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Overview

  • In 2017 Nicaragua maintained a good growth rate of 4.6 percent. Due to the social and political unrest that the country has experienced since April 2018, the economy contracted to -4.0 and -3.9 percent in 2018 and 2019, respectively. According to the latest forecasts, for 2020 growth is expected to fall to -6.3 percent, and would recover slowly to 0.7 percent by 2021.

    The COVID-19 (Coronavirus) pandemic plus the violence that has prevailed in the last years, job losses, a fall in consumer and business confidence, and a decline in labor intensive sectors such as construction, commerce and restaurants have taken a social and economic toll, further halting progress achieved in poverty reduction since 2005.

    Poverty – defined as living with an income below $3.2 per person per day in 2011 Purchasing Power Parity (PPP) – increased to 13.1 percent in 2019 (from 9.5 percent in 2017), adding more than 240,000 people into poverty. Meanwhile, remittances increased by 9.9 percent year over year in the first half of 2019, supporting household consumption and mitigating deeper poverty increases.

    Currently, the pandemic is expected to adversely affect Nicaragua through declined remittance inflows, reduced trade, paralyzed tourism, and increased risk premiums, partially offset by lower oil prices.

    Nicaragua is still one of Latin America’s least developed countries, where access to basic services is a daily challenge.

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

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

     

    Last Updated: Jun 08, 2020

  • 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 June 2020, the World Bank portfolio in Nicaragua includes 9 projects, totaling US$477.82 million in net commitments, in the areas of (1) roads, telecommunications and land administration; (2) education and health; (3) financial administration and catastrophic insurance. 

    No new lending has been approved by the World Bank for the public sector since the beginning of the political crisis in April 2018. As with all Bank projects, the decision to propose operations is contingent on the appropriate conditions being in place for the effective implementation of activities to benefit the people of Nicaragua.

    Given the current health emergency, the World Bank is ready to redirect resources and activate emergency components from projects currently under implementation to help respond to the crisis, while ensuring that all fiduciary requirements are in place to make certain that resources are used for the established purposes.

    Last Updated: Jun 08, 2020

  • · 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 % 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.

    • Since 2017 and as a follow up to PASEN II, the Project “Alliance for the Quality of Education” (ACE) has been improving pedagogical practices of teachers and educators nationwide at preschool, primary and secondary levels. It has also been improving the conditions of school environments for learning in selected schools; and strengthening the capacity of the Ministry of Education for project management, monitoring and evaluation. There have been important achievements, such as the implementation of a Teacher Mentoring Program for primary and secondary school teachers, including the training of more than 500 school directors and deputy-directors, and the effective mentoring of more than 1250 teachers; in-service training for primary and preschool teachers with more than 9000 preschool teachers participating. The project also provided materials and equipment for teachers and students. In addition, it is planned to build more than 40 schools in prioritized municipalities of Nicaragua, of which several are under construction. All activities are carried out respecting and strengthening the multicultural nature of Nicaragua: Relevant activity documents and school material have been translated into indigenous languages and participatory decision-making mechanisms have been put in place.

    · The Nicaragua Catastrophe Risk Insurance Project enables access to an efficient sovereign risk insurance associated with natural events, such as tropical cyclones, earthquakes, and excess rainfall. The government of Nicaragua renewed its earthquake, tropical cyclone and excess rainfall policies for 2019/20. This was Nicaragua’s fifth renewal of Caribbean Catastrophe Risk Insurance Facility (CCRIF) policies. The sovereign insurance offered by CCRIF Segregated Portfolio Company (SPC) is currently one of the main disaster risk financing instruments that Nicaragua has in place to provide short term liquidity in the case of a disaster, enabling the country to respond to the disaster until other funding can be mobilized. Under the insurance policies, CCRIF SPC has made two payouts to Nicaragua, including one on June 23, 2016 following a magnitude 6.1 earthquake; and another on December 2016 following Hurricane Otto.

