Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 11/26/2018
  • In April 2018, government security forces and parapolice supported by President Daniel Ortega brutally attacked peaceful protests, sparking massive civic unrest and ongoing violent confrontations.  Protestors took to the streets demanding democracy, freedom of expression, and rule-of-law.  The government responded with armed attacks, leaving several hundred dead and thousands wounded. The future of the country’s political leadership remains very uncertain and the government has implemented a plan to exile, jail, or kill anyone considered in opposition.  The government refers to peaceful pro-democracy protesters as terrorists, murderers, or coup-mongers and is using anti-terrorism and money laundering laws to silence and jail critics.  The economy collapsed into a recession and unemployment is soaring as a result.  International human rights organizations have reported gross violations of human rights as the Ortega government acts to retain political power at the expense of human rights and economic stability.

  • Due to gross violations of human rights and corruption, several senior members of the government have been sanctioned by the Office of Foreign Asset Control (OFAC) in the U.S. Department of the Treasury.  Additionally, Albanisa S.A., a business used by the government of Nicaragua for many transactions, is owned 51% by Venezuela’s PDVSA Oil company which is subject to US sanctions.  There is significant reputational and legal risk of doing business with sanctioned individuals and firms.

  • Looting by government-controlled gangs during civic unrest targeted several American firms operating in Nicaragua and the police largely stood by or did not respond to incidents. The government has organized armed takeovers of private lands, some owned by US citizens, as a way to reward parapolice forces and other supporters.  

 

  • Nicaragua has a young population, with roughly 70% of its people under the age of 35, but many in this prime demographic have elected to flee to neighboring countries due to threats to their lives.  Nicaraguan consumers are familiar with U.S. products and brands, which are viewed favorably for high quality.  
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  • The Central Bank of Nicaragua forecasts a Gross Domestic Product (GDP) growth of 0.5 % to 1.5% for 2018 due to budget reforms passed intended to mitigate the effects the ongoing crisis, although actual results are likely to be worse. Nicaragua's GDP increased by an estimated 4.5% in 2017, due largely to increased infrastructure development, domestic consumption, tourism inflows, agriculture, and growing remittances.  Inflation is estimated to reach 6.5 to 8.5 percent in 2018, compared to 5.7% in 2017. ​​​​​​​
  • On April 1, 2006, the United States - Central America - Dominican Republic Free Trade Agreement (CAFTA-DR) entered into force for the United States and Nicaragua.  100% of U.S. exports of consumer and industrial goods now enter Nicaragua duty-free.  Tariffs on most U.S. agricultural products will be phased out by 2024, with all tariffs eliminated by 2026. 

 

  • The United States is Nicaragua's largest trading partner, the source of roughly a quarter of Nicaragua's imports and the destination for approximately two-thirds of its exports (including free trade zone exports).  U.S. exports to Nicaragua totaled $1.6 billion in 2017, including computer and electronic products, textiles and fabric, food and kindred products, and machinery.  Nicaraguan exports to the United States were $3.3 billion in 2017, including apparel and accessories, transportation equipment, primary metals, agricultural products, and food and kindred products.  Other important trading partners for Nicaragua are El Salvador, Costa Rica, Mexico, Venezuela, and the European Union. 

 

  • The Central Bank of Nicaragua (BCN) stated that in 2017 foreign investment inflows were $816 million.  FDI in 2018 will be significantly lower.  Investments inflows had been particularly significant in the energy, industrial, communications, and commercial sectors.   FDI from the United States accounted for 20 percent of the FDI from 1991 to 2015. Local wages are low by regional standards, and together with tax incentives for several economic sectors, are considered key in attracting foreign direct investments. However, these incentives have been severely undermined by the ongoing violence, property seizures, and economic uncertainty. 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Nicaragua Trade Development and Promotion