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Why is Eritrea's Economic Boom Being Ignored by the IMF?

In a sign of a growing economy, even rural Eritrean towns are experiencing new development projects. Picture: Tesseney, Eritrea

Why is Eritrea's Economic Boom Being Ignored by the IMF?

These days, it's hard to deny Eritrea's economic boom. With gold production in the Koka and Zara mines set to commence, and the Bisha mine producing copper, it's easy to see why the Economic Intelligence Unit (EIU) believes Eritrea will have the 3rd fastest-growing economy in Africa and the tenth fastest in the world in 2014.

Perhaps a telling sign of the country's fast growth is the rise in multi-million dollar infrastructure projects being developed. Some of these projects include the constructions of two modern colleges in Mai Nefhi and Hamellamo; Dahlak Kebir's Master Plan project worth US$115 million; construction of 1,680 modern homes and shops in Asmara; and similar housing projects in other cities that are slated to start next year.

This upcoming year the Government of Eritrea (GoE) believes the economy will grow between 7-10%, while the Economic Intelligence Unit and African Development Bank (ADB) have forecasts of 8.0% and 6.5% respectively.

But not everyone believes Eritrea's economy is growing at these impressive rates. The International Monetary Fund (IMF) seems to think the country's economy is barely growing. This year the bank foretasted the country's GDP to grow by a measly 1.1% and for 2014, it's only marginally better at 1.9%.

For most Eritreans, these low figures are surprising. To try to make sense of it, some observers have suggested since Eritrea is the only African country to reject IMF loans, that these low figures are intended to discourage other developing countries from making similar moves. While this claim may certainly be playing a factor, the most plausible explanation has to do with one Ethiopian man.

Abebe Aemro Selassie, who formerly worked for the Ethiopian government, is the Deputy Director in the IMF’s African Department who is also tasked with providing the IMF's Regional Economic Outlook for sub-Saharan Africa. In essence, he is the man who is providing these GDP statistics for Eritrea and Ethiopia. Not surprisingly, since starting his job, GDP forecasts for Eritrea have been very low, while those for Ethiopia have been very high.

Abebe's influence isn't confined to the IMF. These statistics are cited by a number of economic professors, journalists and by the World Bank. In a competitive global economy, this could influence potential investors down the line from seeking to do business in Eritrea if they read these biased forecasts and conclude the economy is struggling even while producing expensive minerals to the international market.

To allow a former Ethiopian government official to work for IMF's Regional Economic Outlook is a glaring case of a conflict of interest to say the least. Abebe's hiring only underscores why the Eritrean government is right in keeping its distance from a bank long known for shackling developing countries into crippling debt.

Despite these politically motivated forecasts from the IMF, Eritrea is a country where all the stars appear to be aligning at the same time, and the East African nation could be set to be one of the biggest African economic success stories of this decade.

Eritrea's annual GDP forecasts for the last three years


Sources: GoE, EIU, ADB, IMF

Abebe Aemro Selassie is a former Ethiopian government official who is tasked with providing
IMF's economic statistics for Eritrea and sub-Sahara Africa.

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Why is Eritrea's Economic Boom Being Ignored by the IMF? Reviewed by Admin on 7:52 AM Rating: 5


  1. where is the growth ? With poor infrastructure, poor sanitation, poor social services and almost 100% unemployment how can you justify growth. unless the people's life is improved, no matter how much revenue you squeeze from the mining sector you can not talk about growth. The revenue of the resources of the nation are spending for other political purposes not for the benefit of the social. Our people deserve, services of electricity, pure running water, internet services, and so on. However, none of them is now available for this good people who sacrificed every thing he had and is betrayed by his own group of country men. Stop blaming others for your won weakness and try to concentrate what is good for your people then the facts will talk for themselves. It is unfortunate to see the government of Eritrea is keep blaming others instead of recognizing his weak side and work on it boldly.

    1. I agree with you ambabi hawey. Nehna ezom burkate hizbie zeye edena tefdiena. Dehan gena lewetie nayzom burkatne hubnatne xebukaten hizbey keribu eiu. Ajona ajokum hizbey hji ewen semirena nezome zeskyuwa zelwu ne hagrena zeynkwene aykonane.

  2. Nearly all of your claims are false or greatly exaggerated. I don't know if you're trolling or just lacking basic facts about Eritrea or you're just another angry Ethiopian (I think you're Ethiopian). But I'll break down your nonsense so others can learn from this.

    1) Eritrea has one of the best social services in Africa. Eritrea has virtually free health care, free education and provides certain medicines for free. The fact that you said Eritrea has poor social service makes me believe you are not Eritrean.

    2) In comparison to its neighbors, Eritrea's unemployment rate is pretty low. Saying Eritrea's employment rate is nearly 100% shows that you're way off or are just trolling.

