Investing in Eritrea
The Eritrea Investment Center, a department functioning under the Ministry of Trade and Industry is a one-stop shop for promoting and facilitating investments in Eritrea. The center is committed to support and encourage investment by assisting investors to acquire the necessary legality and by way of incentives and guarantees.
AREAS OF OPPORTUNITIES FOR INVESTMENT
In Eritrea sectors with high prospects for development and lucrative investment opportunities includes agriculture, fisheries, fish processing, manufacturing, communications banking, transport and tourism.
AGRICULTURE – Despite plenty of arable land and significant water resources, Eritrea has at present not only the proportion of the cultivated land is so small but farming is practiced on the basis of archaic and traditional methods. In light of these, there is ample room for accelerated agricultural development if enough investment is channeled to the sector. Large productivity gains could be achieved from relatively modest investments in new and improved methods. Using modern cultivation, fertilization, plant protection and water conservation techniques large quantities of food crops, exports and as raw materials for industrial enterprises can be produced. The development of irrigated agriculture in the lowland river basins is highly promising. Also, Eritrea is endowed with suitable animal husbandry and livestock development, though the current development of this subsector is so low. If modern animal husbandry, improved animal feed, interbreeding efforts, veterinary and vaccination services are introduced high investment returns can be obtained from this
MARINE RESOURCES – Eritrea’s coastal waters are among the most productive fishing grounds in the Red Sea. The continental shelf corers more than 52,oookm2. The maximum sustainable yield (MSY) is between 50 – 70,000 ton per year. The existing fish population includes groupers, jack, catfish, mackerel, barracuda, shark, queen fish, tuna, kingfish, sea bream, and sole. Despite the high potential, the marine sector is one of the most undeveloped activities in Eritrea. With the introduction of improved equipment, facilities, infrastructure, and transport networks via investment high returns can be harnessed from this sub-sector. In light of this, the Government is keenly interested to promote foreign investment (including collaborations) in this area of the economy.
MANUFACTURING – At present, much of the sector is in need of substantial investment for rehabilitation and expansion. Promising manufacturing opportunities for investment can be found in textiles, garment, leather products, general food processing, cement and other construction materials, and a wide range of chemical (including salt) and mechanical manufacturing that can supply the domestic, regional and international markets. Eritrea’s strategic location coupled with the ongoing improvements in infrastructure is believed to extensively promote the Country’s comparative and competitive advantages in developing export-oriented manufacturing sector, thereby opening up for lucrative investment ventures in this area.
MINERAL RESOURCES – Geological works and recent remote sensing investigations have proved that Eritrea possesses favorable geological settings. The Eritrean greenstone belt which hosts precious and base metal covers 70% of the Country. The major mineral resources include:
Metallic-gold, silver, copper, zinc, iron, nickel, and chromium.
Industrial – potash, sulphur, gypsum, salt, silica, sand, feldspar, and kaolin
Construction-marble, granite, chalk, and basalt also deposits of oil and natural gas are believed to be promising.
TOURISM– This sector has huge potential based on the scenic and topographic diversity of the Country as well as its history. The coastal line of pristine sandy beaches, the many islands and the clear water with abundant marine life makes the development of recreational facilities, including hotels and restaurants a viable investment. There are also good investment opportunities aimed at developing the historical and cultural heritage of the Country.
SERVICES – Given its strategic location Eritrea can offer competitive services in the region. As its infrastructure improves substantially the Country can be a successful exporter of financial transport and tourism services. Eritrea has good potential for offshore banking and other financial services. It can also take advantage of growing demand for outsourced services and products needed by large international companies.
PRIVATIZATION – Eritrea’s privatization programme of state-owned enterprises is progressing smoothly. There is no special restriction on domestic or foreign buyers. For the Government rehabilitation and development of the potential of the privatized enterprises is the main concern. The program provides attractive investment opportunities for investors. At present, many state-owned enterprises have been privatized and that are home ready for privatization.
Investment Code-Main Objective
The main objective of the investment code is to promote investment in Eritrea as well as develop and use the country’s natural resources.
The Eritrean investment code also provides various incentives for domestic and foreign investment.
The investment code further outlines that there will be no taxes on declared dividends; any corporate profit that is set aside for reinvestment will be taxed at the rate of 20%. Furthermore, there shall be no exchange controls for remitting dividends and capital gains, and foreign investors are free to repatriate their profits.
To expand the market for import and export potentials the country entered into active membership in regional organizations such as IGAD and COMESA. Investment Environment Peace and security are the main pillars of a true and conducive investment environment in Eritrea.
The following are some of the steps taken for a better investment environment: The Eritrean Investment Center was created in 1998 to promote the country as an attractive investment destination.
The investment center approves investment projects and aims to promote and facilitate investment activities in Eritrea.
Investment incentive in Eritrea The investment policy of Eritrea provides the following incentives to foreign and domestic companies.