Eritrea Economy Profile 2002

Economy - overview

Since independence from Ethiopia on 24 May 1993, Eritrea has faced the economic problems of a small, desperately poor country. 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 in 1999 fell to less than 1%, and GDP decreased by 8.2% 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. Eritrea's economic future remains mixed. The cessation of Ethiopian trade, which mainly used Eritrean ports before the war, leaves Eritrea with a large economic hole to fill. Eritrea's economic future depends upon its ability to master fundamental social problems like illiteracy, unemployment, and low skills, and to convert the diaspora's money and expertise into economic growth.

GDP (purchasing power parity)

purchasing power parity - $3.2 billion (2001 est.)

GDP - real growth rate

7% (2001 est.)

GDP - per capita (PPP)

purchasing power parity - $740 (2001 est.)

GDP - composition by sector

agriculture: 17%
industry: 29%
services: 54% (2001 est.)

Population below poverty line

NA%

Household income or consumption by percentage share

lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices)

15% (2001 est.)

Labor force

NA

Labor force - by occupation

agriculture 80%, industry and services 20%

Unemployment rate

NA%

Budget

revenues: $206.4 million
expenditures: $615.7 million, including capital expenditures of $NA (2000 est.)

Industries

food processing, beverages, clothing and textiles

Industrial production growth rate

NA%

Electricity - production

210 million kWh (2000)

Electricity - production by source

fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (2000)

Electricity - consumption

195.3 million kWh (2000)

Electricity - exports

0 kWh NA kWh (2000)

Electricity - imports

0 kWh NA kWh (2000)

Agriculture - products

sorghum, lentils, vegetables, corn, cotton, tobacco, coffee, sisal; livestock, goats; fish

Exports

$34.8 million f.o.b. (2000)

Exports - commodities

livestock, sorghum, textiles, food, small manufactures

Exports - partners

Sudan 27.2%, Ethiopia 26.5%, Japan 13.2%, UAE 7.3%, Italy 5.3% (1998)

Imports

$470.5 million c.i.f. (2000)

Imports - commodities

machinery, petroleum products, food, manufactured goods

Imports - partners

Italy 17.4%, UAE 16.2%, Germany 5.7%, UK 4.5%, Korea 4.4% (1998)

Debt - external

$281 million (2000 est.)

Economic aid - recipient

$77 million (1999) (1999)

Currency

nakfa (ERN)

Currency (code)

ERN

Exchange rates

nakfa (ERN) per US dollar - 9.5 (January 2000), 7.6 (January 1999), 7.2 (March 1998 est.)

Fiscal year

calendar year