Africa > Eritrea > Economy

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Agriculture > products sorghum, lentils, vegetables, corn, cotton, tobacco, coffee, sisal; livestock, goats; fish
Aid as % of GDP	29%		[3rd of 129]
Current account balance	-$205,000,000.00		[92nd of 181]
Debt > External	$311,000,000.00		[24th of 136]
Economy > Overview Since independence from Ethiopia in 1993, Eritrea has faced the economic problems of a small, desperately poor country, accentuated by the recent implementation of restrictive economic policies. Eritrea has a command economy under the control of the sole political party, the People's Front for Democracy and Justice (PFDJ). Like the economies of many African nations, the economy is largely based on subsistence agriculture, with 80% of the population involved in farming and herding. The Ethiopian-Eritrea war in 1998-2000 severely hurt Eritrea's economy. GDP growth fell to zero in 1999 and to -12.1% in 2000. The May 2000 Ethiopian offensive into northern Eritrea caused some $600 million in property damage and loss, including losses of $225 million in livestock and 55,000 homes. The attack prevented planting of crops in Eritrea's most productive region, causing food production to drop by 62%. Even during the war, Eritrea developed its transportation infrastructure, asphalting new roads, improving its ports, and repairing war-damaged roads and bridges. Since the war ended, the government has maintained a firm grip on the economy, expanding the use of the military and party-owned businesses to complete Eritrea's development agenda. The government strictly controls the use of foreign currency, limiting access and availability. Few private enterprises remain in Eritrea. Eritrea's economy is heavily dependent on taxes paid by members of the diaspora. Erratic rainfall and the delayed demobilization of agriculturalists from the military continue to interfere with agricultural production, and Eritrea's recent harvests have not been able to meet the food needs of the country. The government continues to place its hope for additional revenue on the development of several international mining projects. Despite difficulties for international companies in working with the Eritrean government, a Canadian mining company signed a contract with the GSE in 2007 and plans to begin mineral extraction in 2010. Eritrea also anticipates opening a free trade zone at the port of Massawa in 2008. Eritrea's economic future depends upon its ability to master social problems such as illiteracy, unemployment, and low skills, and more importantly, on the government's willingness to support a true market economy.
Exchange rates nakfa (ERN) per US dollar - 13.788 (2004), 13.878 (2003), 13.958 (2002), 11.31 (2001), 9.625 (2000)
Exports	$12,000,000.00		[152nd of 189]
Exports to US	$100,000.00		[199th of 224]
GDP	$1,084,989,000.00		[145th of 203]
GDP (purchasing power parity)	$3,619,000,000.00		[159th of 187]
GDP > PPP	$4,790,000,000.00		[140th of 163]
GDP > Real growth rate	1.3%		[175th of 198]
GDP growth > annual %	0.5 annual %		[162nd of 187]
GDP per capita, PPP > current international $	1,108.55 PPP $		[147th of 169]
Gross National Income	$678,949,000.00		[145th of 172]
Gross national income > constant LCU	3756922000
Human Development Index	0.444		[162nd of 178]
Inflation rate (consumer prices)	17%		[7th of 192]
Population below poverty line	50%		[13th of 46]
Tourist arrivals	410,000		[72nd of 152]

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