    3) Electricity is close to 100% and will be 100% perfect within two weeks. You don't have to believe me, a simple phone call to Asmara will show you electricity is nearly 100% perfect. Or, you can go on twitter and see many tweets being made by Eritreans in Eritrea. From a regional perspective, Eritrea's electricity supply has been one of the best. Sometimes you have off and on prolonged outages, it happens. Look at Ethiopia for example, they've been experiencing prolonged power outages since June. It's actually the norm over there.

    4) Sanitation in Asmara is not an issue. This is a city known for its cleanliness. May be in the rural areas, but you can say that about every country.

    5) The Eritrean government did not blame anyone here. This is not a government website. Where are you getting this info? It's like you're making things up then using these made up things to argue for the sake of arguing.

    6) Eritrea is on track to reach 7 our 8 UN Millennium Development Goals. Currently, it's one of two countries on track to do so. I'd say the people's lives have greatly improved. The economy booming is just a plus.

    7) The running water issue, although I could be mistaken, has to do with aging pipes. It's being fixed one neighborhood at a time.

    Anyways, the economy is booming. You are in denial. For some people, positive news about Eritrea seems to hurt them. You sound very hurt; upset even. In my honest opinion, you're an Ethiopian troll.

  3. 100% unemployment? Really? Ambabi is clearly an Ethiopian. Please delete his absurd comment as I'm sure many soccer moms reading about Eritrea may think he is actually talking about real issues when he's making most of the stuff as he goes.

  4. So stupidity of them to do this report & try to blame the guy. I don't think that IMF are so stupid to put some official guy of the opposition government that have problems with Eritrea to give this kind of country research which allow investor to come over.... Come on give me a break to whom ever wrote this stupid report. get real & say that the economic of Eri isn't going up next year with all the undergoing multi million project that's on hand.

  5. Habtom stop bullshitting, Ambabi thank you for your comment and I do believe every word is correct and I salute you.

  6. Hey hawina, I don't think & believe that you been or lived in Eritrea to say what you just said. stop telling me that you call or watch eri tv.

    let me go with you points by point cuz you really sound funny at so many points.

    1- Social service - Eritrea has one of the worst social service not in Africa but in the world. where you going to do it for so many years. Free Education & Health care is a must do for any government in the world. Plus the Health Care is the worst & no medicine is available in Eritrea....did you know that your Dr. first question after he check you up "do you have relative out side eri to send you the medicine?'' that's is the health care in Eri.

    2. Part of the first point (Social service) the government jobs that you will work for them with a zero YOY grown salary (500nakfa). such as (Teacher, waiter, clark.... etc) no matter what you graduated they will put you where they see it good for them. So if you graduated as IT you will work as English teacher in some adi school for 3 years(social Service) if your lucky. The unemployment part its not 100% but a very scare number is there.

    3. Electricity been a pain in ass for years & don't tell me two weeks will be done with 100% coverage brother, Eritrea is too late for that. There is so many part of the city of Asmara is working on generator till now. almost 80% of hotels are generating the electricity. So please don't even comment on this

    4. Sanitation been so good for so long that it wasn't even built by the government its well known the Italian who did that of Asmara
    5.this is a personal issue point lol am not in it
    6. Eri on track I would love to see that or at least read about it in a real documents that comes from the UN
    7. It's been more than 20'years for the government can't they now been done with the water issue with all the neighborhood of all Eritrea. Please when you try to reply to something be realistic about it.
    I just wish that you would live the life of a real Eritrean in Asmara as a middle class guy & know & see what is it like of living in Eritrea. so telling or writing about something that your not in it.

  7. Ambabi, I beg to differ, because, it is not Ethiopians rather its regime supporters going overboard as usual. 100% unemployment means no one is working in Eritrea we don't have to refute that as there can not be a country were everyone is unemployed the reader can readily recognize it. . ,Eritrea is a country that is one of the handful of Nations that has met UN's own millenium objectives, while under UN sanctions that is based on lies provided by the US? but if your wondering why the trollers resort to wild fabrications only expose the desperate and bankrupt nature of all the ill wishers who are allergic to an African success story that is based on self reliance.

  8. ppl beware of Ambabi. He is Ethiopian. I remembered back in the day when we were participating in Asmarino chat room, he said "a dead fish and a dead Shaebia are the same."

  9. Hey Zak and the rest,
    you have some good points but your first point is completely wrong. People sometimes don’t realize how things are run in this world, there is no such thing as "Free". There is always a price behind anything you do, say or give. That's why it was the best decision ever not accepting and funds and loans from the IMF/ World Bank anymore, because the IMF is like a drug dealer, by braking up the relationship you hurt yourself in the first place but in long-term you will benefit (everybody has another view on that. If you take a step back and see the bigger picture of how the world is running and by whom, you will figure it out.

