JOHANNESBURG (Reuters) - South Africa's President Jacob Zuma has taken out a home loan to repay state money spent on non-security upgrades to his private residence, his office said on Monday, after a scandal over lavish improvements including a swimming pool and amphitheatre.
In a stinging rebuke that hit Zuma financially and politically, the Constitutional Court ordered him in March to return some of the $16 million spent on enhancing his residence at Nkandla in the KwaZulu-Natal province.
Near record unemployment and a stagnant economy have exacerbated discontent with Zuma's leadership. He survived an impeachment vote in April over the Nkandla costs with backing from the ruling African National Congress (ANC), which has been in power since the end of white-minority rule in 1994.
In August, the ruling party suffered its worst losses in municipal elections and lost its grip in key cities including the capital Pretoria and the economic hub of Johannesburg.
The president's office said Zuma had taken out a home loan on standard terms from private black-owned VBS Mutual Bank to repay 7.8 million rand ($538,000) - the sum determined by the Treasury in June as the "reasonable cost" he should bear.
A Treasury spokeswoman said the payment had been received.
In 2014, a national anti-corruption watchdog identified a cattle enclosure, chicken run and visitor centre as non-security items that Zuma must pay for, as well as the theatre and pool.
Zuma denied he had acted dishonestly over the upgrade.
The main opposition party Democratic Alliance said in a statement it welcomed the repayment by Zuma but said "this is only the tip of the iceberg in this corruption-plagued saga."
The party urged Zuma to show proof to parliament that he had received a home loan and that VBS Mutual was not "a front".
The presidency's spokesman Bongani Ngqulunga said Zuma had not considered taking money from his supporters to pay the amount as he had been ordered by the court to pay it personally.
Ngqulunga said: "There was no special dispensation for the president, he received the loan on standard terms, the same terms as anybody else."
VBS Mutual says on its website that its loans policy covers upgrades to homes.
South Africa's Public Investment Corporation (PIC), which manages South African government employee retirement funds and has more than 1.8 trillion rand under management, is listed as a shareholder of VBS Mutual on the bank's website.
Analysts said the repayment would not help Zuma's image.
"The South African electorate have already judged Zuma, and they are not about to change their opinion," said Daniel Silke, a director at Political Futures Consultancy.
"It will not end the broader discussion of the leadership deficiencies of Zuma."
Zuma has survived several political and personal scandals, fending off accusations of corruption, influence peddling and rape before he took office in 2009.
His government has been rocked by a police investigation of Finance Minister Pravin Gordhan. Some analysts say Zuma's allies are behind the investigation in a bid to remove Gordhan. [nL8N1BD1AC]
Zuma has backed the finance minister and his office said in May he is not warring with Gordhan.
Zuma was widely criticized in December when he changed finance ministers twice in a week, sending the rand plummeting and alarming investors.
In late March, the ANC backed Zuma after a party summit following allegations of political interference by his business friends, the Gupta family. Zuma has insisted his ties with the Guptas are above board and the Guptas say they are pawns in a plot to oust Zuma.
The anti-graft watchdog is investigating whether Zuma was influenced by the Guptas to make cabinet appointments.
(Editing by Mark Trevelyan and Janet Lawrence)
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South Africa's President Jacob Zuma has paid for non-security upgrades to his private Nkandla home, the National Treasury said on Monday, in line with a court order issued in March.
"We can confirm as the National Treasury that the payment has been received," a spokeswoman for the Treasury said.
In June, the Treasury said that Zuma should pay 7.8 million rand ($537,000) for the non-security upgrades, after the Constitutional Court in March ordered Zuma to pay back some of the $16 million of state money spent upgrading his private home.
South Africa's Zuma used home loan to repay Nkandla costs - presidency
South Africa's President Jacob Zuma used the proceeds from a home loan from VBS Mutual Bank to pay back 7.8 million rand ($538,000) for non-security upgrades to his private Nkandla home, the presidency said on Monday.
In a statement, the presidency said VBS Mutual Bank is one of the few financial institutions which offer home loans in respect of land owned by traditional authorities.
The unlisted bank says on its website that it is a wholly black-owned specialist corporate finance and retail bank.