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Geography,
agriculture and the economy
Geography
Eritrea is situated in the Horn of Africa and is bordered on the north-east and east by the Red Sea . It covers an area of about 123,000 km2. The country is virtually bisected by the Great Rift Valley, with fertile highlands in the west and desert lowlands in the east. The Dahlak Archipelago and its fishing grounds are located off the sandy, arid coastline. Altitude ranges from below sea level in parts of the eastern lowlands to over 3,000 m on the central plateau. The climate in the southern highlands is slightly more humid and cooler. Out of a population that presently numbers 4.4 million, 73 per cent of Eritreans live in rural areas. Most rural people depend on subsistence agriculture. In the highlands, the population density reaches 200 people per km2 in some areas. The average age of the population is under 18 years.
Agriculture
About 60 per cent of Eritreans depend on agriculture for food and income, although in 1999 the sector contributed only about 16 per cent to the country’s gross domestic product (GDP). Rainfed cultivation covers an area of about 417,000 ha, and an additional 22,000 ha are under irrigation. Farmland is often of poor quality, particularly in the highland areas where most of the population lives. Families are not well equipped to diversify their agricultural production and find other sources of income. They are particularly vulnerable to economic shocks. Since independence, Eritrea has not been able to produce more than about half of its annual food grain requirements of some 600,000 tonnes, even in years with good rainfall. Productivity is generally extremely low and few farmers can afford to buy fertilizers to improve the performance of their fields. Crop production is earmarked mainly for domestic consumption. In the highlands, farmers grow barley, wheat, teff, sorghum and millet. In the lowlands, millet and sorghum are priority crops. Extensive livestock breeding, mainly in the western lowlands, provides most of the value added in agriculture. In the past, livestock was exported to the Arabian Gulf, but such exports are currently suspended because they do not meet livestock health standards. Irrigated horticulture production is carried out along seasonal rivers. This sector is a potential source of extra income for poor families and would enable them to improve their food security. During the recent conflict, military clashes in northern Eritrea prevented planting of crops in the country's most productive region, causing food production to drop by two thirds. Because of recently erratic rainfall and delayed demobilization of farmers from the military, cereal production is considerably below normal. Although rainfall began to return to normal rates in 2005, an additional two or three good rainy seasons are needed to regenerate water tables and grazing lands. Recovery from drought will be slow, given the extreme poverty that has resulted from asset losses and economic strains over the past years. During drought years poor people are forced to sell their animals and other assets in exchange for grains and other foods.
Economy Economic growth was strong in the first few years after independence. The government embarked on a reconstruction and rehabilitation programme to develop infrastructure, improve food security and absorb returning refugees.
During the period from 1993 to 1997, the economy grew at an average yearly rate of 11 per cent. A major decentralization reform was initiated in 1996 to increase the effectiveness of public services.
From 1998 to 2000 the conflict between Ethiopia and Eritrea reversed these gains and severely hurt the country's economy. Military spending, fuel shortages and rising prices of consumer goods contributed to the decline of the economy. GDP growth fell to zero in 1999 and to -12.1 per cent in 2000. Military clashes in northern Eritrea have caused some US$600.0 million in property damages and loss, including losses of US$225.0 million in livestock. Despite the conflict, Eritrea managed to develop its transportation infrastructure by asphalting new roads, improving ports and repairing roads and bridges damaged by the fighting. The economy grew by 3.0 per cent in 2003, mainly as the result of a larger agricultural harvest and improvements in transport, construction and public services. The economic consequences of the war continue to limit development opportunities. The Ethiopian market, which used to absorb two thirds of Eritrea ’s exports before the war, remains largely inaccessible. The significant port fees that accrued from trans-shipment of Ethiopian cargo through Eritrea ’s Massawa and Assab ports have also been lost. Inflation continues to be a major economic problem, currently registering an annual rate of 15 per cent. The continuing no-war/no-peace situation and the priority given to military expenditures are slowing progress towards economic normalization. Remittances from Eritreans overseas, by far the largest source of foreign exchange, are expected to continue to decline.
Source: IFAD |
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