Overview

  • After hitting a record 5.1 percent growth in 2011, slowing to 4.7 percent and 4.5 percent in 2016 and 2017, respectively. Nicaragua is expected to experience a contraction in 2018 of 3.8 percent due to the social and political unrest the country has experienced since April. However, due to the high degree of uncertainty over the outcome of the crisis, this forecast is subject to changes upward or downward.

    The ongoing protests, reported violence, job losses, and a fall in consumer and business confidence, have taken a social and economic toll. The country’s economic and social situation is expected to deteriorate in the second semester, threatening recent efforts in poverty reduction.

    The World Bank has supported Nicaragua through the International Development Association (IDA), the World Bank’s fund for the poorest countries, to support poverty reduction measures in the country.

    According to the 2016 Standard of Living Survey by the National Development Information Institute, general poverty in Nicaragua dropped from 29.6 to 24.9 percent between 2014 and 2016; while in the same period extreme poverty fell from 8.3 to 6.9 percent.  Despite this progress, poverty remains high. Nicaragua is still one of Latin America’s least developed countries, where access to basic services is a daily challenge.

    To better reach the country’s vulnerable families, IDA projects leverage local initiatives that stretch limited resources further and deliver sustainable results.

    Last Updated: Oct 04, 2018

  • Nicaragua’s Country Partnership Strategy (CPF) for 2018-2022 was built based on a Systematic Country Diagnosis and aims to further address poverty reduction while promoting prosperity for more Nicaraguans.

    The Nicaragua CPF is based on three vital objectives:

    1. Investing in human capital, in particular for disadvantaged groups. 

    2. Enabling private investment for job creation.

    3. Strengthening public institutions to improve disaster and external economic crises risk management.

    The CPF prioritizes programs to expand coverage and quality of preschool, primary and secondary education; improve maternal and child health; and expand access to water and sanitation services. It also seeks landholding, renewable energy and infrastructure improvement, increased productivity, exports diversification, and trade facilitation.

    This plan focuses on both investing in the human capital of Nicaraguans, health, education and skills, and on the private sector to create better paying jobs. It highlights working with young people, women, Indigenous populations, people of African descent, and in territories such as the dry belt and the Caribbean regions.

    The work program for 2018-2022 comprises interest-free credits and donations from the International Development Association (IDA) for investment projects, South-South exchanges, technical assistance, and analytical work.

    Additionally, the International Finance Corporation (IFC), the World Bank Group private-sector arm, plays a lead financing role in the energy and financial sectors, while the Multilateral Investment Guarantee Agency (MIGA) is open to opportunities to support foreign direct investment in the renewable power generation, agribusiness and financial sectors through the provision of risk guarantees.

    As of October 4, the World Bank portfolio in Nicaragua includes 11 projects, totaling US$541.8 million in net commitments, in the areas of roads, agriculture, water and sanitation, telecommunications, land administration, education, health, food security and nutrition, and financial administration. 

    Since the onset of the crisis, no new lending has been approved for Nicaragua and future operations will be contingent on the appropriate conditions being in place for the effective implementation of projects for the benefit of the people of Nicaragua. To date, the World Bank has reviewed the existing portfolio and will continue to ensure that the goals and benefits of the projects are geared to the well-being of the population. Measures have been strengthened to ensure that the Bank's resources are used for their intended purposes.

    Last Updated: Oct 04, 2018

    • Between 2012 and 2018, with the Second Educational Sector Support Project (PASEN II), an International Development Association (IDA) financed project, around 230,000 primary students of the poorest regions of the country, representing 25 percent of the national enrollment in primary education, received math, language, and literature textbooks, and almost 2,400 schools were equipped with new furniture.  Students from the autonomous regions in the Caribbean received 81,500 bilingual and monolingual textbooks in local languages. Also, more than 427,000 students received backpacks stocked with school supplies and shoes, which was recognized by parents as an incentive to keep their children in school.
    • In terms of water and sanitation, the Sustainable Rural Water Supply and Sanitation (WSS) Sector Project (PROSASR) is providing water and sanitation systems to some 70 rural communities. From 2014 to date, almost 5,984 beneficiaries gained access to improved water supply and more than 3,230 to safe sanitation services. The project has not only financed civil works but has also helped Nicaragua carry out pilot social programs to spread the benefits of handwashing or conserving water, through a range of social learning techniques, including community theaters.
    • The Second Land Administration Project (PRODEP II) covers six of the 15 Departments in the country, and has helped develop better property rights regulations benefitting more than 675,000 people, more than half of which are women. From 2012 to date, cadastral information for about 117,000 parcels has been updated, and more than 95,600 families have received legal documents for their properties, of which more than 70,000 are new land titles. All five protected areas within the project have been demarcated, labeled and geo-referenced.
    • Through the Public Financial Management Modernization Project, IDA has shown results in strengthening the country’s financial management capacities: 100 percent of Central Government agencies are using the multi-year and results-based budgeting methodologies. In addition, statistics management capacity in preparation for the Population and Dwelling Census improved: Nicaragua has now an updated and redesigned cartographic framework for statistical operations in a 100 percent of its municipalities. Likewise, the Building Census was carried out in 2017 and progress was made in the development of a technological platform for the collection and processing of the Census. The technology of the use of Mobile Catching Devices in the Census was tested in pilot exercises.
    • IDA supported the development of “módulos comunitarios de adoquines” or community participation associations focused on road construction by means of cheaper, locally-made “adoquines” or blocks that allow faster, more labor-intensive, and more sustainable road works. Between 2011 and 2017, under the Rural Roads Infrastructure Improvement Project, 170 kilometers of cobblestone rural roads have been built generating more than 2,470 temporary jobs, more than 40 percent for women; 26.5 kilometers of hydraulic concrete roads were constructed benefitting 52,908 inhabitants and connecting the Caribbean coast with the Pacific region of Nicaragua. IDA has also supported the sustainability of the road network by financing the routine maintenance of almost 200 kilometers of paved and cobblestone roads benefitting some 220,000 people with better productive opportunities; e.g. connecting families to schools, markets, hospitals.
    • Through the Project for the Adaptation of Nicaragua's Water Supplies to Climate Change (PACCAS), between 2012 and 2018 guaranteed access to water, protection of water resources, and mitigation of climate impacts in several communities vulnerable to the effects of climate change in rural was pursued. For example, in the Corn Islands, off the Caribbean coast of Nicaragua, the project resulted in the delimitation of 26 wetlands, which cover an area of protection of 150 ha and represent water reservoirs for the lives of 8,000 people living in the island; 26.6 ha of wetlands were reforested; two environmental and climate monitoring stations are up and running, which have strengthened the monitoring of climate and sea level behavior on the islands; and an environmental education and awareness plan was implemented to keeping the wetlands clean, protected and preserved as sources of life. A participation of 6,702 beneficiaries was achieved, of which 64 percent are females.

    Last Updated: Nov 06, 2018

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LENDING

Nicaragua: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


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Additional Resources

Country Office Contacts

NICARAGUA +505 2270 0000
5to. piso Edificio Cobirsa, Km 6,5 carretera a Masaya, Managua
cfloresmora@worldbank.org
USA +1 202 473-1000
1818 H Street NW, Washington, DC 20433
cfloresmora@worldbank.org