Only the people can do that,” Mehari told VOA’s Tigrigna service. “The government cannot develop the economy. That’s a trap many other countries have fallen into that generally leads to economic failure, Mehari said. Tesfa Mehari, a professor of economics in England, said the Eritrean government wants a state-owned economy. The government also imposed financial restrictions, including limits on the amount of cash that could be withdrawn from bank accounts or kept in private hands, according to multiple reports.īusiness owners complained about the restrictions, and reports from inside the country indicate the rules have altered Eritrea’s black market exchange rate, which affects the price of many goods. In 2015, Eritrea mandated that citizens exchange all notes of the currency, the nakfa, for new notes. The government has taken other steps in recent years to reassert control over the economy. Most of the affected businesses operate in the hospitality sector, according to the announcement, and they will remain closed for up to eight months, depending on the severity of the violations.Ībout 58,000 private businesses operate across the country, according to the government less than 1 percent was affected by the recent closures. 29 editorial published by Eritrea’s Ministry of Information on the state-run website. The closures were a response to companies hoarding cash and “failing to do business through checks and other banking systems,” according to a Dec. Eritrea has temporarily shut down nearly 450 private businesses, the latest in a series of moves that has sent shockwaves through the economy of the Red Sea nation.
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