< Economy of Eritria

 

Economy of Eritria

 

Main Crops: Sorghum, lentils, vegetables, maize, cotton, tobacco, coffee, sisal; livestock, goats; fish

Natural Resources:
Gold, potash, zinc, copper, salt, probably oil and natural gas (currently under exploration), fish

Major Industries: Food processing, beverages, clothing and textiles

 

Since formal independence from Ethiopia in 1993, Eritrea has faced many economic problems, including lack of financial resources and chronic drought. Eritrea has a command economy under the control of the sole political party, the People's Front for Democracy and Justice. Like the economies of many African nations, a large share of the population - nearly 80% in Eritrea - is engaged in subsistence agriculture, but the sector only produces a small share of the country's total output. Mining accounts for the lion's share of output.

The government has strictly controlled the use of foreign currency by limiting access and availability; new regulations in 2013 aimed at relaxing currency controls have had little economic effect. Few large private enterprises exist in Eritrea and most operate in conjunction with government partners, including a number of large international mining ventures, which began production in 2013. In late 2015, the Government of Eritrea introduced a new currency, retaining the name nakfa, and restricted the amount of hard currency individuals could withdraw from banks per month. The changeover has resulted in exchange fluctuations and the scarcity of hard currency available in the market.

While reliable statistics on Eritrea are difficult to obtain, erratic rainfall and the large perscentage of the labor force tied up in military service continue to interfere with agricultural production and economic development. Eritrea's harvests generally cannot meet the food needs of the country without supplemental grain purchases. Copper, potash, and gold production are likely to continue to drive limited economic growth and government revenue over the next few years, but military spending will continue to compete with development and investment plans.

 

1990 2000 2010 2020
GNI, Atlas method (current US$) (billions) .. 0.7 1.63 ..
GNI per capita, Atlas method (current US$) .. 300 510 ..
GNI, PPP (current international $) (billions) 1.84 3.51 4.65 ..
GNI per capita, PPP (current international $) 810 1,530 1,470 ..
GDP (current US$) (billions) 0.48 0.71 1.59 ..
GDP growth (annual %) 13.5 -3.1 2.2 ..
Inflation, GDP deflator (annual %) -1.4 25 -16.2 ..
Agriculture, forestry, and fishing, value added (% of GDP) 27 13 14 ..
Industry (including construction), value added (% of GDP) 11 19 22 ..
Exports of goods and services (% of GDP) 11 10 6 ..
Imports of goods and services (% of GDP) 45 58 31 ..
Gross capital formation (% of GDP) 8 22 12 ..
Revenue, excluding grants (% of GDP) .. .. .. ..
Net lending (+) / net borrowing (-) (% of GDP) .. .. .. ..
States and markets
Time required to start a business (days) .. .. 84 84
Domestic credit provided by financial sector (% of GDP) .. .. .. ..
Tax revenue (% of GDP) .. .. .. ..
Military expenditure (% of GDP) 21.3 32.7 .. ..
Mobile cellular subscriptions (per 100 people) 0 0 5.8 20.4
Individuals using the Internet (% of population) 0 0.1 0.6 1.3
High-technology exports (% of manufactured exports) .. .. .. ..
Statistical Capacity Score (Overall Average) (scale 0 - 100) .. .. 32 31
Global links
Merchandise trade (% of GDP) 77 72 42 60
Net barter terms of trade index (2000 = 100) 99 100 85 89
External debt stocks, total (DOD, current US$) (millions) .. 330 1,037 789
Total debt service (% of exports of goods, services and primary income) .. 4.3 .. ..
Net migration (thousands) -315 227 -246 -199
Personal remittances, received (current US$) (millions) .. 3 0 0
Foreign direct investment, net inflows (BoP, current US$) (millions) .. 28 91 67
Net official development assistance received (current US$) (millions) 4.5 178 162.3 276.9