African business, politics and lifestyle
Mining and free trade in Eritrea
Eritrea’s President Isaias Afwerki has guarded his country jealousy since independence, pushing a self-reliant attitude that encourages Eritreans to rebuild Eritrea for themselves.
But in order to develop the potentially lucrative mining and trade sectors, he will have to open up the country more to foreign money and therefore possible foreign influence.
The government intends to launch free trade zones at its main ports in Massawa and Assab on its Red Sea coast, and dozens of firms, including from China, India and Dubai, have already registered to operate there to take advantage of the bustling cargo shipping lanes.
Reserves of gold, zinc and copper have been found in Eritrea and analysts are predicting a mining boom. Fourteen foreign firms are exploring in the country and the first project is expected to start producing gold by late 2010.
“We believe mining will play an important role in boosting the economy and the government is committed to develop it,” Alem Kibreab, director-general of mines, told Reuters Africa Journal.
The authorities want the sector to be developed slowly and carefully to prevent the so-called “resources curse”, where oil and minerals have spawned and corruption violence in Africa.
After the long struggle for independence from Ethiopia and subsequent border dispute, expectations for the development of the economy to support the population of 4 million are high – although Afwerki says the mining sector is no magic solution.
“Let’s not be misled that this gold is going to change everything and let’s not be relaxed,” he said. “Getting relaxed and trying to rely on, or at least anticipating to heavily rely on this resource may be crippling.”