International Trade in Eritrea

News Related to International Trade in Eritrea

• Eritrea: Efforts to Finalize Dam Before Rainy Season - May 14, 2013

  [Shabait]Asmara -Reports indicate that stepped-up endeavors are being made to finalize construction of a dam in Debri-Adi-Hans before the onset of the rainy season.

  Source: All Africa

• Eritrea: Soil, Water Conservation, and Afforestation Ventures in Nacfa Sub-Zone Bearing Fruit - May 14, 2013

  [Shabait]Nacfa -The Agriculture Ministry's branch in Nacfa sub-zone indicated that soil and water conservation, as well as afforestation community undertakings are making remarkable impact regarding environmental stability.

  Source: All Africa

• Eritrea: Farmers Association in Sheib-Mensheb Organizes Seminar With a View to Raising Agricultural Output - May 10, 2013

  [Shabait]Ginda -Farmers Association in Sheib-Mensheb has organized a seminar for members with a view to raising agricultural output.

  Source: All Africa

• Eritrea: Inhabitants of Kuluku, Dase and Ugaro Administrative Areas Finalize Preparations for Rain-Fed Farming - May 09, 2013

  [Shabait]Barentu -The Inhabitants of Kuluku, Dase and Ugaro Administrative areas said that they are about to finalize preparations for rain-fed farming, the process of which was organized at community level.

  Source: All Africa

• Eritrea: More Endeavors Being Exerted to Expand Scope of Tesenei-Aligidir Agricultural Project - May 08, 2013

  [Shabait]Tesenei -The Administration of Tesenei-Aligidir Agricultural Project indicated that further endeavors are being exerted in collaboration with the inhabitants of Telata-Sher to expand the scope of the farm.

  Source: All Africa

• Eritrea: Inhabitants of Adi-Guaedad and Merhano Engage in Farm Land Preparation Ventures - May 07, 2013

  [Shabait]Asmara -Reports indicated that the inhabitants of Adi-Guaedad and Merhano villages, Gala-Nefhi sub-zone, are carrying out preparations for rain-fed farming as the rainy season approaches.

  Source: All Africa

• Eritrea: Homib Area Benefits From Social Service Facilities - May 01, 2013

  [Shabait]Forto-Sawa -The inhabitants of Homib Administrative area, Forto-Sawa sub-zone, said that they have become beneficiaries of social service facilities on the basis of community-based style of living.

  Source: All Africa

• Eritrea: 280 Youths in Agordat Sub-Zone Become Beneficiaries of Training - May 01, 2013

  [Shabait]Agordat -The NUEYS branch in Agordat sub-zone has organized training courses for 280 youths in Aderde and Engerne Administrative areas, 150 of whom are females.

  Source: All Africa

• Eritrea: Fiesko Agricultural Project Creating Considerable Job Opportunities, Say Local Inhabitants - May 01, 2013

  [Shabait]Haikota -The inhabitants of Haikota sub-zone said that Fiesko Agricultural Project has created considerable job opportunities. They further pointed out that they are engaged in various income-generating activities in connection with the ongoing irrigation farming activities around Fanko-Tsimue Dam.

  Source: All Africa

• Eritrea: Association of Dairy Framers in Barentu Sub-Zone Called Upon to Enhance Organizational Capacity - May 01, 2013

  [Shabait]Barentu -The Agriculture Ministry's branch in Barentu sub-zone has called on the Association of Dairy Framers in the locality to enhance organizational capacity and thereby raise production. It made the call at a joint meeting during which it was stated that the available resource to this end has not adequately been harnessed.

  Source: All Africa

• Eritrea: Popular Water and Soil Conservation Campaign Under-Way in Genfelom and Wazintet Administrative Areas - Apr 26, 2013

  [Shabait]Hamelmalo -The inhabitants of Genfelom and Wazintet Administrative areas, Hamelmalo sub-zone, stated that they are conducting popular water and soil conservation campaigns in a bid to increase agricultural produce.

  Source: All Africa

Business outline for Eritrea

Economic Overview

The economic situation has strongly deteriorated since 2002 due to the severe chronic droughts (two thirds of the population are affected by these) a decrease in remittances, autarchic monetary policy led by the government, the heavy costs of military spending and persisting tension with Ethiopia. After contracting in 2008 (-9.8%) and resuming growth in 2009 (3.6%), the economy was only growing slowly in 2010 (1.8%) and the future outlook is hardly more optimistic.

The government's economic strategy consists in managing macroeconomic imbalances by controlling and regulating prices until the security situation permits a transition towards market economy. This policy has lead to a currency shortage and a drop in the private sector activity. The scale of the public debt as a proportion of the GDP is also worrisome, although Eritrea remains up to date with the reimbursement of its debt. With its limited natural resources, the country depends on remittances coming from its diaspora, as well as on international aid and must deal with the challenges of reconstruction. The government's priorities are ensuring security (especially food security), develop the human resources and physical infrastructures in order to improve its insertion in international trade, namely concerning exports, as well as promote the influx of foreign investment.

Eritrea is a poor country devastated by the independence war and by the conflict with Ethiopia. Its slow growth and high inflation rate (20% in 2010) has lead to deterioration of life conditions, in a population which includes a great number of refugees and emigrants (1.5 million persons). Illiteracy and unemployment affect a great proportion of the population.

FDI in Figures

No official data on FDI is available from the country's Central bank. After its return to political stability, Eritrea has started to attract foreign investment during the last few years. Many American and European companies are considering investing in some sectors such as tourism, cement, mining and off-shore oil drilling. In order to attract new investment, the government has created the Eritrea Free Zone Authority in Massawa. The perspectives of an economic growth have improved thanks to the progress accomplished by the creation of a mining joint venture in Bisha (deposits of gold and copper). The feasibility study of Bisha has shown that the project is financially viable and gold extraction is expected to start on 2010.
There are numerous factors impeding investment: corruption, foreign currency control, legal insecurity, arbitrariness of the judicial system, unskilled labor and a disrepair characteristic of a country which has just undergone a period of war.

The main investing countries are the USA, Canada, Italy and Malaysia.

Foreign Trade Overview

After the end of the war with Ethiopia in 2002, the government has tightened its grip on the economy and is openly using the military for developmental purposes. Customs duties are relatively low. However, the State strictly controls the foreign exchange reserves, reducing trade freedom.

Eritrea is essentially an importing nation, agriculture exports (mainly coffee, cotton, leather) depend on the amount of rainfall and outdated irrigation systems; this has created a tremendous trade deficit during the past years, which has been constantly depening and should worsen still in the coming years.

The main trading partners of the country are the United States, the European Union and Sudan.