Caribbean & Central America - September 2016 (ISSN 1741-4458)

“Mining for All”. On 16 and 17 August, Managua hosted the II International Mining Congress. Entitled “Mining for All”, the event was organised by the Nicaraguan mining chamber (Caminic), with the support of the energy & mining ministry and the country’s official investment agency, ProNicaragua. The event aimed to highlight the importance of responsible mining practices with the participation of public and private institutions that promote mining as a factor of social and economic development. It was held as part of efforts by the Frente Sandinista de Liberación Nacional (FSLN) government led by President Daniel Ortega to attract investment to the sector which, on official figures, represented 3% of the country’s GDP in 2015.

According to the state mouthpiece el19digital, in 2006, the year before Ortega took office again, gold and silver production amounted to 109,000 and 94,000 troy ounces respectively. By end of 2015, gold and silver production reached 274,000 and 586,000 troy ounces, respectively.

According to Nicaragua’s export agency (Cetrex), in the first eight months of 2016, gold was the country’s third leading export, accounting for US$229m of the total US$1.6bn. This was behind coffee (US$360m) and beef (US$279m). While gold was up on the same period the previous year (when it reached US$213m), overall exports were down from US$1.8bn over the same period.

Meanwhile, the need to attract investment to the mining sector (and other sectors) was indicated by a June 2016 report by the United Nations (UN) Economic Commission for Latin America & the Caribbean (Eclac) which showed that foreign direct investment (FDI) flows to Nicaragua declined by 5% in 2015, to US$835m. The report noted that since 2014, the country’s maquiladora (assembly plant) industry had felt the effects of the change in US policy, which entailed removal of the tariff preference level (TPL) provisions. It is estimated that some 3,000 jobs have been lost and textile exports have fallen by 5% as a result of this change. The same Eclac report noted that to counter the effects of this measure, the Nicaraguan government was in trade talks with Canada and Korea which, if successful, could bring in some US$160m in new investment.

• Growth

On 29 August, the president of Nicaragua’s central bank (BCN), Ovidio Reyes, presented a report which forecast that Nicaragua’s GDP would grow between 4.5%-5% for 2016, with inflation expected to close at between 4.5%-5%. A July 2016 report by the United Nations’ Economic Commission for Latin America & Caribbean (Eclac) notes that Nicaragua posted 4.9% GDP growth in 2015 – the third highest rate in Central America after the Dominican Republic (7%) and Panama (5.8%).