
Research and consulting in Eritrea
Country overview:
IOA has shed light on Eritrea’s often opaque economic, political, and social dynamics through extensive research and consultancy. Our researchers revealed that the resolution of Eritrea’s historic conflict with Ethiopia and the resumption of trade and transportation ties have positively impacted the country’s economy. Despite these developments, Eritrea remains under an authoritarian regime that imposes intrusive policies, including forced conscription and other policies, on its citizens.
Increased global commodity prices have bolstered Eritrea’s mineral exports, particularly copper, gold, potash, and zinc, contributing to GDP growth in 2024 thus supporting Eritrea’s export revenues. However, the agricultural sector continues to face significant challenges, including vulnerability to locust invasions, which are exacerbated by the effects of climate change.
Key opportunities in Eritrea:
- Despite its traditionally closed command economy, Eritrea is reaping benefits from resumed trade with Ethiopia and other regional partners
- IOA economists highlight the country’s vast mineral wealth as a long-term driver for investment and economic growth
- Eritrea’s distinctive architecture, encompassing ancient structures and iconic art deco designs, serves as a key attraction for tourism
Key concerns/risks in Eritrea:
- Eritrea’s status as one of Africa’s most secretive dictatorships creates significant uncertainty for foreign investors attempting to navigate its business environment
- Citizens face severe human rights abuses, including arbitrary arrests, disappearances, forced military conscription, and torture
- Climate challenges such as locust infestations and persistent droughts, exacerbated by global warming, have severely impacted Horn of Africa nations and are expected to worsen in the coming years
Tips on doing business in Eritrea:
Starting a business:
- Foreigners are forbidden by law from owning property, though the state will occasionally make exceptions for an individual if foreign investors are willing to invest large enough amounts
- By law, foreigners are prohibited from owning property in Eritrea. However, exceptions may occasionally be made by the state for individuals willing to invest substantial amounts
Doing business:
- Eritrea lacks a formal investment incentive framework, leaving foreign investors to negotiate terms directly with local officials. The opaque bureaucracy and strict one-party governance create significant challenges for businesses
- To encourage investment, the government established the Free Zone Authority in Massawa, targeting sectors like energy, tourism, and fishing
(Read more at: https://consulateoferitrea.ca/invest-in-eritrea/)
Culture and society:
- Eritrea operates as a police state, requiring foreigners to exercise extreme caution to avoid conflicts with security forces or the risk of wrongful detention. Travel outside the capital, Asmara, is generally restricted, and foreigners must also be mindful of potential landmine hazards
- Diplomatic relations with many countries are limited, which can restrict the support foreign embassies can offer during emergencies
A sample IOA research report on Eritrea: