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Debt vs GDP / Bonds vs bills

All Data - Eritrea

Year 2012 2013 2014 2015 2016 2017
GDP (billions US$) 3.09 3.44 3.87 - - -
Total Outstanding Amount (Billion US$) - - - - - -
Bonds - - - - - -
Bills - - - - - -
Outstanding Amount/GDP (%) 0.00% 0.00% 0.00% - - -

Country Summary

In the 22 years since independence in 1993, the Government of the State of Eritrea (GoSE) has prioritised investments in infrastructure (communication networks, energy, and water facilities); agriculture (mainly for food security); marine resources; social and other services; and manufacturing. In 2016, GoSE priorities are human-resource development; investment in machinery and equipment; transport and communication facilities; water supply; energy; and essential social services. The government is also creating an attractive environment for the active participation of local and foreign private investors. However, these efforts are being severely curtailed by unresolved border issues, the government’s relatively substantial spending on security, the UN sanctions and macroeconomic instability. Real gross domestic product (GDP) growth is projected to slow from 1.7% in 2014 to 0.3% in 2015 because of slower economic activity and increasing challenges in the global market. However growth should recover in 2016 to 2.2%. Over the medium term, the government sees further prospects in improved trade with Middle-Eastern and Asian countries, additional mining activities, growth in the food sector, and the development of tourism. The GDP is heavily based on services (59.2%), with a very small manufacturing sector (6%). Agriculture, hunting, forestry and fisheries constitute 17.2% of GDP.

The budget deficit declined slightly to 10.3% of GDP in FY 2015/16 from 10.7% in 2014/15, and this trend will continue to 9.9% in 2016/17 as a result of increasing revenue from mining projects, access to more grant resources, and a reduction in unproductive expenditures. Inflation remained at 12.5% in 2015 mainly because of food-supply shocks and high foreign exchange demand. Foodcrop production in 2015 was only about 50% of its 2014 level. Lower international food and oil prices in 2015 and 2016 should contain 2015/16 inflation below 12.5%.

Exports are expected to have grown in 2014-15 due to the start of mineral production at the Asmara project and gold extraction by the Zara Mining Share Company. The current account deficit is forecast to increase to 3.4% of GDP in 2015 from 2.4% of GDP in 2014 and this trend will continue in 2016 despite rising levels of both remittances and the “development and recovery tax” (a 2% tax levied on the Eritrean Diaspora). Eritrea has continued to benefit from the IMF’s capacitybuilding institute, the East African Regional Technical Assistance Centre (E-Afritac), located in Tanzania. Moreover, Eritrea will be able to access the resources of the AfDB’s Transition Support Facility (TSF), a component of the Bank’s Pillar I grants window, which will further strengthen natural-resource governance, public-finance management, and data collection and analysis.

In addition to capacity-building support, the AfDB will help to strengthen institutional governance, especially in the Ministries of Finance and National Development because of their critical roles in ensuring macroeconomic stability and growth. Two projects are in preparation to support reform within the Ministry of Finance to improve public-finance management and tax and customs administration. The Drought Resilience Livelihood Support Program (DRLSP) II aims at integrating private-sector involvement into Bank projects and at developing the private sector in a decentralised environment as key components in skills development and the promotion of employment and entrepreneurship.

Source : African Economic Outlook 2016

Monetary policy & Public debt

The Bank of Eritrea uses interest rates to conduct its monetary policy. Theoretically, the Bank of Eritrea could use one of 3 monetary instruments to conduct its program:  open market operations, the discount rate and reserves requirements. As the Central Bank does not hold a discount window program, in practice reserves requirements are the only tools used.

There is a fixed exchange rate regime. The national currency, the nafka, is pegged to the USD at a rate of ERN 15.40 per USD. The government exercises strict control over the FX market; as a result a parallel FX market has emerged in which the nafka can trade at 1.5 times the official rate. In February 2013, the government introduced a regulation allowing for the opening of FX accounts and the use of FX currency without restrictions.

In recent past, the government has implemented imprudent fiscal policies including financing its fiscal deficit by printing money, causing high inflation rates, averaging 20% in 2011 and 12.3% in 2012.

Eritrea’s public debt is estimated at 126% of GDP for 2012 of which approximately 70% is domestic debt. Eritrea’s public debt is considered unsustainable.

Market Structure

Market Participants


The Bank of Eritrea is the only authorized issuer in the country.

Investor base

The investor base consists of financial market intermediaries and players in Eritrea.

Other intermediaries

There are no known brokers or primary dealers.

Instruments issued

Treasury bills

Treasury bills maturities range up to 180 days.

Average time to maturity and average yield to maturity

T-bill rates are artificially set by the Central Bank.

Primary market and Secondary market

Primary market

There are no auctions conducted for the sale of Treasury bills. The Central Bank fixes the price at which the securities are sold.

Secondary market

There is no secondary market for government securities.

Investor Protection

There is currently no information available. 

Guide to Buying Bonds

Procedures for market participation




Settlement cycle


Market restrictions

Openness to international investors

Shortly after independence, the government launched two privatization programs with the hope to attract foreign investors. However, the initiatives did not prove successful and the government remains a major player in the country’s economic activities.

Capital controls


Restrictions on foreign exchange and profit repatriation

The government exercises strict control over foreign exchange flows.

List of primary dealers