Managua, Nicaragua • 2016
ABOUT PRONICARAGUA • Information about • Assistance with real • Guidance for the Nicaragua and business estate and corporate completion of opportunities space options government permits • Customized packages of • Legal advice • Facilitation services for information • Guide of suppliers of exporting companies • Organization of visits: goods and services • Information about meetings with companies • Support and facilitation business opportunities in and institutions the Caribbean Coast through our regional office PRONiCaribe PRONicaragua is the Official Investment Promotion Agency of the Government of Nicaragua.
COUNTRY PROFILE Capital Managua Area 130,373 km 2 Official Language Spanish Population 6.2 million Population Growth 1.0% Population under 39 years 76.1% Labor Force* 3.2 million Unemployment* 6.7% Underemployment 46% Currency Córdoba Exchange Rate (2016 Average) C$28.62 = US$1.00 Time Zone UTC/GMT – 6 hours Temperature Between 20°C and 28°C Source: Central Bank of Nicaragua.
2015 ECONOMIC PERSPECTIVE Gross Domestic Product US$12,693 million* (4.9% growth vs 2014) GDP per capita US$2,027 Exports US$4,897 million FDI Inflows US$1,221.7 million* Gross International Reserves US$2,492 million* (2.35 times the monetary base) Inflation 3.05%* Currency Stability 5% annual devaluation vs. US Dollar Sources: Central Bank of Nicaragua, Ministry of Development, Industry and PRONicaragua. *Estimated data.
STRATEGIC LOCATION Destina Des inatio ion Travel Tim ime Via Miami 2.5 hours Air Atlanta 3.25 hours Air Houston 3 hours Air Mexico City 2.5 hours Air Miami 6 days Sea Los Angeles 13 days Sea Ensenada, Mexico 14 days Sea La Guaira, Venezuela 16 days Sea Puerto Limon, CR 8 hours (541Km) Land Puerto Cortes, HN 9 hours (673 Km) Land Guatemala City 10.5 hours Land San Salvador 8 hours Land
ECONOMIC ACTIVITIES Average Relation to Growth Economic Activity 2014 GDP 2010 ‐ 2014 Agriculture, livestock, forestry and fishing 15.1% 2.1% Trade, hotels and restaurants 14.5% 6.1% Manufacturing 13.1% 5.7% Personal, social and business services 12.4% 3.7% General Government services 9.7% 4.1% Transport and communication 9.5% 9.2% Housing 7.2% 2.4% Financial intermediation 3.5% 4.3% Construction 2.8% 13.8% Electricity, gas and water supply 1.8% 4.2% Mining and quarries 1.6% 14% Source: Central Bank of Nicaragua. Based on average percentage growth in the last five years.
DEVELOPING THE ENERGY SECTOR Since 2007, the Government of Nicaragua set out to: Increase generation capacity, Expand coverage, and Go green, as part of its key development strategies 2007 *2015 2017 21% 26% 46% 54% 74% 79% Installed Capacity: 1,346 MW Installed Capacity: 819 MW Expected Capacity: 1, 666 MW Thermal Renevable Energy Nicaragua has expanded its power supply from 54% in 2007 to 85% in 2015. It is estimated that Nicaragua will reach a 90% coverage by 2017. Source: Nicaraguan Energy Institute INE (for its acronym in Spanish); Ministry of Energy and Mines (MEM, for its acronym in Spanish), . *Estimated data
GROWING IN FDI INFLOWS 18% annual compound growth rate 1,600 1,449 1,355 1,400 1,243 1,222 1,200 936 1,000 US$ Million 800 626 600 508 434 382 400 282 200 ‐ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* Projections for 2015 indicate that Nicaragua’s FDI inflows will have reached approximately US$1.2 billion, thus representing a decrease of approximately 15% versus 2014. Source: Central Bank of Nicaragua, Ministry of Development, Industry and Trade and PRONicaragua. *Projections
EXPANDING EXPORTS 11 % compound annual growth rate 6,000 5,143 5,005 4,839 4,744 5,000 4,293 4,000 3,425 US$ MIllion 2,736 3,000 2,625 2,468 1,946 2,000 1,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 It is estimated that 2015 exports will show a performance similar to that of 2014. Source: Central Bank of Nicaragua.
