” said Jotham Momba, a professor of political science at the University of Zambia in Lusaka.

“However, it will have no effect on investments because most investors care little about corruption, all they think about is to make profits.”

Chibamda Kanyama, an economist with Zambian Breweries, said the ruling could be damaging.

“The judgment is contrary to the people’s expectations. It enhances the perception that the judiciary is compromised,” he said. “Commercial disputes are among the primary drivers of investments and people should hold the court in high esteem.”

Chiluba, an old friend of current President Rupiah Banda, still enjoys support from the poor despite the corruption case. He says he is the victim of a witch hunt.

“Those who thought I am a thief should know now that I am innocent. As a Christian nation we do not steal but the devil will accuse you of stealing,” Chiluba told a news conference after the verdict was handed down.