26 July 2018

Eritrea in New Bid to Woo Us Investors

Photo: Jacapo
A street in Asmara, Eritrea (file photo).

Eritrea is seeking to attract investments from the United States, a government official told private-sector executives in Washington on Tuesday.

"There has been a change of heart in regard to opening Eritrea to investment," Dr Woldai Futur, the director of Eritrean Investment Centre, said.

Dr Woldai was addressing members of the Corporate Council on Africa, an association representing US businesses active on the continent.

He cited agriculture, mining, tourism, fishing and infrastructure as sectors the Eritrean government sees as priorities for its new policy of enticing US capital.

His remarks are the latest signs that the rapprochement between Ethiopia and Eritrea is beginning to bear fruit.

Until the restoration of ties between the long-time rivals in an agreement signed earlier this month to end two decades of hostility since conflict erupted in 1998, analysts have likened Eritrea to pariah state North Korea noting that it is isolated both diplomatically and economically.

The one-party Asmara government also has an abysmal record on human rights with the United Nations having warned that the degree of repression could rise to crimes against humanity.

The UN imposed sanctions on Eritrea for the last nine years for supporting Somalia-based Al Shabaab terrorist group.

AGOA

The US also excludes Eritrea in its African Growth and Opportunity Act (Agoa) that offers duty-free access to countries in the programme exporting to America.

A US investor at the Tuesday meeting said Agoa eligibility was widely viewed as a benchmark of an African country's suitability as a destination for investment.

Dr Woldai said his country's exclusion from Agoa in the last 15 years was a political matter.

"Eritrea is a very misunderstood country in the United States, in government circles," he said.

"We were out of Agoa for reasons that we do not understand and for reasons that we cannot even accept," he said. "They were political reasons. We have no political problems with the United States, but the United States has political problems with us."

Mathewos Woldu, a former advisor to Eritrean President Isaias Afeworki and now a senior economist at the World Bank, seconded that position in his own comments at the Washington session.

"During the last two administrations [Barack Obama's and George W Bush's] Eritrea was looked at through the prism and lens of Ethiopia and not necessarily on the maximum of US national security interests," Mr Mathewos said.

Florizelle Liser, head of the Corporate Council on Africa and previously the top US government trade official for Africa, urged Eritrea to promptly make its case for readmission to Agoa so that it might achieve that certification of good standing by next year.

Incentives

The end of the bloody conflict that killed more than 80,000 people triggered by a dispute of the Eritrea-Ethiopia border in 1998 has been lauded internationally.

Swedish Foreign Minister Margot Wallstrom, whose country holds the presidency of the UN Security Council for July, said recently that she agrees with UN Secretary-General Antonio Guterres' view that if the reasons for the sanctions no longer pertain, they should be terminated.

UN monitors have been reporting in recent years that there is no evidence of Eritrea supplying aid to Al-Shabaab.

Sources say the Donald Trump administration could restore diplomatic relations with Eritrea after 20 years of recriminations.

Both Dr Woldai and Mr Mathewos said Eritrea has many incentives to offer US investors.

Dr Woldai however said tax breaks will not be part of the incentives on offer.

"The Eritrean government does not allow tax incentives," he said.

The country has a 1,000-kilometre coastline on the Red Sea, a strategic element in a volatile region, Dr Woldai pointed out.

"What people forget," added Mr Mathewos, "is that we live in a region that is prone to tribal conflict.

"Eritrea is the only country that does not have any religious or tribal conflict in that part of Africa."

The potential for economic growth in Eritrea is enormous, Dr Woldai added pointing out that before war erupted in 1998, the economy was growing at an average of 11 per cent, one of the highest rates in Africa, following its Independence in 1993.

Growth had slumped to about two per cent a year in the last two decades because "economically and socially, everything went to defence," he said.

Eritrea

Joint Press Statement Following the Visit By the Foreign Ministers of Eritrea and Ethiopia to Mogadishu Somalia, October 2018

The Foreign Minister of the State of Eritrea H.E Osman Saleh Mohammed and the Foreign Minister of the Federal Democratic… Read more »

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