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 - $3.2 billion (2001 est.)

GDP - real growth rate 7% (2001 est.)

GDP - per capita 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%
other: 0% (2000)
nuclear: 0%

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)

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

NOTE: The information regarding Eritrea on this page is re-published from the 2002 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Eritrea Economy 2002 information contained here. All suggestions for corrections of any errors about Eritrea Economy 2002 should be addressed to the CIA.