Eritrea Sells Luxury Houses to Earn Hard Currency

Source: China Daily  |  Location: Asmara, Eritrea

It may look like a truck park near Asmara’s Halibet Hospital on the edge of town, but the Eritrean government has other plans. Seeking to tap the hard currency held by the country’s vast overseas community, officials are promoting a large-scale housing project aimed at diaspora buyers.

Halibet Housing: Scale, Pricing & Target Buyers

The project’s website, halibet.com, describes 766 “new residential-style” two- and three-bedroom apartments with shopping centres and sports facilities. Prices range from US$97,000 to US$139,000—modest by London or New York standards, but far beyond the reach of most locals, whose average annual income is about US$130.

Glossy brochures are available through Eritrean embassies abroad. Payments are accepted in US dollars, euros, and British pounds, but not in nakfa, the national currency—a clear signal that the initiative is designed to attract foreign exchange.

Why Hard Currency Matters

According to the International Monetary Fund (IMF), Eritrea’s hard-currency reserves cover roughly one month of imports, forcing the government to find innovative ways to earn cash. “This economy lives off two things: diaspora and loans,” an Asmara-based analyst observed, adding that in 2003 Eritrea paid 50 times more for imports than it earned from exports.

The currency crunch stems from a collapse of trade with neighbours Ethiopia and Sudan, a fixed exchange rate, and the prevalence of off-channel foreign exchange transactions, the IMF notes. Reduced donor lending has compounded the pressure. Meanwhile, with the doctrine of self-reliance, Eritrea must fund essentials—food, oil, and arms—in hard currency amid rising global energy prices and lingering tensions with Ethiopia after the 1998–2000 border war.

Loans, Donors & the Diaspora’s Central Role

Loans have come from institutions such as the World Bank and bilateral donors including the United States, China, Italy, and several Middle Eastern countries. A sustained source of foreign currency remains Eritrea’s sizable diaspora in the United States and Europe.

Many expatriates donate to families of those killed in the war and pay a 2% income tax to qualify for certain privileges at home, including rights to buy housing and land. Yet analysts say these payments are declining as younger Eritreans’ ties to the homeland loosen, limiting contributions to a minority intent on maintaining financial links.

Private family transfers are another pillar. Economists estimated that remittances accounted for ~70% of GDP in 2003. Diplomats report a dip from US$462 million (2003) to US$420 million (2005).

Pride, Identity & Market Signals

Some Eritreans abroad still feel a duty to help. “As a kid, I remember EPLF delegates coming to update us on developments in the field… We were made aware that if we didn’t contribute, our political independence would be hijacked by surrounding countries,” recalled Senai Maesho, 39, while visiting Asmara.

For supporters, the Halibet project symbolizes a young nation proving itself, not merely a cash-strapped state scrambling for foreign exchange. The country representative for the project’s South Korean contractor, Keangnam, offered a bullish update: “They’re buying, paying money, registering,” said Nam-Hun Kang. “Very promising.”

Reporting reference: China Daily

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This snapshot captures how diaspora capital and real estate projects intersect when a country must earn every dollar it spends.

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