Country Snapshot

Population (2019, millions)¹ 6.3
Capital Asmara
Surface Area (km²)² 117,600
Weather¹¹ In Coastal Area: Hottest months, June-August, 30-45°C; coldest months, October-February, 24‑32°C; In Highland Area: Hottest month May, 30°C maximum; coldest months, December-February, 0°C minimum
Languages³ Official: Tigrinya, Arabic and English – Others: Tigre, Kunama, Afar and other Cushitic languages
Main Religions³ Muslim, Coptic Christian, Roman Catholic, Protestant
Time⁴ Eastern Africa Time (EAT) +0300 UTC
Driving Orientation⁵ Right Side
Internet Country Code⁶ .er
Country Calling Code +291
Plug, Socket and Voltage⁷ Type C and L – 230V/50 Hz
Currency Nakfa (ERN) – 1/100 = cents
Exchange Rate (As of 7 April 2015, per USD)⁸ 10.47
GDP at Market Prices (2018, current, billions of USD)⁹ 8
GDP Growth (2018, annual %)⁹ 4.98
Average GDP Growth (2014-2018, annual %)⁹ 5.42
GDP per Capita, PPP (2018, current international $)⁹ 2,299
Inflation, Consumer Prices (2018, annual %)⁹ 10.71
Average Inflation, Consumer Prices (2010-2014, annual %)⁹ 10.92
Total Reserves in Months of Imports (2013)⁹

Sources:
¹United Nations Population Division, Department of Economic and Social Affairs.
²COMESA Statistics, COMESTAT Data Hub.
³CIA World Factbook.
⁴Time and Date Portal.
⁵Chartsbin Portal, “Worldwide Driving Orientation by Country”.
⁶Wikipedia, “List of Internet top-level domains”; and, Internet Assigned Numbers Authority, Root Zone Database.
⁷International Electrotechnical Commission, World Plugs.
⁸ XE Portal.
⁹AFDB Socio Economic Database.
¹¹Economist Intelligence Unit.

Reasons to Invest in Eritrea

  • Eritrea’s Strategic Location along the Red Sea provides ideal exposure to one of the world’s busiest shipping lines and established linkages to other areas of the region and beyond. The Port of Massawa is a transit point for goods to the Middle East, European and Asian Markets. The development of the port is poised to bring about potential gains to trade.
  • The establishment of a Free Port Zone at Massawa is further expected to boost trade prospects within the already established Middle Eastern and African Markets.
  • Investment in exploration activities for reserves of oil, natural gas, and other minerals provide a potential source for the expansion of export receipts. Eritrea’s natural mineral resources include gold, copper, potash, zinc, oil, natural gas, cement, gypsum, granite, marble, ceramics, limestone and iron ore.
  • Peace and security are the main pillars of a true and conducive investment environment in Eritrea. The economic policy underlines the necessity to have a market lead economic system.
  • Opportunities exist in agriculture, mining, marine resources and tourism among others.

Source: Eritrea Ministry of Information Online Portal

Population

Youth Literacy Rates (2018, %)

Youth Literacy Rate, Population 15-24 Years, Both Sexes 92.27
Youth Literacy Rate, Population 15-24 Years, Female 92.71
Youth Literacy Rate, Population 15-24 Years, Male 93.81

Source: United Nations Educational, Scientific and Cultural Organization, UNESCO Institute of Statistics.

Labour

Unemployment (2018, % of Total Labour Force, Modeled ILO Estimate)

Unemployment, Total 6.54
Unemployment, Female 6.92
Unemployment, Male 6.21

Source: World Bank, World Development Indicators 2019.

Labour Force (2017, % of Ages 15+, Modeled ILO Estimate)

Labour Force Participation Rate, Total 80.55
Labour Force Participation Rate, Female 74.13
Labour Force Participation Rate, Male 87.09
Labour Force, Total (number) 1,617,399

Source: World Bank, World Development Indicators 2019.

Economy Overview

GDP

2014 2014 2016 2017 2018
GDP at Market Prices (current, billions of USD) 4.72 5.29 5.96 6.92 8
GDP Growth (annual %) 5.95 5.71 4.52 5.96 4.98

Source: AFDB Socio Economic Database

Value Added by Sector (% of GDP)

Indicator
Agriculture
Manufacturing
Industry
Services
Construction
Electricity, gas and water
Mining and quarrying
Education
Finance, real estate and business services
Public administration and Defense
Health and Social Work
Other services
Transport, storage and communication
Wholesale and retail trade, hotels and restaurants

Source: AFDB Socio Economic Database.

