Economy:
With
independence from Ethiopia on 27 April 1993, Eritrea faced the bitter
economic problems 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
sectorconsists mainly of light industries with outmoded technologies.
Domestic output (GDP) is substantially augmented by worker remittances
from abroad. Governmentrevenues come from custom duties and taxes
on income and sales. Road construction is a top domestic priority.
Eritrea has inherited the entire coastline of Ethiopiaand has long-term
prospects for revenues from the development of offshore oil fields,
offshore fishing, and tourism. Eritrea's economic future depends on
its ability tomaster fundamental social and economic problems, e.g.,
overcoming illiteracy, promoting job creation, expanding technical
training, attracting foreign investment, and streamlining
the bureaucracy.
GDP:
purchasing power parity—$2.2 billion (1996 est.)
Budget:
revenues: $226 million
expenditures:
$453 million, including capital expenditures of $88 million (1996
est.)
Exports:
total value: $71 million (1996 est.)
commodities:
livestock, sorghum, textiles, food, small manufactures partners: Ethiopia
67%, Sudan 10%, Saudi Arabia 4%, US 3%, Italy, Yemen (1996)
Imports:
total value: $499 million (1996 est.)
commodities:
processed goods, machinery, petroleum products partners: Ethiopia,
Saudi Arabia, Italy, United Arab Emirates
Debt—external: $162 million (1995 est.)
Economic aid:
recipient:
ODA, $NA
Currency:
1 nafka = 100 cents
Exchange
rates: nakfa per US$1 = 7.2 (March 1998 est.)
note:
following independence from Ethiopia, Eritrea continued to use Ethiopian
currency until late in 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
Military expenditures—dollar figure: $40 million (1995)