Nicaragua is located in Central America with borders to the North with Honduras and to the South with Costa Rica. It has approximately 5.7 million citizens which makes it one of the least densely populated areas in Central America. It has a young population with the median age at 21 years. However, it also has the largest city in Central America (Managua has a population of 1.4 million) and the largest lake (Granada Lake) in the area. Throughout its history, a series of natural calamities such as earthquakes, volcano irruptions, flooding caused by hurricanes and typhoons as well as political instability and war have kept its citizens from enjoying the quality of life of its Central American neighbours.
"Never rich in the first place, Nicaragua is striving to overcome the after effects of dictatorship, civil war and natural calamities, which have made it one of the poorest countries in the Western Hemisphere." (BBC News, January 11, 2007). However, positive signs have led many to have a more optimistic view of the future. The economy is growing fast with major macroeconomic indicators are stabilizing. The Ortega government has vowed to solve the growing inequality between the rich and the poor by improving basic infrastructures as well as access to education and healthcare services. The export market is expected to grow over the coming decade due to a reduction in tariffs and the implementation of a free trade agreement with the United States in 2006. There is a quiet confidence as you walk the streets of Managua that things are looking a little brighter in Nicaragua. It helps that the government has chosen its national slogan as “Nicaragua Avanza” (Nicaragua is moving forward).
Some major facts about the Nicaraguan economy:
- Economic growth of about 4% over recent years.
- Central Bank has been successful in reducing inflation rates yet it is still high at 9.6% in 2005.
- Nicaragua is the fifth largest coffee exporter in the world
- Nicaragua was the 2nd poorest country in the Americas in 2005 after Haiti.
- The Nicaraguan banking sector is comprised of five major banks, three regulated microfinance institutions and approximately 300 microfinance programs and financial cooperatives.
- The estimated size of the microfinance portfolio (serving small and micro entrepreneurs in Nicaragua) in 2006 was US$420 million divided between 645,000 loans. The portfolio has seen an average annual growth of 35% over the past five years and it is projected to grow by an average annual growth of at least 15% over the next six years.
Click here for more information about Nicaragua (CIA Fact Sheet).