 

Trade Profile

Import Partners (Imported Value, thousands, USD)

  2014 2015 2016 2017 2018
World 375,825 383,592 368,719 447,080 261,117
Egypt 59,794 54,727 69,387 113,769 121,757
Italy 18,716 21,251 19,546 35,046 23,520
Republic of Thailand 14,733 7,559 0 0 19,298
Germany 28,367 17,883 11,265 11,468 17,498
Russia 0 0 0 3,045 13,219

Source: International Trade Center COMTRADE Statistics.

Export Partners (Exported Value, thousands, USD)

2014 2015 2016 2017 2018
World 508,822 403,829 345,765 392,916 284,891
China 290,460 168,557 157,927 153,621 153,183
United Arab Emirates 84,757 125,985 125,879
Italy 3,347 2,527 2,135 2,098 2,320
Egypt 4,610 5,081 2,864 1,247 1,837
United States of America 90 100 400 256 265

Source: International Trade Center COMTRADE Statistics.

Eritrea’s Top Import Products (USD ‘000)

Chapter Description 2014 2015 2016 2017 2018
All products 375,825 383,592 368,719 447,080 261,117
11 Products of the milling industry; malt; starches; inulin; wheat gluten 17,454 17,663 26,710 54,911 54,064
84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof 48,148 81,953 30,990 64,756 32,563
17 Sugars and sugar confectionery 15,101 8,500 24,929 17,585 17,787
19 Preparations of cereals, flour, starch or milk; pastrycooks’ products 11,458 15,557 13,127 18,551 16,014
85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles 36,123 8,570 52,991 32,897 15,483

Source: COMSTAT database

Eritrea’s Top Import Products (USD ‘000)

Chapter Description 2014 2015 2016 2017 2018
All products 508,822 403,829 345,765 392,916 284,891
26 Ores, slag and ash 490,590 382,328 245,922 254,873 153,183
71 Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin 3,476 5,075 91,170 128,724 125,890
62 Articles of apparel and clothing accessories, not knitted or crocheted 2,118 1,575 1,426 1,563 1,795
09 Coffee, tea, mate and spices 4,140 5,039 2,096 848 1,678
52 Cotton 1,041 916 741 612 466

Source: COMSTAT database

Investment Profile

FDI Inflows (millions of USD)

Year 2016 2017 2018 2019 2020
FDI Inflows 52.3 55.5 61.0 67.1 73.8

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Inward Stock (millions of USD)

Year 2016 2017 2018 2019 2020
FDI Inward Stock 938.8 994.2 1,055.3 1,122.4 1,196.2

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Inflows Main Companies (in terms of number of projects)

Nevsun Resources, Sunridge Gold, Northern Mining Explorations and Oil and Gas Development (OGDCL).

Source: Financial Times, fDi Markets, 2018

Doing Business

Overall Doing Business Ranking

2020 189/190
2019 189/190

Source: World Bank, Doing Business, 2020

Starting a Business

2020 Rank 185/190
Procedures (number) 13
Time (days) 84
Cost (% of income per capita*) 21.3
Paid-in Minimum Capital (% of income per capita*) 93.6

*GNI per capita used: USD 1,064
Source: World Bank, Doing Business, 2020

Paying Taxes

Paying Taxes

2020 Rank 153/190
Payments (number per year) 30
Time (hours per year) 216
Total Tax Rate (% of profit) 83.7
Profit Tax (% of profit) 9.2
Labor Tax and Contributions (% of profit) 0.0
Other Taxes (% of profit) 74.6

Source: World Bank, Doing Business, 2020

Trading Across Borders

2020 Rank 188/190
Time to Export: Border Compliance (hours) No practice
Cost to Export: Border Compliance (USD) No practice
Time to Export: Documentary Compliance (hours) No practice
Cost to Export: Documentary Compliance (USD) No practice
Time to Import: Border Compliance (hours) No practice
Cost to Import: Border Compliance (USD) No practice
Time to Import: Documentary Compliance (hours) No practice
Cost to Import: Documentary Compliance (USD) No practice

Assumptions

  • It is assumed that shipment travels from a warehouse in the largest business city of the exporting economy to a warehouse in the largest business city of the importing economy.
  • It is assumed that each economy imports a standardized shipment of 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed that each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product.
  • A shipment is a unit of trade. Export shipments do not necessarily need to be containerized, while import shipments of auto parts are assumed to be containerized.
  • Shipping cost based on weight is assumed to be greater than shipping cost based on volume.
  • If government fees are determined by the value of the shipment, the value is assumed to be $50,000.
  • The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, airport or land border crossing.
  • Time is measured in hours, and 1 day is 24 hours.
  • Costs do not include tariffs.

