Eritrea’s Economy Has Collapsed: Beyond the U.S. Investment Report!

The Eritrean dictator’s mouthpiece, Yemane Gebremeskel, is furious over the recent U.S. Investment Climate Statement, which assesses the advantages and disadvantages of investing in different countries. The report described Eritrea as chaotic and unstable, concluding it is “not conducive to U.S. investment.” Though damning, it still portrays Eritrea as if some sort of “command economy” exists.

Yemane Gebremeskel dismissed the report for its alleged inaccuracy, bias, and outdated methodology. Ironically, he’s right about one thing — the report is outdated. It fails to capture the full extent of Eritrea’s economic collapse. If it reflected the current reality, it would be far more damning than anything Washington could write. The U.S. Investment Climate Report uses standardized measurements — but in Eritrea, no such standards exist. The dictator runs the economy like his own private old cashier.

The truth is brutally simple: Eritrea has no economy left. The dictator has buried Eritrea’s economy deep underground. If he ever opens the country, inflation would explode beyond anything the world has seen — worse even than Venezuela, which at least has natural resources. He controls the exchange rate by force, not by economics. The dictator alone is sustained, propped up by Chinese-owned mines built on slavery and remittances from exiled Eritreans. Everything else has crumbled to dust.

At the Hirgigo Power Plant, only two of the four generators are operational, producing a total of 23 megawatts, and one is only at 50% capacity.

Thanks to the dictator, Eritrea faces one of the most desperate crises of energy and water in the world — the twin pillars of any modern economy. The Hirigigo power plant produces a mere 47 megawatts, barely enough to power a small town, let alone a country. The four diesel engine generators fueled by heavy oil in Hirgigo I — only one is operational, and it runs at 50% capacity, producing about 12 MW. The two engine generators in Hirgigo II, donated by Saudi Arabia as aid in 1997–1998, are barely operational, each producing 23 MW, though they are now quite old.

Electricity in Asmara comes sporadically, often only at night. Outside the capital, the grid has collapsed entirely. Rural Eritreans live without electricity, relying on firewood and human labor. Factories have gone silent, hospitals have gone dark, and families live in blackouts.

Water access is equally catastrophic. Water is extremely expensive. The water pipeline network that once operated is now broken, and water is distributed by tanker trucks. In Asmara, families need special government permission just to access water for family events. Corruption has consumed the entire system: without connections or bribes, people simply go without. The Italian colonial administration — a century ago — provided far more reliable water than the Eritrean dictator does today. The Italians built reservoirs, ice factories, and distillation plants to serve industries and agriculture.

People in Asmara often have to wait for hours — sometimes even through the night — so they don’t miss the arrival of the water tanker truck that distributes water.

The availability of cheap water was a key factor in the successful industrialization of Eritrea. They made sure Asmara and Massawa thrived. Italian agricultural products included sisal, cotton, and grains, while industries such as meat packing, flour milling, and potash mining thrived. Even during the Derg regime, Eritrea contributed one-third of Ethiopia’s industrial exports. Eritrea never experienced water shortages like today. Under Isaias, everything has decayed or disappeared.

The banking system is another sign of total collapse. People are allowed to withdraw only 5,000 Nakfa per month (around $300). That’s barely enough to survive, let alone invest, save, or run a business. The country has no private sector, no liquidity, and no trust in the regime that survives only through fear, coercion, corruption, and deception. Eritrea is effectively operating on a barter economy where connections and corruption replace cash.

The collapse of infrastructure has crippled even the simplest aspects of daily life. For example, two major roads built by Italy—linking the peripheries of Akeleguzay and Seraye—have completely deteriorated. Fuel shortages are so severe that vehicles break down, spare parts are unavailable, and roads have become impassable. Travel is so difficult that even families hesitate to attend the funerals of loved ones in the periphery to bury their dead.

Ports, once Eritrea’s greatest strategic assets, are no better. Assab Port is completely nonfunctional. Massawa Port, old and unrepaired, barely operates. It is mainly used for the mining sector. Due to a lack of power and mismanagement, it can take up to six months for a single shipping container to enter, be inspected, and exit. Eritrea — a nation blessed with two ports — now effectively has none.

The small port of Massawa, mainly used for the mining sector, takes at least two months for a single container to be processed and exit.

And yet, the dictator dares to blame Prime Minister Abiy Ahmed for “looking at Asab,” when he is the one who destroyed the port. At least Abiy understands its potential, unlike the dictator who turned Eritrea’s once-strategic gateway into a ruin. In his letter to the UN, Abiy reaffirmed his respect for Eritrea’s sovereignty and territorial integrity. There is nothing wrong with Ethiopia using Eritrea’s port peacefully.

Basic goods have practically vanished. Food is especially scarce: there is no milk, no meat, no eggs, and sometimes only expired maize oil can be found in the markets. When items are available, the prices are unbearably high. For example, a tray of 24 eggs costs 150 Nakfa ($10) — the same as in Israel. But while an Israeli worker can earn that in one hour, an Eritrean must work at least three full days just to afford the same eggs.

A single meal of meat (Tibsi) costs the same amount, making restaurant dining impossible. This is compounded by the risk of foodborne illness, as most restaurants have no electricity for refrigeration, leaving meat and other perishables unsafe. Most families can barely afford to cook at home unless they receive remittance support from relatives abroad.

Eritrea is a country where survival — not prosperity — is the daily struggle. There is no internet, no electricity, no fuel, no transport, no industry, no water, no food, and no hope. In today’s world, even the poorest nations can rely on the internet as a lifeline for innovation and opportunity. But in Eritrea, there is literally no internet. The few tourists fortunate enough to receive a visa have documented the harsh reality: hotels lack running water, no air conditioning, and no internet — “You come to Eritrea,” they say, “if you want to disconnect completely.”

But despite its collapsed economy, Eritrea stands out as the only state in Africa that survives without foreign aid. It has virtually no crime, terrorism, or war, faces no internal or external existential threats, and maintains an independent foreign policy. This stability is due to the indigenous, overwhelmingly majority Tigrinya nation, highly homogeneous and without tribal or clan structures. Paradoxically, this stability allows the dictator to destabilize neighboring countries, even with an economy in ruins.

No one — but only the Aggaiazian Movement and its Industrialization, Urbanization, and Digitalization Project — can revive the economy from its grave. For more information, visit the website at this link: https://www.disruptor-nation.com/

If the U.S. Investment Climate Report is flawed, it is because it fails to capture that Eritrea is not merely “not conducive to investment” — it is uninhabitable for normal life. A country that once exported industry, manufactured goods, and agricultural products now exports only its people fleeing a brutal dictator.