Zambia court overturns ban on main opposition party

LUSAKA (Reuters) - A Zambian court overturned the suspension of the country's leading opposition party on Tuesday, the latest twist in a political saga that has unnerved investors in Africa's largest copper producer.

The Movement for Multiparty Democracy (MMD), which ruled the country for 2 decades until last year, had its party status revoked in March for failing to pay annual registration fees.

The party, which holds a third of the seats in parliament, challenged the legality of the suspension and high court judge Jane Kabuka ruled in its favor.

"An option of a fine should have been considered. The said deregistration is hereby quashed," Kabuka said.

MMD national secretary Richard Kachingwe welcomed the high court decision as a victory for democracy.

"This is a very good decision which will help build our young democracy. That is why we want an independent judiciary," Kachingwe said.

The move against the MMD had raised alarm bells with the investment community, including ratings agency Fitch.

"Even if the decision is overturned by the courts, Fitch highlights again the risks associated with sending a negative message on matters relating to economic policy, property rights and respect for the rule of law," it said in March.

Populist President Michael Sata was swept to power last year by voters looking for change in a country where the global commodities boom had failed to translate into broader prosperity.

(Reporting by Chris Mfula; Editing by Ed Stoddard and Tim Pearce)