Fitch Ratings agency on Friday downgraded South Africa to junk status, citing the removal of Pravin Gordhan as finance minister.

Fitch said President Jacob Zuma’s decision to fire Gordhan last week, was likely to see a change in economic policy.

“In Fitch’s view, the cabinet reshuffle, which involved the replacement of the finance minister, Pravin Gordhan, and the deputy finance minister, Mcebisi Jonas, is likely to result in a change in the direction of economic policy.”

It suggested Gordhan may have been punished for efforts to improve the running of parastatals and said with him gone, these were now more likely to be a significant burden on the state’s balance sheet.

“The reshuffle partly reflected efforts by the out-going finance minister to improve the governance of state-owned enterprises.”

Fitch’s decision follows four days after S&P Global downgraded South Africa’s credit rating to junk status, and was widely expected.

It announced in a statement: “The Short-Term Foreign-and Local-Currency IDRs and the rating on the short-term local-currency securities have been downgraded to ‘B’ from ‘F3’. The Country Ceiling has been revised down to ‘BBB-‘ from ‘BBB’.”

This came as tens of thousands of South Africans marched through the streets of major cities to protest against Zuma.

Fitch said better governance would be one of the factors that could prompt ratings agencies to rethink its position on South Africa.

National Treasury acknowledged that the downgrade was a setback for the country but said government remained committed to the fiscal policy outlined in the February budget and to improving the running of state-owned enterprises.

“The announcement by Fitch is noted by government and while it is a setback, government remains committed to making sure that its work with business, labour and the civil society continues in order to improve the business confidence and implement structural reforms to accelerate inclusive economic growth.

“We urge all South Africans to remain positive and continue to work hard in turning this economy around.”