The ratings on the Republic of South Africa are supported by Standard&Poor's Ratings Services' view of the country's political stability, transparent institutions, and manageable external debt levels. Well-developed capital markets, a strong financial sector, and an independent central bank also support the ratings. The ratings are constrained by South Africa's social development needs and inequalities, which put pressure on policy; its vulnerability to volatile capital inflows that finance its current account deficits; and the increasing funding needs of government-related entities (GREs). We consider that although South Africa's political environment appears stable and its institutions transparent, some friction has arisen in the transition of the African National Congress (ANC) from a liberation movement to the governing party. Members of
