- The government has created a Free Zone Authority in Massawa to attract new investors, primarily in energy, tourism, and fishing.
- The Port of Massawa is a transit point for goods to the Middle East, European, and Asian markets given its strategic location along the Red Sea. It now has been opened to landlocked Ethiopia, which has the second largest population in Africa.
- Eritrea’s natural mineral resources are copper, potash, zinc, oil, natural gas, cement, gypsum, granite, marble, ceramics, limestone, and iron ore.
- Mining contributes significantly to the GDP of the country, after trading. This is driven primarily by natural gas, oil, gold, zinc, and potash.
- Eritrea’s government is investing in agriculture as a way to support rural livelihoods and strengthen trade with the Middle East and Asia. Its largest export is pepper.
- The government is investing in infrastructure (with construction playing a big role) and human-resources development.
- Infrastructure investments have focused mainly on gold mines, but include a power station and a port.
- The services sector is driven by transportation, real estate and business services contribute the most to Eritrea’s GDP. Transportation contributes significantly to GDP, thanks to the country’s port location.
- Eritrea recently opened its borders to Ethiopia for the first time in 20 years, allowing landlocked Ethiopia to use Eritrea’s Massawa port for direct access to the Red Sea. This act may strengthen investor confidence as well as economic growth.
South Korean Alignment
- Eritrea has limited exports to Korea: USD 22M in 2016 driven by minerals.
- Eritrea contributes less than 1% to South Korean imports and receives less than 1% of export goods from South Korea, low despite Eritrea’s strategic port locations.
- Eritrea’s current development priorities align with South Korean expertise and prior African experience in construction.
- Eritrea’s ongoing trade relationship with North Korea may pose challenges for South Korea – for example, the USA has imposed sanctions on Eritrea as a result of its relations. However, with the momentum seen with Ethiopia, there may be appetite for change.
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