Housing Finance in Eritrea

Overview

This profile is also available in French here.

To download a pdf version of the full 2021 Eritrea country profile, click here.

Eritrea is a Horn of Africa country with its largestcityAsmara, known for its famous Italian colonial architecture. The country borders Djibouti, Ethiopia, Sudan, and the Red Sea, thus strategically located along major world shipping lanes. Eritrea has a population of 3.6million, a growth rate of 2.35%, and a very high fertility rate of 4.13 births per woman as of 2019. The high fertility rate is accounted for by improved life expectancy of 39 to 60 and a significant drop in child mortality rates due to improved health care. However, for the last 30 years, Eritrea has borne the brunt of the border conflict with Ethiopia and the authoritarian rule of its founding President Mr.Afwerki, which has led to considerable migration and displacement. Eritrea has been referred to as a “diaspora nation” since close to half of the population lives in the diaspora.

The country has one of the lowest urbanisation rates in Africa (35.8%compared to its neighbor Djibouti at 78.0%). There are minimal job or business opportunities in the urban areas, which is a disincentive for rural-urban migration. With a low urbanisation rate and high emigration, Eritrea does not suffer the severe shortage of housing in urban areas that most African countries do. Nonetheless, the country faces major challenges in housing and urban development including poverty, a shortage of skilled labor, lack of building materials, and inadequate institutional capacity to provide inputs critical for housing development.

The country’s 2020 real gross domestic product (GDP)was expected to drop by 0.6%relative to the growth of 3.8% in 2019 due to locust invasion coupled with effects of COVID–19 pandemic which curtailed economic output during the year. While COVID–19 aggravated Eritrea’s economic decline, the decline in economic performance has largely been blamed on the country’s overdependence on mostly rain-fed agriculture, which accounts for one-third of its GDP. The African Development Bank (AfDB)observes that private consumption, investment as well as net exports were depressed in 2020, which further explains the decline in economic growth. Inflation in 2020 stood at 4.7%compared to deflation of 16.4% in 2019 partly due to disruption of regional and global supply chains induced by COVID–19. Broadly, while Eritrea has not suffered severely from COVID-19infections,disruption from containment measures and the impact on the global and local economy will likely hit the country in the short term.

Find out more information on the housing finance sector of Eritrea, including key stakeholders, important policies and housing affordability:


Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2021 edition, which has up-to-date profiles for 55 African countries.

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