While Nicaragua has enjoyed a decade of macroeconomic stability and sustained economic growth, the current political crisis is taking its toll on the economy. GDP growth is expected to slow on account of the reduced activity in the agricultural, construction, tourism and retail sectors.
The current crisis aside, centralised decision making and weak institutional capacity, coupled with strong scepticism on the part of the government to work with certain external actors has typically complicated the implementation of EU projects in Nicaragua. Similarly, donors and cooperation agencies operating in the country have suffered from an excessive desire by the government to control every detail of cooperation programmes, both with respect to partner organisations and to the content of aid projects.
The EU is one of the main donors in the country. Our current priorities cover: It allocated €169 million for the 2014-2020 programming period covering:
- the productive sector, with a focus on rural areas (€68 million);
- effective education for employment (€43 million)
- adaptation to climate change (€50 million)
Nicaragua was allocated 169 million under the 2014-2020 Development Cooperation Instrument (DCI). The country also benefits from:
- Regional Cooperation Programmes for Latin America, including the Central America sub-regional programme. The amount foreseen for the Regional Indicative Programme (RIP) 2014-2020 is €805 million, and it has as its priorities: the security-development nexus; good governance, accountability and social equity; inclusive and sustainable growth; environmental sustainability and climate change; and higher education via Erasmus+ 2014-2020.
- The Latin America Investment Facility (LAIF) supports 3 projects in Nicaragua: the "Sustainable Electrification and Renewable Energy Programme (PNESER)" (global amount €308.8 million; EU €7 million), the ’Integrated Sector Programme for Human Water and Sanitation (LIFE)’ (global amount €252 million; EU €50 million), and the ’Integrated Sector Programme for Human Water and Sanitation (PISASH)’ (global amount €337 million, EU €50.75 million). This last programme is actually the largest programme in the LAIF portfolio in terms of volume.
- Food security programme (governance of small producers' networks).