Eritrea Investment Conference
BY: Berhane
Woldu
Eritrean Investment Conference was held in Asmara,
Eritrea at the Asmara Palace Hotel for two days and development sites excursion
to Central and Gash Barka regions on the third day. There were investors from
different parts of the world, the Americas, Asia, Australia, Europe, Middle
East and 22 countries from Africa. The Eritrean Investment Center presented the
goals and objectives of the Eritrean Governments economic growth and
development objectives. It stated,
“Eritrea’s objectives are to establish a dynamic and
self-reliant economy with equitable distribution of benefits and Public and
Private Partnership that bring about wider participation of nationals in the
process of economic development. To facilitate and enhance an effective
nation-wide saving-investment mechanism that links savers and investors at home
and the Diaspora.”
Furthermore, the conference gave details on ways that
the nationals can be part of the economic development by directly investing in
new ventures or by buying shares in the existing profitable corporations such
as Eri-Tel, National Insurance Corporation of Eritrea and more.
The conference elucidated on the Societal and
Economical climate of the country; Peace and security are the main pillars of a
true and conducive investment environment in Eritrea. The economic policy
underlines the necessity of having inclusive market-led economic system,
responsible to the economic values of the country and respectful of the rule of
law. The private sector should have the upper hand in all economic sectors with
the government to intervene in major public shares. The private sector is seen
as the major development partner, an engine of growth that will help jump start
the economy and eventually lead to long-term growth in the Governments
development agenda- as explicitly indicated in the Macro Policy document
(1994). In line with the macro-policy objectives, a revised investment code was
issued in 1994. The main objective of the investment code is to promote
investment in Eritrea
as well as develop and use the country’s natural resources and expansion of
employment opportunities (GOE, 1994: 5). Moreover, all areas of investment are
open to all investors both foreign and domestic (GOE, 1994:6).
In the mid-1990s, the government began major
investments in infrastructure, roads, electricity, dams, and port operations to
support the further development of its economy for domestic consumption as well
as export. According to the Investment center conference Eritrea has many
economic sectors that offer investment opportunities with higher than normal
rate of return such as the Agriculture and Agro processing, Fisheries and fish
processing and marketing, Tourism and Hospitality Industry, Mining of precious,
industrial and construction minerals, Financial services, Housing,
Manufacturing, Energy, Transportation and Foreign trade. Key investment
opportunities in the fisheries sub-sector provide a potential of 90,000sq.km of
fishing ground, and other marine produces. The Agro- manufacturing sector
produces a variety of products with particular emphasis on processed food and
dairy products leather goods.
The
conference participants mentioned many questions and concerns. The questions
were; the availability of foreign exchange, shortage of housing in Asmara,
sectors of viable investments, domestic market conditions, buying power, fair
pricing of commodities, availability of farm equipments and logistics and
fishing industry as a viable industry.
The minister of Marine and Agriculture gave detailed
information on their experiences specially the time of no peace no war and the
structural adjustments that were made due to the foreign conspiracy to hold the
economy hostage. Both officials stated that Eritrea’s share in domestic and
International agriculture is low. There are no exports of high-value added
agricultural or agro-based goods, but domestic and global demand for these
products is dynamic and will continue to increase. Therefore, growth based on
the development of agro-based industries is the way to go to promote
sustainable development and resource based growth. There is high demand for
fish which is the most dynamic commodity in world trade and has high unit
value. Nevertheless, this requires substantial capital investment in upgrading
infrastructure and domestic capabilities. The sanitary standards, trace-back
systems and technical requirements with respect to packing and labeling
constitute important restriction export to the international market. Export of
high value products such as meat and meat products; dairy, fish products,
vegetables, fruits and nuts are dynamic and their growth rate is high. The
government of Eritrea
has been working hard to help in the development of dynamic production groups,
by building infrastructure, technical upgrading, establishing business services
and export assistance to the private sector. Hence, understanding domestic
potential and endowments Eritrea’s realistic strategy for sustainable economic
development was based in finding opportunities within the primary agriculture
and natural resource based sector generating spillovers to other sectors.
The last agenda of the conference covered the housing
deficit problem. Estimates vary but demand for housing reveals that the Asmara
housing deficit is high. There was consensus over the obstacles to prompt
property development. The high cost of imported building materials, low-income
levels, undeveloped local building material industry and inadequate long-term
finance. Although revenues are only now beginning to reach the government
coffers, small builders have already begun to invest in new housing
developments in anticipation of the impact of economic development. Asmara’s
huge, but delayed plans for housing will result in transformation of the
country’s property stock in urban areas. The government of Eritrea is to ensure
that both the public and private sectors combine forces to bridge the housing
deficit within a short time by building mass development.
In summation, the conference highlighted the
opportunity to construct a dynamic and self-reliant economy with equitable
distribution beneficial to the Public and Private sectors based on partnerships
that brings about wider participation of nationals in the process of economic
development.
Received on Tue Sep 04 2012 - 13:18:45 EDT
