Despite a significant reduction in poverty in recent years, Nicaragua is still one of the poorest countries in the Americas. It has the second-lowest GDP per capita in the Americas, with 30 percent of the population living below the national poverty line. Nicaragua ranks 125 out of 188 countries on the United Nations Development Programme’s 2015 Human Development Index.
Poverty in Nicaragua is concentrated in rural areas, with 50 percent of rural residents living below the national poverty line. The majority of the rural poor live in the vast, dry central region, where natural resources are limited, lands have been over-exploited and water for production is scarce. Families depend on agriculture for their livelihood and devote two-thirds of their income to purchasing food. Small-scale farmers and landless farm workers are also among the most vulnerable to climate change.
Nicaragua’s administration of public institutions and its management of the economy and the national budget are steadily improving. But the commitment to democracy, human rights and rule of law is being questioned by civil society and the media.
The country has made progress on targets of achieving universal primary education, promoting gender equality and empowering women and reducing child mortality. It faces challenges, however, in eradicating poverty and ensuring environmental sustainability. Nicaragua is also vulnerable to natural disasters, such as drought, floods and hurricanes, which regularly plague the country and jeopardize development gains in poor rural areas.
The Government of Nicaragua’s achievements in the area of community policing and security have helped to contain the insecurity that is prevalent in the Northern Triangle of Central America (Honduras, El Salvador and Guatemala). However, while the country has among the lowest homicide rates in the region, there is a risk that criminal networks operating in the northern countries could present increasing security challenges.
Nicaragua’s current administration is committed to implementing policies and programs that positively impact the most vulnerable members of society, including rural poor and women. Canada’s international development assistance program in Nicaragua is closely aligned with Nicaragua’s National Human Development Plan. This plan focuses on:
- economic growth, job creation and the reduction of poverty and inequality;
- rebuilding infrastructure for energy, roads, electrical grids and ports;
- stimulating business development and the agriculture sector; and
- strengthening food security by improving financial services and technical assistance available to producers and by creating associations of producers to better market their products.
The goal of Canada’s international development assistance program in Nicaragua is to help the country improve clean economic growth and improve the lives of children and youth. Indeed, preventive strategies, such as increasing economic opportunities for the poor and support for young people to acquire dignified livelihoods, are key to reducing poverty, migration and crime.
In the context of the International Aid Review (PDF, 2.75 MO, 28 pages) launched by the Minister of International Development and La Francophonie, Canada conducted consultations in Nicaragua with the Government of Nicaragua, local civil society organizations, co-operatives, think tanks and other stakeholders, as well as with the general public, through a country-specific online survey. The information gathered through these consultations is feeding into the broader global analysis led by Global Affairs Canada to develop new international assistance policies and programs.
1. Clean economic growth
Canada supports efforts to help Nicaragua increase the income of the rural poor by improving productivity and competitiveness. This support includes increasing access to electricity and improving sustainable management of resources by local authorities. To promote clean economic growth, Canada is focusing on supporting small enterprises, entrepreneurs and smallholder men and women producers in agricultural and non-agricultural activities. Priority is given to improving agriculture and its resilience to climate change, improving the methods of agri-food products processing and marketing, increasing access to knowledge and technology for higher-value production in agriculture and non-agricultural activities and improving access to markets.
Key anticipated results
- Improve the competitiveness and profitability of 30,000 smallholder farmers and 85 agri-food processors and distributors, and create 850 jobs in the agri-food sector.
- Improve the quality and transformation processes of agriculture production and increase access to markets for 900 small farmers organizations.
- Increase the quality of life and improve economic opportunities for approximately 75,000 individuals in over 292 communities by providing access to electricity in remote rural communities.
- Enhance women’s economic empowerment through business development support to enable the growth of women-owned or managed small businesses.
2. Health and rights of women and children
Thanks to important gains made to ensure food security in the country, Canada’s international development assistance program in Nicaragua is transitioning out of food security programming and is in the process of developing new programming in the sectors related to health and rights of women and children. Initiatives will emphasize building young people’s employment, entrepreneurship and life skills, and protecting girls and boys from key risk factors to both reduce poverty and mitigate pressures for them to migrate and engage in illicit activities.
Key anticipated results
- Reintegrate 11,000 at-risk youth with behavioral problems into the social and economic life of the country in 38 targeted municipalities and support employment entry for at-risk youth.
Progress on Aid Effectiveness
Nicaragua adheres to the Paris Declaration on Aid Effectiveness (PDF, 317 KB, 23 pages). Donors are harmonizing their efforts, and Canada played a lead role in donor-government coordination in rural development. As the donor liaison for the Productive Rural Development Sector Pooled Fund (concluded in 2014 to 2015), Canada has engaged the Nicaraguan government to develop new policies and service models for expanding early agro-industrialization of women- and youth-led rural family enterprises.