    • In terms of water and sanitation, the Sustainable Rural Water Supply and Sanitation (WSS) Sector Project (PROSASR) provided water and sanitation systems to some 70 rural communities. From 2014 to 2019, 29,907 beneficiaries gained access to improved water supply and 13,980 people to safe sanitation services. The project not only financed civil works but also helped Nicaragua strengthen municipal and community capacities for the administration, operation and sustainable maintenance of water and sanitation systems in rural areas. The Project also supported the implementation of social programs to spread the benefits of proper hygiene and practices for water conservation, 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 805,946 people, more than half of which are women. From 2012 to date, cadastral information for about 168,005 parcels has been updated, and more than 110,000 families have received legal documents for their properties, of which more than 82,000 are new land titles. All five protected areas within the project have been demarcated, labeled and geo-referenced.

    · From 2015 to date, the Nicaragua Caribbean Coast Food Security Project (PAIPSAN for its acronym in Spanish), financed by a grant of the Global Agriculture and Food Security Program (GAFSP), has helped 14,826 beneficiaries (47% - 6,983 are women; 33% - 4,839 are youth; 4,136 are indigenous and 791 are afro descendants) and their families (85,812 people) in more than 500 rural communities of 15 municipalities to improve their availability and access to more nutritious food. Implementing a Nutrition-Sensitive Agriculture approach, PAIPSAN has brought agricultural and artisanal fishery innovations, nutrition training, good socio-environmental practices, as well as innovative investments to increase value-addition and commercialization to improve family agriculture that is practices by indigenous, afro descendent and mestizo communities. On average, the project has achieved 78.25% increase of agricultural yields, while more than 8000 protagonists are adopting one or more agricultural and fishery technologies promoted by the project. 91.4% of women and children in protagonist families have improved their Dietary Diversity Index by consuming 7 or more groups of food with high nutritional value.

    · From 2017 to date, the Caribbean Regional Communications Infrastructure Program - Nicaragua (CARCIP) has promoted access to 3G cellular mobile phone services, including broadband Internet access at speeds above 2Mbps in 16 communities of the Caribbean Coast and Río San Juan, benefiting 39,518 inhabitants. A total of 450 inhabitants of these communities benefited from the digital literacy campaign which was carried out in Spanish, Mayangna and Miskito. In addition, with the aim of strengthening digital human talent and digital innovation, the project awarded 1,747 scholarships in English, 910 scholarships in soft skills and 52 scholarships in technical skills related to the information technology industry. Finally, the project enabled two open innovation centers in the Caribbean Coast (Puerto Cabezas and Bluefields) where young university students, with the help of mentors and following an open innovation methodology, developed 9 applications. Progress can also be seen in digital innovation centers for the cities of Bonanza, Siuna, León, and Granada.

    • Through the Public Financial Management Modernization Project, IDA has shown results in strengthening the country’s financial management capacities: 100 % of Central Government agencies have adopted the multi-year and results-based budgeting methodologies. The Administrative and Financial Management Information System –SIGAF– has also been implemented in all Central Government agencies. In addition, statistics management capacity in preparation for the Population and Housing Census improved: Nicaragua now has an updated and redesigned digital cartography for statistical operations in all the municipalities. 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 Census data. The technology of using Mobile Capture Devices in the Census was tested in pilot exercises.

    · Since 2015 and 2018, respectively, through the projects Strengthening the Public Health Care System  and Integrated Public Provision of Health Care Services, the World Bank supports the institutionalization of plans to improve the quality of health care in Nicaragua and the prevention of chronic diseases in the first level of care. The dynamic is participatory and encourages municipalities to prepare health improvement plans. This is echoed, for example, in the training of 2,518 health workers, the creation and equipping of entomology rooms for the prevention of diseases transmitted by mosquito bites; in the establishment of hospital waste management plans in 34 of the 64 hospitals; in the creation of a wastewater evaluation system; in an increase in the percentages of women receiving prenatal care (>80%), in the scope of coverage of childhood vaccination (>85%), and institutional delivery (> 88%). 95% of the municipalities report compliance with these plans, over 50% of what was proposed.

    · 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 % are females.

    Last Updated: Jun 08, 2020

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LENDING

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

*Amounts include IBRD and IDA commitments


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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