Like the economies of many other African nations, the economy is largely based on subsistence agriculture, with 80% of the population involved in farming and herding. Drought has often created trouble in the farming areas.
The Real GDP (2009 est.): $1.87 billion, and the annual growth rate (2009 est.): 3.6%.
The Eritrean-Ethiopian War severely hurt Eritrea's economy. GDP growth in 1999 fell to less than 1%, and GDP decreased by 8.2% in 2000. In May 2000, the war resulted in some $600 million in property damage and loss, including losses of $225 million in livestock and 55,000 homes. The war also prevented the planting of crops in Eritrea's most productive region, causing food production to drop by 62%.
Even during the war, Eritrea developed its transportation infrastructure by asphalting new roads, improving its ports, and repairing war-damaged roads and bridges as a part of the Warsay Yika'alo Program. The most significant of these projects was the building of a coastal highway of more than 500 km connecting Massawa with Asseb as well as the rehabilitation of the Eritrean Railway. The rail line now runs between the Port of Massawa and the capital Asmara
