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EconomyEconomy - 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, a large share of the population - nearly 80% - is engaged in subsistence agriculture, but they produce only a small share of total output. Since the conclusion of the Ethiopian-Eritrea war in 2000, 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 by limiting access and availability. Few private enterprises remain in Eritrea. Eritrea''s economy depends heavily 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 been unable 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 government in 2007 and began mineral extraction in 2010. 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. Gdp (purchasing power parity) World Ranking: 172
$4.089 billion (2011 est.)
$3.761 billion (2010 est.) $3.68 billion (2009 est.) Note Data are in 2011 US dollars Gdp (official exchange rate)
$2.609 billion (2011 est.)
Gdp - real growth rate World Ranking: 14
8.7% (2011 est.)
2.2% (2010 est.) 3.9% (2009 est.) Gdp - per capita (ppp) World Ranking: 221
$700 (2011 est.)
$700 (2010 est.) $700 (2009 est.) Note Data are in 2011 US dollars Gdp - composition by sector
Agriculture 11%
Industry 34% Services 55% (2011 est.) Labor force World Ranking: 122
1.935 million (2007)
Labor force - by occupation
Agriculture 80%
Industry and services 20% (2004 est.) Unemployment rate
NA%
Population below poverty line
50% (2004 est.)
Household income or consumption by percentage share
Lowest 10% NA%
Highest 10% NA% Investment (gross fixed) World Ranking: 133
15.6% of GDP (2011 est.)
Budget
Revenues $715.2 million
Expenditures $1.021 billion (2011 est.) Taxes and other revenues World Ranking: 108
27.4% of GDP (2011 est.)
Budget surplus (+) or deficit (-) World Ranking: 203
-11.7% of GDP (2011 est.)
Public debt World Ranking: 9
118.5% of GDP
130.9% of GDP Inflation rate (consumer prices) World Ranking: 216
20% (2011 est.)
18% (2010 est.) Commercial bank prime lending rate
NA%
Stock of narrow money World Ranking: 137
$1.47 billion (31 December 2011 est.) $1.169 billion (31 December 2010 est.) Stock of broad money World Ranking: 138
$3.196 billion (31 December 2011 est.) $2.608 billion (31 December 2010 est.) Stock of domestic credit World Ranking: 125
$3.244 billion (31 December 2011 est.) $2.628 billion (31 December 2010 est.) Agriculture - products
Sorghum, lentils, vegetables, corn, cotton, tobacco, sisal; livestock, goats; fish Industries
Food processing, beverages, clothing and textiles, light manufacturing, salt, cement
Industrial production growth rate World Ranking: 27
8% (2010 est.)
Electricity - production World Ranking: 169
269.9 million kWh (2008 est.)
Electricity - consumption World Ranking: 179
224.9 million kWh (2008 est.)
Electricity - exports
0 kWh (2009 est.)
Electricity - imports
0 kWh (2009 est.)
Oil - production World Ranking: 168
0 bbl/day (2010 est.)
Oil - consumption World Ranking: 161
6,000 bbl/day (2010 est.)
Oil - exports World Ranking: 152
0 bbl/day (2009 est.)
Oil - imports World Ranking: 166
3,864 bbl/day (2009 est.)
Oil - proved reserves World Ranking: 126
0 bbl (1 January 2011 est.)
Natural gas - production World Ranking: 175
0 cu m (2009 est.)
Natural gas - consumption World Ranking: 172
0 cu m (2009 est.)
Natural gas - exports World Ranking: 92
0 cu m (2009 est.)
Natural gas - imports World Ranking: 187
0 cu m (2009 est.)
Natural gas - proved reserves World Ranking: 172
0 cu m (1 January 2011 est.)
Current account balance World Ranking: 71
-$101.2 million (2011 est.)
-$282.4 million (2010 est.) Exports World Ranking: 177
$415.4 million (2011 est.)
$29 million (2010 est.) Exports - commodities
Livestock, sorghum, textiles, food, small manufactures Exports - partners
Italy 30.5%, Sudan 24%, Saudi Arabia 8.8%, China 8.5%, UK 5.7%, Egypt 4.8% (2008) Imports World Ranking: 177
$900 million (2011 est.)
$689.5 million (2010 est.) Imports - commodities
Machinery, petroleum products, food, manufactured goods Imports - partners
Saudi Arabia 15.7%, Egypt 11.9%, China 11.1%, India 8.9%, Germany 7.2%, Italy 7.2%, South Africa 6.5%, Brazil 5.9%, South Korea 4.3% (2008) Reserves of foreign exchange and gold World Ranking: 156
$184.5 million (31 December 2011 est.) $114.2 million (31 December 2010 est.) Debt - external World Ranking: 153
$1.077 billion (31 December 2011 est.) $1.032 billion (31 December 2010 est.) Exchange rates
Nakfa (ERN) per US dollar -
15.375 (2011 est.) 15.375 (2010 est.) 15.375 (2009) 15.38 (2008) 15.5 (2007) Fiscal year
Calendar year
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Eritrea (Asmara):
 
GPS points from Eritrea (Asmara)
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The UN awarded Eritrea to Ethiopia in 1952 as part of a federation. Ethiopia's annexation of Eritrea as a province 10 years later sparked a 30-year struggle for independence that ended in 1991 with Eritrean rebels defeating governmental forces; independence was overwhelmingly approved in a 1993 referendum. A two-and-a-half-year border war with Ethiopia that erupted in 1998 ended under UN auspices in December 2000. Eritrea hosted a UN peacekeeping operation that monitored a 25 km-wide Temporary Security Zone (TSZ) on the border with Ethiopia. Eritrea's denial of fuel to the mission caused the UN to withdraw the mission and terminate its mandate 31 July 2008. An international commission, organized to resolve the border dispute, posted its findings in 2002. However, both parties have been unable to reach agreement on implementing the decision. On 30 November 2007, the Eritrea-Ethiopia Boundary Commission remotely demarcated the border by coordinates and dissolved itself, leaving Ethiopia still occupying several tracts of disputed territory, including the town of Badme. Eritrea accepted the EEBC's "virtual demarcation" decision and called on Ethiopia to remove its troops from the TSZ that it states is Eritrean territory. Ethiopia has not accepted the virtual demarcation decision. In 2009 the UN imposed sanctions on Eritrea after accusing it of backing anti-Ethiopian Islamist insurgents in Somalia.