2015 Index of Economic Freedom


overall score38.9
world rank174
Rule of Law

Property Rights10.0

Freedom From Corruption20.0

Limited Government

Government Spending71.8

Fiscal Freedom57.0

Regulatory Efficiency

Business Freedom18.2

Labor Freedom65.5

Monetary Freedom57.8

Open Markets

Trade Freedom69.2

Investment Freedom0.0

Financial Freedom20.0

Embed This Data

Create a Comparison Chart

See how Eritrea compares to another country using any of the measures in the Index.

Download PDF
Quick Facts
  • Population:
    • 6.3 million
  • GDP (PPP):
    • $4.5 billion
    • 1.3% growth
    • 4.6% 5-year compound annual growth
    • $707 per capita
  • Unemployment:
    • 8.9%
  • Inflation (CPI):
    • 12.3%
  • FDI Inflow:
    • $43.9 million
Embed This Data

Eritrea’s economic freedom score is 38.9, making its economy one of the most “repressed” in the 2015 Index. Its overall score is 0.4 point better than last year, with improvements in labor freedom and the control of government spending offset by declines in freedom from corruption and business freedom. Although Eritrea has recorded its highest economic freedom score ever in the 2015 Index, it is ranked 45th out of the 46 countries in the Sub-Saharan Africa region and remains the world’s fifth least free economy.

Located on the Red Sea and with a burgeoning mining sector, Eritrea has experienced a half-decade of strong GDP growth that, along with more prudent spending and a slightly more stable monetary outlook, has led to a modest increase in economic freedom. However, improvements have occurred in only three of the 10 factors.

Over the past five years, scores have declined in the areas of corruption, taxation, and labor policy, further burdening an already weak institutional framework. An oppressive central government controls investment and the financial sector and distorts prices. Corruption is endemic. The judiciary is highly politicized and fails to check government expropriations of private property.



Isaias Afwerki has ruled this one-party state since 1993. According to a U.N. report in 2014, 4,000 Eritreans flee every month because of government repression. Eritrea is subject to U.N. military and economic sanctions for supporting armed opposition groups in Horn of Africa countries. Border conflicts persist between Ethiopia and Eritrea. Although Eritrea is one of Africa’s faster-growing countries in percentage terms, growth in absolute terms is relatively meager. Copper and gold are important exports, but military spending drains resources from development of public infrastructure. An estimated 70 percent of Eritreans cannot meet basic food needs, and the government declines international food aid. Roughly three-quarters of Eritreans depend on small-scale agriculture and fishing, and up to two-thirds reportedly rely on government assistance.

Rule of LawView Methodology

Property Rights 10.0 Create a Graph using this measurement

Freedom From Corruption 20.0 Create a Graph using this measurement

The autocratic regime of the president and his small circle of senior advisers and military commanders is widely considered to be one of the world’s most repressive. Corruption is a major problem. The politicized judiciary, understaffed and unprofessional, has never ruled against the government. Protection of property rights is poor. The state has often expropriated private property without notice, explanation, or compensation.

Limited GovernmentView Methodology

The top individual and corporate income tax rates are 30 percent. Other taxes include a controversial 2 percent levy on the Eritrean diaspora. The overall tax burden equals 50 percent of the domestic economy. Government expenditures equal 30.7 percent of domestic income, and public debt is larger than the size of the economy at over 125 percent of gross domestic product.

Regulatory EfficiencyView Methodology

Cumbersome procedures and high compliance costs continue to be impediments to business formation. In the absence of private-sector employment opportunities, an organized labor market has not emerged. Existing labor regulations are outmoded and create challenging barriers to hiring. Monetary stability remains weak overall. Subsidies and price controls have been a core feature of the country’s command economy.

Open MarketsView Methodology

Eritrea’s average tariff rate was 5.4 percent as of 2006. Importing goods can be a time-consuming process. Eritrea’s economy is dominated by the state and provides a difficult environment for foreign investors. The financial system remains very underdeveloped. All banks are majority-owned by the state, and private-sector involvement in the system remains limited.

Country's Score Over Time

Bar Graph of Eritrea Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Eritrea to other economic country groups Download Charts

Regional Ranking

rank country overall change
3Cabo Verde66.40.3
6South Africa62.60.1
13Burkina Faso58.6-0.3
14Côte d'Ivoire 58.50.8
19The Gambia57.5-2.0
24Mozambique 54.8-0.2
29São Tomé and Príncipe 53.34.5
36Sierra Leone51.71.2
41Central African Republic45.9-0.8
42Democratic Republic of Congo454.4
43Republic of Congo 42.7-1.0
44Equatorial Guinea40.4-4.0
See Entire Region List ›

View all countries ›

Back to Top