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Problems In The Eritrean Government

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In an unusual admission to problems it faces, in yesterday’s edition of Haddas Eritrea, a Tigrinya newspaper it owns, the Eritrean government issued an editorial entitled “Appropriate Correction.” The editorial raises more questions than it answers as it fails to restore the exceeding loss of confidence in the government owned financial institutions that allows depositors only limited and periodic withdrawal of their own funds.
On December 11, 2017, Awate.com’s Gedab News broke the news about Eritrean depositors losing total control of their funds deposited in the government owned banks. Subsequently, on December 25, 2017, Gedab News published a news item entitled, Eritrean Economy in Limbo. Against its nature, the government has now
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But since people have lost confidence in the ruling party owned and run financial system of the country, and having lost access to their own bank deposit, not many are willing to deal with the banks. Instead, they are forced to deal in a parallel economy where the cash only and bartered transactions denies the state any tax revenues.
Due to the shortage of local currency in circulation in the market, in some parts of Eritrea people have started using the Sudanese pound and the Saudi Riyal which have become alternative currencies in transactions conducted behind the back of the government.
The Government has admitted closing 420 businesses for a period ranging from one month to eight months, “based on the violations they committed.” And it explains their offences as follows:
In the efforts that were exerted so far to establish and strengthen legal transaction as a culture, it is evident that such kind of illegal transactions have become habitual, and a hindrance. Even now, those who withdraw money from their accounts, but never deposit money in return, and who do not want to neither operate legally, or declare the source and amount of their revenues, and refuse to accept checks, and those who do not pay taxes, and who engage in illegal acts like trading in foreign exchange and hard currencies, are not lacking.
The government claims it has issued
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