The Government of Nicaragua works very closely with donors in demonstrating local ownership, managing for results and ensuring donor alignment with its National Human Development Plan. In particular, Nicaragua’s stable and experienced civil service is actively engaged in implementing aid effectiveness principles.
2015 to 2016
Sustainable economic growth
- Production volumes of prioritized crops increased by as much as 21 percent, and production losses were reduced by 6 percent through the training of 1,477 smallholder families (35 percent of the participants were women); 1,958 metric tons of maize and beans were sold to formal markets; and a 320 percent increase in access to credit was made from the prior year.
- Electrification services were provided to a total of 13,932 people in 59 communities in northern Nicaragua, 56 percent of whom were women and girls.
- Nicaragua was the first country to subscribe to the Catastrophe Risk Insurance Facility for Central America ($16.6M) in 2015, providing its government with natural disaster risk insurance coverage for earthquakes and hurricanes, to support its ability to maintain essential services in the aftermath of a disaster and to protect its poverty-reduction gains.
- Rural women were provided training and support to improve their agricultural production, post-harvest management and access to credit and local markets, as well as in assuming decision-making positions within producers’ organizations (women hold 38 percent of the total leadership positions). A group of 1,069 young women received agricultural technical training, and 50 percent of them have increased their leadership in family-farm decision making.
Children and youth
- Technical education was provided to 2,380 poor rural young women and men in agro-ecological production to increase farm productivity and profitability, adapt to climate change and provide economic alternatives, which generated US$189,269 in revenues—an increase of 286 percent in the last year.
- Training was provided to 1,586 women, most of whom were young, through Skills for Employment projects.
2014 to 2015
Sustainable Economic growth
- Despite a severe drought in 2014 and 2015, Canada provided training and support to over 2,700 rural farmers to improve their productivity and capacity to adapt to climate change, with increases of between 13 percent and 21 percent of targeted products over the year.
- Technical assistance was provided to 26,154 women, 8,450 women received agricultural inputs and business management training, and 5,980 producers accessed credit for basic grains.
- The Nicaragua Electrification Project: Phase I, which ended in March 2015, provided electrification services to a total of 126,894 men, women and children in 444 communities in northern Nicaragua, 26,318 of them in 65 communities just in the last year of Phase 1.
- The program helped to improve access to credit for over 2,600 farmers, as well as improve sales volumes and sales prices.
- Support to improve agricultural productivity via technical assistance and new technologies was provided to 46,304 producers.
- Assistance to improve household diets was provided to 8,452 women.
- Technical education was provided to 1,650 young subsistence producers. As a result, farming productivity increased by 50 percent, allowing 45 percent of the producers to generate an income from their production and 56 percent met their families’ food security needs throughout the year.
The story behind the results: Focusing on Nicaragua’s next generation of farmers
Although the world’s food is grown in rural areas, people living in these areas are not free from malnutrition, a condition that affects young children in particular. There are many challenges involved in increasing food security, including low productivity, high costs and gaps in modern techniques and technologies. By targeting the men and women farmers of the future in northern Nicaragua, Solidarité Union Coopération (SUCO) is helping the next generation to overcome these challenges and ensure the future success and sustainability of rural farmers.
Since 2010, with support from Canada, SUCO’s PROGA-Jeunes project has helped more than 2,378 Nicaraguan young people improve production yields on their experimental agricultural plots. In addition, 456 hectares have been cultivated using agro-ecological farming practices, 118 facilitators and technicians have been trained, 2,378 young people and their families have received training on gender equality, and 988 environmental protection and 8,624 productive infrastructure projects have been implemented.
One of these young farmers-in-the-making, 22-year-old Duglas Mendez Espinoza, runs a farm near San Andrés together with his parents and four brothers. Through training and technical guidance provided by PROGA-Jeunes, Duglas and his family have increased their farm revenues by 80 percent by diversifying crops, adopting agro-ecological practices and marketing part of their production.
“I didn’t know how to farm effectively,” said Duglas. “Traditional methods were very expensive. At first, my family and I were not convinced that agro-ecological methods would be successful, especially since our neighbours told us we would face crop diseases and pests.”
One such infrastructure project is also a source of pride for 18-year-old Dimas Ramón Olivas Sánchez. He built himself a rearing pond for tilapia that can hold 200 fish. Thanks to this pond and the knowledge Dimas acquired from the PROGA-Jeunes project, the family farm has tripled the number of its income-generating food products, from five to 15. “With all of these products, my family has access to food for at least 10 months of the year,” said Dimas.
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