2015 MAIN EXPORT PRODUCTS Main Export Products Textile and Apparel (26.7%) Cigars and Tobacco (4.4%) • • Automotive Harnesses (11.5%) Dairy Products (4.0%) • • Bovine meat (9.2%) Sugar (3.2%) • • Coffee (9.2%) Shrimp (2.7%) • • Gold (6.4%) Peanut (2.2%) • • Source: Ministry of Development, Industry and Trade (MIFIC). October 2015
MARKET ACCESS Nicaragua constantly seeks to increase its access to the world’s most important markets in order to consolidate itself as the ideal export platform. Countries Agreements United States, Mexico, Panama, Taiwan, Dominican Free Trade Agreements Republic, Chile & European Union Nicaragua, Guatemala, El Salvador, Honduras & Costa Central American Common Rica. Additionally, free movement of capital, services Market and human resources among CA ‐ 4 countries. Generalized System of Preferences Japan, Norway, Canada, Russia and Switzerland. Venezuela, Ecuador, Bolivia, Cuba, Antigua & Barbuda, ALBA agreement Dominica, and St. Vicente and the Grenadines South Korea, Canada, Peru, Bolivia. ALADI (Argentina, Bolivia, Brazil, Chile, Colombia, Agreements under Negotiation Ecuador, Mexico, Paraguay, Peru, Uruguay, Venezuela y Cuba) Source: Ministry of Development, Industry and Trade (MIFIC).
SAFETY INDICATORS 2015 Security Risk Index 2014 Homicide Rate (per every 100,000 inhabitants) 80 68 80 70 64 64 68.6 66 70 60 54 50 60 50 50 40 32 40 29 31 30 30 18 20 16 20 9.5 8 10 10 0 0 Nicaragua Costa Rica Panamá Guatemala Honduras El Salvador Source: Commission of Police Chiefs and Directors of C.A, Mexico, the Caribbean Source: Economist Intelligence Unit , 2015 Security Risk Report. and Colombia. In 2014, Nicaragua ranked as the third most pacific country in the Central American and Caribbean region in the Global Peace Index, published by the Institute for Economics and Peace. The report measures factors such as the level of safety in society, the level of international conflicts and the level of militarization. Nicaragua´s high levels of public safety have earned it a recognition of being one of the safest countries Nicaragua´s high levels of public safety have earned it a recognition of being one of the safest countries in the region in the region
2015 LABOR MARKET RISK Nicaragua: Among the most reliable labor markets in the region. 90 82 80 68 70 64 64 64 64 61 57 57 57 57 60 54 50 50 46 50 39 36 40 32 30 20 10 0 Nicaragua is the Central American country with the lowest labor risk after ‐ Costa Rica. This index measures various indicators such as: strength of unions, labor disputes, wage restrictions and hiring and firing regulations. Source: Viewswire.com, Economist Intelligence Unit. Note: 100 = More Risky.
2016 MINIMUM WAGE Monthly in Hourly in Sector US$ US$ Agricultural 172.8 0.83 Fishing 262.8 1.26 Mines and Quarry 310.4 1.49 Manufacturing Industry 232.4 1.11 Free Zones Regime Industry 242.4 1.16 Micro and Small Craft Industry and National Tourism 186.6 0.89 Electricity, Gas and Water, Commerce, Restaurants and Hotels, 317.0 1.52 Transport, Warehouse and Communications Construction, Financial Establishments and Insurance 386.8 1.85 Community, Social, Domestic and Personal Services 242.3 1.16 Central and Municipal Government 215.5 1.03 *Salaries include fringe benefits (48.5%). Average exchange rate for 2016: C$28.62 = US$1. Source: Ministry of Labor of Nicaragua (MITRAB, for its acronym in Spanish).
BUILDING A SOLID EDUCATION FOUNDATION 30,793 10 295,885 bilingual high students in 16 students in 17 areas of technical different technical schools and 19 training courses careers language centers 2014 University Enrollment 5 Economy and Business bilingual college programs 24% Engineering and Architecture 29% with more than 20,000 enrolled students Political Science and Law 7% Medical Science 173,000 Agricultural 11% 21% students enrolled Other Areas of Study 9% in 49 universities Sources: Technological Institute (INATEC for its acronym in Spanish), and studies of PRONicaragua.
LEGAL FRAMEWORK FOR FOREIGN INVESTMENT The Foreign Investment Promotion Law (344) offers investors fundamental guarantees such as: • Full currency convertibility • Freedom to expatriate all capital and profits • Full international ownership • No discriminatory treatment for foreign investors • Full protection of intellectual property rights, patents, and brands Additionally, the Mediation and Arbitration Law (540) governs two alternative methods to the judicial process to expeditiously solve any disputes resulting from contractual relations between private parties.
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