    Healthcare and Education is never free. You pointed it out as "Free Education & Health care is a must do for any government in the world", well i guess you are well educated and know how the system works in Europe or the Unites States. In Europe you have to pay a monthly rate to your health insurance company and on top of that the government takes a huge tax cut on your paycheck. So you can imagine now that health care is not for free it is expensive and if you look to the US, they even have to pay more.

    The thing about the medicine is that it is very expensive, even in Europe. The good thing some European countries have, is that they protect the people of paying for overpriced medicine by law enforcement (If you google it you will find it). The pharma industry is the one to blame on the high prices, because they dont want to sell it cheaper to poor countries, due to research costs and
    so on. So you can imagine that such a small country like Eritrea does not have the position to aruge with such pharma companies, which a backed by the government of their countries. From the business and economic standpoint i
    could go deeper but i guess you understood what i wanted to say on this point.

    On your Education point, well High school is for free that’s more less about it. Parents have to pay for the Kindergarten and later on in "most"
    (not all) European countries for the higher Education as well.

    I agree on your second point, they could have done way better there. It’s a shame losing a talent.

    Your third point is right as well, Eritrea has a problem with electricity shortage. But as you know such things are long-term projects and connected with a high investment. You are also aware of the sanction Eritrea has to face. So by facing such a sanction, companies in Europe, North America and Asia, are not willing to provide Eritrea with the needed goods. The point is that those companies are afraid, they could use the goods for other reasons e.g. you can more less use such stuff as a weapon, and anything which also can be used as a weapon is not allowed to be shipped to Eritrea from countries respecting the sanctions. Politics and business is connected very very close, so now you can figure out why it is so hard to repair those transmissions.

    Well on your point six, i would be careful of what you wish for. The UN will never write a good article about Eritrea itself and its economic situation. You just have to look into, who has the power in such organizations and who pays them the most. You can compare it with Standard&Poors, Fich or Moodys, ratings are made by $$$$.

    I dont want to take any side by writing this, but I want you and the others just to see the world in a bigger picture, how things are done and what the
    price of freedom is, the world never wanted to give you in first place.
    I hope by replying to you, this was realistic enough.

  10. Eritrea is very far from the IMF and it should stay that way.

  11. Fact is fact but it is hard to swallow. Go get a nap it will help you to wake up

  12. You are just throwing numbers with out supporting you claim. Where the hell did you get all your information ? I assume from Dedebit land !!!!

  13. Unless you are fool, economy 101 teachs us that ther is no 100% employment nor there is 100% unemployment. But I know one thing, Dedebit are always Dedeb

  14. IMF: an issue of sour grapes? Hahaha...U haven´t seeing anything yet. U people have to pay for all the misery U´re part of in Africa and around the world.

  15. Ambabi it's all in your rusty mind, if you are a real nationalist, be a faithful opposition if you know what it means

  16. We don't need praise from corrupt establisment run by crooked individuals. We want to make Eritrea great so her people can enjoy a good standard of living and that is all that matters.

  17. Hey Madote when i wrote madote it seems to me mad!!!!!!!!!!!!!!!It is clear that what is going to write and add to the index what is eritrea achieved in terms of economic growth. We are going to backwardness rather than development which is what I said is truth.We are in state of backwardness.Finally I can concluded that this website driving by PFDJ ruling party

  18. Mr. Ambabi,

    Y’selam. 100 %, employment? poor infrastructure? Our people deserve, services of electricity, pure running water, internet services, and so on.
    Are you F.......out your mind? Have you been to Eritrea? Ya– Mejnun? If you cannot read well, you can't be "Ambabi" . You are just reisi Akat ( Akat Head) if you know what Akat means and you call yourself Ambabi? 100% unemployment, what planet do you live?

  19. Ambabi how much did you get paid is your haouse rent payed you must be one of those ERITREAN SELLOUTS who live by the donation from U SA

  20. This so called Ethiopia, a Bantu nigger breeding wasteland has been an "Uncle Tom", the "spoiled child of the superpowers", and for how long do we Eritreans have to take this endless abuse laying down? The name Ethiopia should be erased from the face of the world and the land should be broken to pieces and Oromo, Ogaden, Agame, Shewa and Gambela should be given their sovereignty as independent nations, divide and weaken it, "tear down Uncle Tom to pieces" so that Uncle Sam will loose its "House Nigger". As for the IMF, please click on the link and watch this eye opening story about this international mafia called the IMF.

  21. Ambabi, you sound like a hopeless agame, weak up from your deep sleep and learn from your neighbor eritrean instead of reading white man fiction. Eritrea ought to stay away from this blood sucker institute lMF.

  22. Perfectly spoken! I got nothing to add on that!


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