Source: World Bank, Doing Business, 2020

Investment Regime

Legal Framework

The Eritrean Investment Proclamation No. 59/1994.
Key guarantees in terms of investment protection include:

  • Government of Eritrea guarantees investment or property on investment will not be nationalized or confiscated and further guarantees that investments will not be attached, seized, frozen, expropriated or put under Government’s custody without due process of law.
  • Profit and dividends of investors, payments for a foreign loan, fees, royalties, or proceeds received from liquidation of investment and/or expansion, and payment received from the sale of transfer of shares will be remitted in accordance with the rate of exchange prevailing at that time
  • For dispute settlement, investors can choose between using an internal institutional arbitrage or institutional arbitration created by multilateral treaties such as International Centre for Settlement of Investment Disputes (ICSID).

Source: Eritrea Ministry of Information Online Portal, and Embassy of Eritrea in Sweden.

Investment Incentives

  • Both local and foreign private sector investors are allowed to participate in all sectors of the economy with no restriction and discrimination
  • Priority foreign exchange allocation given to exporters;
  • Up to 100% retention of foreign currency earning;
  • No taxes on dividends declared;
  • Capital goods, intermediates, industrial spare parts and raw materials are subject to nominal customs duty of 2%
  • Raw materials and intermediate inputs are subject to 3% sales tax; however, all sales tax will be rebated on all materials and inputs that have been used for export production.
  • Exports are exempted from export duties and sales taxes;
  • Any loss incurred during the first two years of operation by an investor may be carried forward for three consecutive years;
  • Marginal tax rate on personal income from 2%-38%: on non-corporate profit from 2%-38%; on corporate profit from 25%-35%; on commercial agriculture from 2%-320%; and on rent income from 1%-48%;
  • Profit derived from mining activities will be taxed as per the mining legislation; and
  • Corporate profit that is set aside from reinvestment taxed at the rate of 20%.

Source: Eritrea Ministry of Information Online Portal, and Embassy of Eritrea in Sweden.

Country Snapshot

Population (2019, millions)¹ 6.3
Capital Asmara
Surface Area (km²)² 117,600
Weather¹¹ In Coastal Area: Hottest months, June-August, 30-45°C; coldest months, October-February, 24‑32°C; In Highland Area: Hottest month May, 30°C maximum; coldest months, December-February, 0°C minimum
Languages³ Official: Tigrinya, Arabic and English – Others: Tigre, Kunama, Afar and other Cushitic languages
Main Religions³ Muslim, Coptic Christian, Roman Catholic, Protestant
Time⁴ Eastern Africa Time (EAT) +0300 UTC
Driving Orientation⁵ Right Side
Internet Country Code⁶ .er
Country Calling Code +291
Plug, Socket and Voltage⁷ Type C and L – 230V/50 Hz
Currency Nakfa (ERN) – 1/100 = cents
Exchange Rate (As of 7 April 2015, per USD)⁸ 10.47
GDP at Market Prices (2018, current, billions of USD)⁹ 8
GDP Growth (2018, annual %)⁹ 4.98
Average GDP Growth (2014-2018, annual %)⁹ 5.42
GDP per Capita, PPP (2018, current international $)⁹ 2,299
Inflation, Consumer Prices (2018, annual %)⁹ 10.71
Average Inflation, Consumer Prices (2010-2014, annual %)⁹ 10.92
Total Reserves in Months of Imports (2013)⁹

Sources:
¹United Nations Population Division, Department of Economic and Social Affairs.
²COMESA Statistics, COMESTAT Data Hub.
³CIA World Factbook.
⁴Time and Date Portal.
⁵Chartsbin Portal, “Worldwide Driving Orientation by Country”.
⁶Wikipedia, “List of Internet top-level domains”; and, Internet Assigned Numbers Authority, Root Zone Database.
⁷International Electrotechnical Commission, World Plugs.
⁸ XE Portal.
⁹AFDB Socio Economic Database.
¹¹Economist Intelligence Unit.

