Nicaragua , the largest country in Central America, has a total population of just over 6 million. It is bordered to the north by Honduras and to the south by Costa Rica and has significant coastline along both the Caribbean and Pacific. Nicaragua is divided into 15 departments and 2 autonomous regions. According to the World Bank, approximately 42% of Nicaragua’s land area is in agriculture and a similar percentage of the population is rural.

Nicaragua is a democratic-presidential republic with four branches of government (executive, legislative, judicial and electoral). It has a multi-party system. The current President is Mr. Daniel Ortega Saavedra, who was elected in November 2006 and reelected in November 2011. Elections are scheduled for November of 2016. Nicaragua has diplomatic relations with most countries around the world, and is a party to the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), which aims to facilitate trade and investment and further regional integration by opening markets and promoting transparency.


The Nicaraguan economy has shown strength over the last five years with annual GDP growth of 4-6%. Remittances (income from residents living outside of the country) continues to represent a significant percentage of Nicaragua’s GDP – about 15%.

Despite recent economic growth, unemployment and underemployment continue to pose a challenge for Nicaragua. While official statistics report unemployment rates at around 6%, according to a recent report of the United Nations Development Program (UNDP) Nicaraguan unemployment exceeds 20% and underemployment tops 60%. Approximately 1/3 of the population works in the agricultural sector.

Because the government does not have the resources to provide the kind of “safety net” available in developed countries, a very large number of Nicaragua’s population of six million suffer the physical and mental deprivations of poverty: hunger, sickness, illiteracy and hopelessness. The World Bank Poverty & Equity Databank indicates that about 11% of Nicaragua’s population lives below the international poverty line of $1.90/day and 25% live below the $3.10/day poverty line. Measured by GDP per capita, Nicaragua remains the poorest country in Central America and the second poorest in the Western Hemisphere. Though trends have been favorable since the turn of the century, unacceptably large numbers of people remain in poverty.

The Nicaraguan economy is heavily dependent on agriculture, but tourism, construction, textiles & apparel, chemicals, machinery and metal products, and mining have been expanding. Coffee, bananas, sugar cane and cotton are some of the major agricultural products. Long-standing land ownership disputes, commodity price fluctuations, natural disasters, and the impacts of climate change continue to negatively impact the agricultural sector, with small producers particularly affected.

Transportation within Nicaragua is limited to road traffic including motorcycles, cars, buses and trucks. Since 2001, there has been no rail transportation in Nicaragua. There are three seaports on the Pacific coast and two on the Caribbean coast. Nicaragua has seven airports with international service with Managua being the most significant.

Foreign Investments, Banking & Microcredit Industry

The Nicaraguan currency is the Córdoba though the US dollar is used extensively. Most financial institutional provide the alternative of a US dollar account and most ATMs offer the option of withdrawal in Córdobas or US dollars. The Central Bank of Nicaragua has used a crawling peg scheme, devaluing the Córdoba against the United States dollar by 5% per annum, for the past 25 years.

The Ortega administration actively promotes foreign investments though inflows remain small relative to central American neighbors such as Costa Rica and Panama. The Foreign Investment Promotion Law gives foreign investors the same rights as those granted to nationals, with the exception of national security and public healthcare.

In 2009, the Nicaraguan banking and finance sector was significantly impacted by the “No Payment” movement. Soon thereafter, discussions between industry representatives and the government lead to Law 769, the Law for the Promotion and Regulation of Microcredit, in 2011. The law is intended to both protect borrowers and strengthen the industry, thereby building confidence in the sector and improving access to capital. As a result of this law, the microcredit industry in Nicaragua now operates under the National Microfinance Commission (CONAMI for its initials in Spanish). The mission of CONAMI is the “regulation, promotion, and projection of the microfinance industry with the purpose of strengthening its solvency, development, and social performance.” Law 769 specifically targets (i) client protection, (ii) poverty reduction, and (iii) gender equality and has resulted in improved conditions for borrowers and lenders.


Education is free in Nicaragua with an academic year that runs from February to November. Schools are grouped into primary, secondary, and university. On many levels, Nicaraguan schools do very well. Based on UNICEF data, the literacy rate is 78% for all adults, and is higher for youth, with improving trends. Primary school participation rates are in the mid-90%. Additionally, Nicaragua has a fairly robust university system with 30 public and 75 private universities.

But education in Nicaragua is significantly constrained by the limited financial resources of the government. Again using UNICEF data, access to pre-primary education is limited with participation rates hovering just over 50%. Secondary school enrollment and participation rates are even lower. Further, because of limited facilities and teaching staff, students are in school for only the morning or the afternoon (or sometimes the evening in the case of secondary schools) – essentially half of a typical school day. Fewer than 15% of the population has access to the internet.


Tourism is now the second largest industry in Nicaragua with the number of visitors exceeding 1.0 million persons for the first time in 2010. Growth has continued since then, reaching 1.4 million visitors in 2015. The majority are from other Latin American countries.

Recreational travelers are drawn to Nicaragua for its volcanos, lakes, wildlife, culture, and beaches. The primary tourist attractions are ecotourism and agritourism, the architecture of cities such as León and Granada, and surfing on the Pacific coast. Beyond León and Granada, major destinations include Masaya, Rivas, San Juan del Sur, the San Juan River, Ometepe, the Mombacho Volcano and the Corn Islands located off the Caribbean coast.

Nicaragua has also become a significant destination for retirees from North America. Several publications, including the Wall Street Journal and US News, have included the country on lists of best retirement destinations for those on a budget.

The Future

While the last century has presented Nicaraguans with many challenges, the country is now making rapid progress and the future is bright. But much needs to be done to continue the progress and avoid the setbacks that have occurred previously in the country, and minimize the issues that significantly impact many of its neighbors, notably those related to drug trafficking and organized gangs.

A January 28, 2012 article in The Economist noted: “LYING between Colombia's coca bushes and Mexico's cocaine traffickers, Central America is a choke point on the drugs trail. In 2010 the smugglers ensured that Honduras, El Salvador, Belize and Guatemala were among the world's seven most violent countries. Costa Rica and Panama are richer and safer. But since 2007 their murder rates have respectively risen by a third and nearly doubled. Amid this inferno Nicaragua, the poorest country in mainland Latin America, is remarkably safe. Whereas Honduras's murder rate in 2010 was 82 per 100,000 people, the world's highest in over a decade, Nicaragua's was just 13, unchanged in five years. That means it is now less violent than booming Panama, and may soon be safer than Costa Rica, a tourist haven.” Nicaragua has been ranked with the lowest crime rate in Latin America by Interpol.

While the responsibility for its future falls on the shoulders on the people of Nicaragua and their government, there is much that can and should be done to assist them in their efforts. Access to capital and industry expertise are two areas where significant contributions can be made by those who are not citizens of this amazing country. A capital-starved economy cannot grow. Only those with access to resources can take advantage of opportunities. By offering First World investment resources in the form of otherwise scarce credit to support the work of poor Nicaraguan producers, SosteNica is helping to keep the people of Nicaragua moving forward.


Nagarote is located 30 miles north west of the Managua airport and has a total population of approximately 32,000, with more than half of the population living in the rural areas surrounding the city. The city is located on the main artery between Managua and León and has good bus service to these and other cities. Nagarote's economy is largely based on cattle ranching and agriculture. Primary crops include soybeans, cotton, peanuts, corn, vegetables and tobacco. Salt is another product and brick-making is a significant activity along the road between Nagarote and La Paz Centro.