Banking in Eritrea
In line with its objectivity to transform Eritrea into a centre of finance and trade together with its determination to promote, encourage, safeguard and protect investments of the private sector the government has issueda. Investment Proclamation No. 59/1994b. Central Bank Proclamation No. 93/1997Both legislations had completely dispensed with previous restrictive and prohibitive rules and regulations governing Investment and the administration of Foreign Exchange.Based on its legislation the Bank of Eritrea, has fully liberalized Foreign Exchange through a Public Notice issued on May 1st 1998 and as a result:
- The rate of exchange has been left to be market determined.
- Surrender requirement has been dispensed with and exporters may retain up-to 100% of their proceeds.
- Except for internationally prohibited items, no negative list is maintained for the import of goods.
- No limitation exists with regard to the transfer of profits, dividends, patent rights and capital etc.
- Individuals and enterprises may freely maintain foreign currency accounts. All convertible currencies are acceptable in Eritrea.
- Visitors are not required to declare their foreign currency holding on entry and exit from Eritrea.
- Banks are free to determine their deposits and lending rates.
Other than the central bank, there are three banks currently operating in Eritrea.
- The Bank of Eritrea is now prepared to license foreign banks as well.
- Commercial Bank of Eritrea (CBE) is a state owned bank. It has nearly twenty branches in the country.
- Housing and Commerce Bank of Eritrea (HCBE) is a private bank, specializing in commercial and mortgage loans.
- Development and Investment Bank is a state owned bank specializing in long-term industrial and agricultural loans.
8:00 – 12:00 and 14:00 – 17:00 Monday to Friday,
8:00 – 12:00 Saturday.
The national currency of Eritrea
The national currency of Eritrea is the Nakfa. It was introduced in 1998 and has been named after the town of Nacfa, the town in the Sahel mountains that served as the headquarters of the EPLF during Eritrea’s armed struggle against Ethiopian occupation, and so both Nakfa’s became a symbol of Eritrea’s hard-fought-for independence. The Eritrean Nakfa is issued in notes with denominations of 100, 50, 10, 5 and 1 Nakfa. They were designed by a black American, Clarence Holbert, and printed by Giesecke & Devrient in Germany. One side of the notes depicts the various ethnic groups in Eritrea, while the reverse side has typical scenes from various parts of the country. There are five coins, the 1, 5, 10, 25, and 100 cents coin, struck in a nickel alloy. These coins are the first coins issued for circulation in 1997 by Eritrea since it gained its independence from Ethiopia in 1991 after a 30 year independence struggle. The common reverse shows fighters raising the Eritrean flag, the date 1991 and the legend Liberty, Equality and Justice.Featured on the front of the coins are six different animals native to Eritrea. The 1 cent shows an Ibex, the 5 cents shows a Leopard on log, the 10 cent pictures an Ostrich, the 25 cents shows a Grevy’s Zebra, the 50 cents shows a Gazelle, and the 100 cent features an Elephant and her calf.
The Commercial and the Housing bank provide exchange services for various currencies, but many people preferred the shorter lines and better rates provided by the small (but official) exchange offices. Unfortunately they have been closed by the Eritrean authorities. The only one left is the government owned Himbol Exchange. There is a lot of unofficial moneychangers around the post office and on Harnet Avenue. Do not attempt to change currency on the streets, since it is not allowed. if you do indulge, you’re taking a big risk for a small gain. The moral argument against using the black market is that you are robbing the government of Eritrea of valuable hard currency in order to make your cheap holiday even cheaper.