Reasons to Invest in Eritrea

  • Eritrea’s Strategic Location along the Red Sea provides ideal exposure to one of the world’s busiest shipping lines and established linkages to other areas of the region and beyond. The Port of Massawa is a transit point for goods to the Middle East, European and Asian Markets. The development of the port is poised to bring about potential gains to trade.
  • The establishment of a Free Port Zone at Massawa is further expected to boost trade prospects within the already established Middle Eastern and African Markets.
  • Investment in exploration activities for reserves of oil, natural gas, and other minerals provide a potential source for the expansion of export receipts. Eritrea’s natural mineral resources include gold, copper, potash, zinc, oil, natural gas, cement, gypsum, granite, marble, ceramics, limestone and iron ore.
  • Peace and security are the main pillars of a true and conducive investment environment in Eritrea. The economic policy underlines the necessity to have a market lead economic system.
  • Opportunities exist in agriculture, mining, marine resources and tourism among others.

Source: Eritrea Ministry of Information Online Portal

Population

Youth Literacy Rates (2018, %)

Youth Literacy Rate, Population 15-24 Years, Both Sexes 92.27
Youth Literacy Rate, Population 15-24 Years, Female 92.71
Youth Literacy Rate, Population 15-24 Years, Male 93.81

Source: United Nations Educational, Scientific and Cultural Organization, UNESCO Institute of Statistics.

Labour

Unemployment (2018, % of Total Labour Force, Modeled ILO Estimate)

Unemployment, Total 6.54
Unemployment, Female 6.92
Unemployment, Male 6.21

Source: World Bank, World Development Indicators 2019.

Labour Force (2017, % of Ages 15+, Modeled ILO Estimate)

Labour Force Participation Rate, Total 80.55
Labour Force Participation Rate, Female 74.13
Labour Force Participation Rate, Male 87.09
Labour Force, Total (number) 1,617,399

Source: World Bank, World Development Indicators 2019.

Economy Overview

GDP

2014 2014 2016 2017 2018
GDP at Market Prices (current, billions of USD) 4.72 5.29 5.96 6.92 8
GDP Growth (annual %) 5.95 5.71 4.52 5.96 4.98

Source: AFDB Socio Economic Database

Value Added by Sector (% of GDP)

Indicator
Agriculture
Manufacturing
Industry
Services
Construction
Electricity, gas and water
Mining and quarrying
Education
Finance, real estate and business services
Public administration and Defense
Health and Social Work
Other services
Transport, storage and communication
Wholesale and retail trade, hotels and restaurants

Source: AFDB Socio Economic Database.

 

Trade Profile

Import Partners (Imported Value, thousands, USD)

  2014 2015 2016 2017 2018
World 375,825 383,592 368,719 447,080 261,117
Egypt 59,794 54,727 69,387 113,769 121,757
Italy 18,716 21,251 19,546 35,046 23,520
Republic of Thailand 14,733 7,559 0 0 19,298
Germany 28,367 17,883 11,265 11,468 17,498
Russia 0 0 0 3,045 13,219

Source: International Trade Center COMTRADE Statistics.

Export Partners (Exported Value, thousands, USD)

2014 2015 2016 2017 2018
World 508,822 403,829 345,765 392,916 284,891
China 290,460 168,557 157,927 153,621 153,183
United Arab Emirates 84,757 125,985 125,879
Italy 3,347 2,527 2,135 2,098 2,320
Egypt 4,610 5,081 2,864 1,247 1,837
United States of America 90 100 400 256 265

Source: International Trade Center COMTRADE Statistics.

Eritrea’s Top Import Products (USD ‘000)

Chapter Description 2014 2015 2016 2017 2018
All products 375,825 383,592 368,719 447,080 261,117
11 Products of the milling industry; malt; starches; inulin; wheat gluten 17,454 17,663 26,710 54,911 54,064
84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof 48,148 81,953 30,990 64,756 32,563
17 Sugars and sugar confectionery 15,101 8,500 24,929 17,585 17,787
19 Preparations of cereals, flour, starch or milk; pastrycooks’ products 11,458 15,557 13,127 18,551 16,014
85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles 36,123 8,570 52,991 32,897 15,483

Source: COMSTAT database

Eritrea’s Top Import Products (USD ‘000)

Chapter Description 2014 2015 2016 2017 2018
All products 508,822 403,829 345,765 392,916 284,891
26 Ores, slag and ash 490,590 382,328 245,922 254,873 153,183
71 Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin 3,476 5,075 91,170 128,724 125,890
62 Articles of apparel and clothing accessories, not knitted or crocheted 2,118 1,575 1,426 1,563 1,795
09 Coffee, tea, mate and spices 4,140 5,039 2,096 848 1,678
52 Cotton 1,041 916 741 612 466

Source: COMSTAT database

Investment Profile

FDI Inflows (millions of USD)

Year 2016 2017 2018 2019 2020
FDI Inflows 52.3 55.5 61.0 67.1 73.8

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Inward Stock (millions of USD)

Year 2016 2017 2018 2019 2020
FDI Inward Stock 938.8 994.2 1,055.3 1,122.4 1,196.2

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Inflows Main Companies (in terms of number of projects)

Nevsun Resources, Sunridge Gold, Northern Mining Explorations and Oil and Gas Development (OGDCL).

