Eritrea: Foreign Direct Investment, percent of GDP

The latest value from 2011 is 1.89 percent, a decline from 5.73 percent in 2010. In comparison, the world average is 9.37 percent, based on data from 187 countries. Historically, the average for Eritrea from 1992 to 2011 is 2.86 percent. The minimum value, 0 percent, was reached in 1992 while the maximum of 12.08 percent was recorded in 1999. See the global rankings for that indicator or use the country comparator to compare trends over time.

Foreign direct investment in Eritrea and other countries reflects the foreign ownership of production facilities. To be classified as foreign direct investment, the share of the foreign ownership has to be equal to at least 10 percent of the value of the company. The investment could be in manufacturing, services, agriculture, or other sectors. It could have originated as green field investment (building something new), as acquisition (buying an existing company) or joint venture (partnership).

FDI is reported on an annual basis, i.e. how much new investment was received in the country during the current year. It typically runs at about 2-3 percent of the size of the economy measured by its gross domestic product. If a country routinely receives FDI that exceeds 5-6% of GDP each year, then this is a significant success.

Definition: Foreign direct investment are the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. This series shows net inflows (new investment inflows less disinvestment) in the reporting economy from foreign investors, and is divided by GDP.