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Eritrean-Ethiopian War

The Eritrean–Ethiopian War took place from May 1998 to June 2000 between Ethiopia and Eritrea, forming one of the conflicts in the Horn of Africa. While Eritrea and Ethiopia— two of the world's poorest countries— spent hundreds of millions of dollars on the war and suffered tens of thousands of casualties as a direct consequence of the conflict, only minor border changes resulted.

According to a ruling by an international commission in The Hague, Eritrea broke international law and triggered the war by invading Ethiopia. At the end of the war, Ethiopia held all of the disputed territories and had advanced into Eritrea. After the war ended, the Eritrea– Ethiopia Boundary Commission, a body founded by the UN, established that Badme, the disputed territory at the heart of the conflict, belongs to Eritrea. As of 2015, Ethiopia still occupies the territory.

In August 2009, Eritrea and Ethiopia were ordered to pay each other compensation for the war.

In March 2011, Ethiopia accused Eritrea of sending bombers across the border. In April, Ethiopia acknowledged that it was supporting rebel groups inside Eritrea. In July, a United Nations Monitoring Group accused Eritrea of being behind a plot to attack an African Union summit in Addis Ababa, the capital of Ethiopia, in January 2011. Eritrea stated the accusation was a total fabrication.

In January 2012, five European tourists were killed and another two were kidnapped close to the border with Eritrea in the remote Afar Region in Ethiopia. In early March the kidnappers announced that they had released the two kidnapped Germans. On 15 March, Ethiopian ground forces attacked Eritrean military posts that they stated were bases in which Ethiopian rebels, including those involved in the January kidnappings, were trained by the Eritreans.

The Kingdom of Aksum, covering much of modern-day Eritrea and northern Ethiopia, rose somewhere around the first or second centuries and adopted Christianity around the time Islam had spread through Egypt and the Levant. In medieval times much of Eritrea fell under the Medri Bahri kingdom, with a smaller region being part of Hamasien.

The creation of modern-day Eritrea is a result of the incorporation of independent, distinct kingdoms and sultanates (for example, Medri Bahri and the Sultanate of Aussa) eventually resulting in the formation of Italian Eritrea. In 1947 Eritrea became part of a federation with Ethiopia, the Federation of Ethiopia and Eritrea. Subsequent annexation into Ethiopia led to the Eritrean War of Independence, ending with Eritrean independence following a referendum in April 1993. Hostilities between Eritrea and Ethiopia persisted, leading to the Eritrean–Ethiopian War of 1998–2000 and further skirmishes with both Djibouti and Ethiopia.

Eritrea is a one-party state in which national legislative elections have been repeatedly postponed. According to Human Rights Watch, the Eritrean government's human rights record is considered among the worst in the world. The Eritrean government has dismissed these allegations as politically motivated. The compulsory military service requires lengthy, indefinite conscription periods, which some Eritreans leave the country in order to avoid. Since all local media is state-owned, Eritrea was also ranked as having the least press freedom in the global Press Freedom Index.

Eritrea is a member of the African Union, the United Nations, and IGAD, and is an observer in the Arab League alongside Brazil, Venezuela, India and Turkey.

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The nakfa (ISO 4217 code: ERN) is the currency of Eritrea and was introduced on 8 November 1997 to replace the Ethiopian birr at par. The currency takes its name from the Eritrean town of Nakfa. The nakfa is divided into 100 cents.

Since 2013 the nafka has been pegged to the US dollar at a fixed rate of USD$1 = ERN10.47. Prior to that, it was officially pegged at USD$1 = ERN13.50, however black market rates available on the streets typically offered a rate of 22 nakfas per dollar.

Between 18 November - 31 December 2015 the Bank of Eritrea initiated the replacement of all nakfa banknotes. The banknote replacement initiative was designed to combat counterfeiting, the informal economy but primarily Sudanese based human traffickers who had accepted payments in nakfa banknotes in exchange for transporting would-be migrants primarily to Europe. A consequence of this was substantial amounts of the country's currency existed in vast hoardings outside Eritrea.

The plan to replace the country's currency was top secret and designed to prevent human traffickers bringing their funds back in time to exchange for the new banknotes. On the 1st January 2016, the old nakfa banknotes ceased being recognized as legal tender, rendering external stockpiles of currency worthless.

The current series of banknotes is the artwork of an Afro-American banknote designer, Clarence Holbert, and printed by German currency printer Giesecke & Devrient.