Source: Financial Times, fDi Markets, 2018

Doing Business

Overall Doing Business Ranking

2020 189/190
2019 189/190

Source: World Bank, Doing Business, 2020

Starting a Business

2020 Rank 185/190
Procedures (number) 13
Time (days) 84
Cost (% of income per capita*) 21.3
Paid-in Minimum Capital (% of income per capita*) 93.6

*GNI per capita used: USD 1,064
Source: World Bank, Doing Business, 2020

Paying Taxes

Paying Taxes

2020 Rank 153/190
Payments (number per year) 30
Time (hours per year) 216
Total Tax Rate (% of profit) 83.7
Profit Tax (% of profit) 9.2
Labor Tax and Contributions (% of profit) 0.0
Other Taxes (% of profit) 74.6

Source: World Bank, Doing Business, 2020

Trading Across Borders

2020 Rank 188/190
Time to Export: Border Compliance (hours) No practice
Cost to Export: Border Compliance (USD) No practice
Time to Export: Documentary Compliance (hours) No practice
Cost to Export: Documentary Compliance (USD) No practice
Time to Import: Border Compliance (hours) No practice
Cost to Import: Border Compliance (USD) No practice
Time to Import: Documentary Compliance (hours) No practice
Cost to Import: Documentary Compliance (USD) No practice

Assumptions

  • It is assumed that shipment travels from a warehouse in the largest business city of the exporting economy to a warehouse in the largest business city of the importing economy.
  • It is assumed that each economy imports a standardized shipment of 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed that each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product.
  • A shipment is a unit of trade. Export shipments do not necessarily need to be containerized, while import shipments of auto parts are assumed to be containerized.
  • Shipping cost based on weight is assumed to be greater than shipping cost based on volume.
  • If government fees are determined by the value of the shipment, the value is assumed to be $50,000.
  • The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, airport or land border crossing.
  • Time is measured in hours, and 1 day is 24 hours.
  • Costs do not include tariffs.

Source: World Bank, Doing Business, 2020

Investment Regime

Legal Framework

The Eritrean Investment Proclamation No. 59/1994.
Key guarantees in terms of investment protection include:

  • Government of Eritrea guarantees investment or property on investment will not be nationalized or confiscated and further guarantees that investments will not be attached, seized, frozen, expropriated or put under Government’s custody without due process of law.
  • Profit and dividends of investors, payments for a foreign loan, fees, royalties, or proceeds received from liquidation of investment and/or expansion, and payment received from the sale of transfer of shares will be remitted in accordance with the rate of exchange prevailing at that time
  • For dispute settlement, investors can choose between using an internal institutional arbitrage or institutional arbitration created by multilateral treaties such as International Centre for Settlement of Investment Disputes (ICSID).

Source: Eritrea Ministry of Information Online Portal, and Embassy of Eritrea in Sweden.

Investment Incentives

  • Both local and foreign private sector investors are allowed to participate in all sectors of the economy with no restriction and discrimination
  • Priority foreign exchange allocation given to exporters;
  • Up to 100% retention of foreign currency earning;
  • No taxes on dividends declared;
  • Capital goods, intermediates, industrial spare parts and raw materials are subject to nominal customs duty of 2%
  • Raw materials and intermediate inputs are subject to 3% sales tax; however, all sales tax will be rebated on all materials and inputs that have been used for export production.
  • Exports are exempted from export duties and sales taxes;
  • Any loss incurred during the first two years of operation by an investor may be carried forward for three consecutive years;
  • Marginal tax rate on personal income from 2%-38%: on non-corporate profit from 2%-38%; on corporate profit from 25%-35%; on commercial agriculture from 2%-320%; and on rent income from 1%-48%;
  • Profit derived from mining activities will be taxed as per the mining legislation; and
  • Corporate profit that is set aside from reinvestment taxed at the rate of 20%.

Source: Eritrea Ministry of Information Online Portal, and Embassy of Eritrea in Sweden.