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Economy
Economy—overview: With independence from Ethiopia on 24 May 1993, Eritrea faced the bitter economic problem of a small, desperately poor African country. The economy is largely based on subsistence agriculture, with over 70% of the population involved in farming and herding. The small industrial sector consists mainly of light industries with outmoded technologies. Domestic output (GDP) is substantially augmented by worker remittances from abroad. Government revenues come from custom duties and taxes on income and sales. Road construction is a top domestic priority. Eritrea has long-term prospects for revenues from the development of offshore oil, offshore fishing, and tourism. Eritrea's economic future depends on its ability to master fundamental social and economic problems, e.g., overcoming illiteracy, promoting job creation, expanding technical training, attracting foreign investment, and streamlining the bureaucracy. The most immediate threat to the economy, however, is the possible expansion of the armed conflict with Ethiopia.
GDP: purchasing power parity—$2.5 billion (1998 est.)
GDP—real growth rate: 5% (1998 est.)
GDP—per capita: purchasing power parity—$660 (1998 est.)
GDP—composition by sector:
agriculture: 18%
industry: 20%
services: 62% (1995 est.)
Population below poverty line: NA%
Household income or consumption
by percentage share:
lowest 10%: NA%
highest 10%: NA%
Inflation rate (consumer prices): 8% (1998 est.)
Labor force: NA
Unemployment rate: NA%
Budget:
revenues: $226 million
expenditures: $453 million, including capital expenditures of
$88 million (1996 est.)
Industries: food processing, beverages, clothing and textiles
Industrial production growth rate: NA%
Electricity—production: NA kWh
Electricity—production by
source:
fossil fuel: NA%
hydro: NA%
nuclear: NA%
other: NA%
Electricity—consumption: NA kWh
Electricity—exports: NA kWh
Electricity—imports: NA kWh
Agriculture—products: sorghum, lentils, vegetables, maize, cotton, tobacco, coffee, sisal; livestock, goats; fish
Exports: $95 million (1996 est.)
Exports—commodities: livestock, sorghum, textiles, food, small manufactures
Exports—partners: Ethiopia 67%, Sudan 10%, US 8%, Italy 4%, Saudi Arabia, Yemen (1996)
Imports: $514 million (1996 est.)
Imports—commodities: processed goods, machinery, petroleum products
Imports—partners: Ethiopia, Saudi Arabia, Italy, United Arab Emirates (1996)
Debt—external: $46 million (1996 est.)
Economic aid—recipient: $149.9 million (1995)
Currency: 1 nafka = 100 cents
Exchange rates: nakfa per US$1
= 7.6 (January 1999), 7.2 (March 1998 est.)
note: following independence from Ethiopia, Eritrea continued
to use Ethiopian currency until November 1997 when Eritrea issued
its own currency, the nakfa, at approximately the same rate as
the birr, i.e., 7.2 nakfa per US$1
Fiscal year: calendar year