With independence from Ethiopia on 24 May 1993,
Eritrea faced the economic problems of a small, desperately poor
country. The economy is largely based on subsistence agriculture, with
80% of the population involved in farming and herding. The small
industrial sector consists mainly of light industries with outmoded
technologies. Domestic output (GDP) is substantially augmented by
worker remittances from abroad. Government revenues come from custom
duties and taxes on income and sales. Road construction is a top
domestic priority. In the long term, Eritrea may benefit from the
development of offshore oil, offshore fishing, and tourism. Eritrea's
economic future depends on its ability to master fundamental social
and economic problems, e.g., by reducing illiteracy, promoting job
creation, expanding technical training, attracting foreign investment,
and streamlining the bureaucracy. The most immediate threat to the
economy, however, is the possible expansion of the border conflict
with Ethiopia, which broke out in May 1998. The hostilities have
drained away substantial resources vital to Eritrea's economic
development.

purchasing power parity - $2.9 billion (1999 est.)

3% (1999 est.)

purchasing power parity - $750 (1999 est.)

agriculture: 18%
industry: 20%
services: 62% (1995 est.)

NA%

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

9% (1998 est.)

NA

agriculture 80%, industry and commerce
20%

NA%

revenues: $283.9 million
expenditures: $351.6 million, including capital expenditures of $NA
(1997 est.)

food processing, beverages, clothing and textiles

NA%

177.6 million kWh (1997 est.)

fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1997 est.)

177.6 million kWh (1997 est.)

0 kWh (1997)

0 kWh (1997)

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

$52.9 million (f.o.b., 1997)

livestock, sorghum, textiles, food, small
manufactures

Ethiopia 64%, Sudan 17%, Italy 5%, Saudi Arabia
2%, US, Yemen (1997)

$489.4 million (c.i.f., 1997)

processed goods, machinery, petroleum products

Saudi Arabia 16%, Italy 14%, UAE 13%, Ethiopia 9%,
Germany 6% (1997)

$76 million (1997 est.)

$123.1 million (1997)

1 nafka = 100 cents

nakfa per US$1 = 9.5 (January 2000), 7.6 (January
1999), 7.2 (March 1998 est.)

calendar year