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Angola Cuts 2016 Spending by 20%, Finance Minister said.

Angola, facing economic and political pressures, has cut spending under its 2016 budget by 20% and is reassuring international investors it can cope with persistently low oil prices,

Finance Minister Armando Manuel said the surprise announcement Friday by President José Eduardo dos Santos to step down in 2018 shouldn’t concern the country’s foreign investors, and is part of “a normal process.” Mr. Dos Santos has governed the Atlantic coast nation since 1979 and didn’t lay out a succession plan for the next leader of his party. Angola is expected to hold its next presidential election in 2017.

“We are not talking about changes in regime itself; we are talking succession of one person. It’s a democratic country and this is what we expect,” Mr. Manuel said in an interview after speaking at a London conference Monday. He said the ruling party, the MPLA, would handle succession issues.

Mr. Manuel declined to comment on speculation that Mr. Dos Santos could push for his son, José Filomeno de Sousa dos Santos, the head of Angola’s sovereign-wealth fund, or his daughter, business magnate Isabel dos Santos, to take over.

Along with other oil-dependent African nations, Angola has been rocked by the sharp fall in oil prices and a shrinking supply of dollars to pay for imports. Around 80% of the country’s revenue and nearly all of its export earnings come from crude-oil sales.

Earlier this month, Moody’s Investors Service put the country’s credit rating on review for downgrade, saying the structural shock in oil markets had decreased Angola’s economic and financial strength.

The country in recent years has relied heavily on Chinese investment, typically in exchange for oil shipments, for public-spending projects that include infrastructure upgrades.

After having projected a $45 a barrel oil price in its 2016 budget, Angola has already moved to reduce spending by 20% and is currently projecting a $39-a-barrel oil price for the rest of the year under its latest plans, Mr. Manuel said. He said the budget could be cut further if necessary by June. “We are ready to make the required adjustments.”

So far, that has included paring what Mr. Manuel said had been “an ambitious portfolio of public investment.” To save money, Angola has gotten rid of most fuel subsidies and is reforming its tax system to raise more revenue, he said.

The country is also trying to diversify away from its reliance on oil by investing in sectors such as fish farming and agriculture.

The finance minister said Angola won’t tap international investors for a new Eurobond this year, after having brought its debut issue last year for $1.5 billion.

The country will meet with investors later this year, though, in a non-deal road-show, as “a way to keep in touch with the investor community and let them know the policies we are putting in place,” Mr. Manuel said.

Amid concerns that Angola’s oil-backed debt with China could balloon out of control, Mr. Manuel said a likely recovery in the oil price would diminish those liabilities. “In regards to the debt portfolio, we don’t have pressures on the short term,” Mr. Manuel said.

“Currently we can manage the actual structure of the debt service. It’s pretty comfortable,” he said.

By Robert Muriisa.

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