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Eritrea: Economy#

Since formal independence from Ethiopia in 1993, Eritrea has faced many economic problems, including lack of financial resources and chronic drought, which have been exacerbated by restrictive economic policies. 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.

Since the conclusion of the Ethiopia-Eritrea war in 2000, the government has expanded use of military and party-owned businesses to complete President ISAIAS's development agenda. 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 food security are difficult to obtain, erratic rainfall and the percentage of the labor force tied up in national 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 drive economic growth and government revenue over the next few years, but military spending will continue to compete with development and investment plans. Eritrea's economic future will depend on market reform, international sanctions, global food prices, and success at addressing social problems such as refugee emigration.

Economic Facts#

GDP (purchasing power parity)$9.169 billion (2016 est.)
$8.845 billion (2015 est.)
$8.442 billion (2014 est.)
note: data are in 2016 dollars
GDP (official exchange rate)$5.352 billion (2015 est.)
GDP - real growth rate3.7% (2016 est.)
4.8% (2015 est.)
5% (2014 est.)
GDP - per capita (PPP)$1,300 (2016 est.)
$1,300 (2015 est.)
$1,300 (2014 est.)
note: data are in 2016 dollars
Gross national saving4% of GDP (2016 est.)
1.3% of GDP (2015 est.)
4% of GDP (2014 est.)
GDP - composition, by end usehousehold consumption: 80.6%
government consumption: 23.4%
investment in fixed capital: 9%
investment in inventories: 0.1%
exports of goods and services: 9.7%
imports of goods and services: -22.8% (2016 est.)
GDP - composition, by sector of originagriculture: 12.1%
industry: 29.5%
services: 58.5% (2016 est.)
Agriculture - productssorghum, lentils, vegetables, corn, cotton, tobacco, sisal; livestock, goats; fish
Industriesfood processing, beverages, clothing and textiles, light manufacturing, salt, cement
Industrial production growth rate12.2% (2016 est.)
Labor force2.62 million (2016 est.)
Labor force - by occupationagriculture: 80%
industry and services: 20% (2004 est.)
Unemployment rate8.6% (2013 est.)
10% (2012 est.)
Population below poverty line50% (2004 est.)
Household income or consumption by percentage sharelowest 10%: NA%
highest 10%: NA%
Budgetrevenues: $1.58 billion
expenditures: $2.165 billion (2016 est.)
Taxes and other revenues29.5% of GDP (2016 est.)
Budget surplus (+) or deficit (-)-10.9% of GDP (2016 est.)
Public debt119.8% of GDP (2016 est.)
121.8% of GDP (2015 est.)
Fiscal yearcalendar year
Inflation rate (consumer prices)11.8% (2016 est.)
9.8% (2015 est.)
Commercial bank prime lending rateNA%
Stock of narrow money$2.709 billion (31 December 2016 est.)
$2.386 billion (31 December 2015 est.)
Stock of broad money$6.058 billion (31 December 2016 est.)
$5.259 billion (31 December 2015 est.)
Stock of domestic credit$5.371 billion (31 December 2016 est.)
$4.774 billion (31 December 2015 est.)
Current account balance$10 million (2016 est.)
-$102 million (2015 est.)
Exports$485.2 million (2016 est.)
$415.3 million (2015 est.)
Exports - commoditiesgold and other minerals, livestock, sorghum, textiles, food, small industry manufactures
Imports$1.022 billion (2016 est.)
$1.024 billion (2015 est.)
Imports - commoditiesmachinery, petroleum products, food, manufactured goods
Reserves of foreign exchange and gold$213.1 million (31 December 2016 est.)
$209.5 million (31 December 2015 est.)
Debt - external$820.2 million (31 December 2016 est.)
$831.2 million (31 December 2015 est.)
Exchange ratesnakfa (ERN) per US dollar -
15.38 (2016 est.)
15.375 (2015 est.)
15.375 (2014 est.)
15.375 (2013 est.)
15.375 (2012 est.)