With independence from Ethiopia on 27 April 1993, Eritrea faces the bitter economic problems of a small, desperately poor African country. Most of the population will continue to depend on subsistence farming. Domestic output is substantially augmented by worker remittances from abroad.
Government revenues come from custom duties and income and sales taxes.
Eritrea has inherited the entire coastline of Ethiopia and has long-term prospects for revenues from the development of offshore oil, offshore fishing and tourism. For the time being, Ethiopia will be largely dependent on Eritrean ports for its foreign trade.