The private sector dominates manufacturing, which provides domestic demands such as food processing and consumer goods. Most inputs are imported and there is little value added or export orientated industry. Lack of raw materials and foreign exchange is a hinderance in the long term to further growth. A skilled work force is a necessary aspect of development in this field, and one in which Yemen is attempting to improve. Most teachers are recruited from overseas, but there is a new emphasis on institutional training linked to the demands of the labour market which require greater skilled labour.
Government revenue is received mainly from customs duties and oil profits.
On unification of the north and south, large public deficits and interest rate payments lead to financial instability. The financing of the deficits by borrowing from the Cental Bank has created inflation, current account deficits and an overvalued exchange, thereby reducing important receipts from customs tax. The small export base is offset by remittances from Yemen workers overseas, principally in Saudi Arabia, though this situation is volatile and dependent upon the political and economic environment in the host countries.