Financial Crime World

Eritrean Party Controls Majority of Companies in Country, Audits Fund

The People’s Front for Democracy and Justice (PFDJ), the ruling party of Eritrea, controls all major companies in the country through its subsidiary, the Hdiri Trust Fund. This fund is headed by the financial head of the PFDJ and is responsible for auditing the company’s finances.

Lack of Transparency and Accountability

The move has raised concerns about the lack of transparency and accountability in Eritrea’s economy. Critics argue that the party’s control over the economy allows it to manipulate prices, restrict access to resources, and stifle competition.

  • The Hdiri Trust Fund has been accused of using its influence to embezzle funds meant for development projects and instead channeling them into the pockets of party officials.
  • The fund’s auditing process has also been criticized for being opaque and lacking transparency.

Economic Challenges

Eritrea’s economy is plagued by several challenges, including:

  • An informal, cash-based economy that makes it vulnerable to money laundering and related activities.
  • A lack of anti-money laundering (AML) reports, despite enacting laws and establishing a financial intelligence unit.
  • A government-imposed fixed exchange rate between the Eritrean nakfa and the US dollar, which has led to a steady expansion of the currency black market.

Impact on Civil Society and Social Protection

The lack of transparency and accountability in Eritrea’s economy has also had a negative impact on civil society and social protection. The government:

  • Has failed to provide support mechanisms for victims of organized crime, trafficking, and human rights abuses.
  • Has shut down independent media outlets since 2001.
  • Prohibits civil society organizations such as NGOs, labour unions, and interest groups.

Conclusion

In conclusion, the Eritrean ruling party controls all major companies in the country through its subsidiary, the Hdiri Trust Fund, which is responsible for auditing the fund’s finances. This lack of transparency and accountability has raised concerns about the economy and human rights in Eritrea.