November 10, 2022
Nicaragua
Nicaragua, a Central American country bordering Honduras
mass protests. The Ortega administration’s repressive
and Costa Rica, is experiencing significant political
response—which resulted in over 300 dead, thousands
repression under the authoritarian rule of President Daniel
injured, and hundreds detained and tortured—generated
Ortega, aged 76, and his wife, Vice President Rosario
condemnation worldwide.
Murillo, aged 71. The erosion of democracy under the
Ortega-Murillo government has strained relations with the
Despite domestic and international calls for Nicaragua to
United States and raised congressional concerns. Congress
reform its electoral laws and hold free and fair elections, the
has sought to monitor and refine U.S. sanctions policy
Ortega administration has continued to use antidemocratic
toward Nicaragua.
practices. In 2021, authorities arrested 40 opposition leaders
and barred them from participating in national elections.
Figure 1. Nicaragua Map
The Organization of American States resolved that these
elections had “no democratic legitimacy.”
Nicaragua at a Glance
Population: 6.6 mil ion (2022, IMF est.)
Area: 46,883 square miles, slightly smaller than Mississippi
GDP: $15.8 bil ion (2022, current prices, IMF est.)
Per Capita GDP: $2,380 (2022, current prices, IMF est.)
Key Import Partners: U.S. (24.9 %), China (12.5 %),
Mexico (8.8 %), Netherlands (7.4 %) (2021, TDM)
Key Export Partners: U.S. (56.5 %), Mexico (11.8 %), El
Salvador (6 %), Honduras (5.2 %) (2021, TDM)

Sources: International Monetary Fund (IMF); Trade Data
Source: Congressional Research Service.
Monitor (TDM).
Political Situation

Daniel Ortega first rose to prominence as a leader of the
Currently, the government has closed more than 2,000
leftist Sandinista National Liberation Front (FSLN), which
nongovernmental organizations involved in such issues as
toppled the U.S.-aligned Somoza dictatorship that ruled
human rights, medical care and resources, education, and
Nicaragua from 1936 to 1979. Ortega was elected president
civil and social matters. According to the U.N. High
in 1984 but was defeated in 1990 after more than a decade
Commissioner for Human Rights, the Nicaraguan
of armed conflict between the FSLN government and U.S-
government held more than 200 political prisoners as of
backed Contra insurgents. From 1990 to 2001, Nicaragua
October 2022. More than 200,000 Nicaraguans have fled
held three relatively free and fair elections in which power
the country for political and economic reasons since 2018,
changed hands peacefully between non-Sandinista
according to the U.N. High Commissioner for Refugees. A
presidents. Ortega returned to power in 2006 in elections
majority of those displaced have sought asylum in Costa
that many observers also judged to be free and fair.
Rica, and some have sought entry into the United States.
In ensuing years, Ortega’s FSLN government supporters
Economic Environment
increasingly manipulated democratic processes. Subsequent
Nicaragua has the second-lowest per capita income in the
elections won by Ortega in 2011 and 2016 were widely
Western Hemisphere, according to the World Bank. The
judged to be seriously flawed. In 2021, during Ortega’s
Ortega administration generally has maintained market-
most recent election (his fifth overall and fourth
oriented economic policies, and economic growth averaged
consecutive term), Ortega was widely condemned for
4.2% from 2007 to 2017, according to the International
eliminating all viable candidates and parties from
Monetary Fund (IMF). However, Nicaragua’s gross
participation.
domestic product (GDP) contracted by 3.4% in 2018, 3.8%
in 2019, and 1.8% in 2020. Unemployment nearly doubled,
In the past, the Ortega government’s social welfare
from 6.2% in 2019 to an estimated 11% in 2021. Experts
programs have helped improve Nicaraguans’ standard of
have attributed these recent years of economic downturn to
living and maintain a strong support base for the FSLN,
the effects of the country’s political crisis, the Coronavirus
which Ortega used to consolidate power. In 2018, however,
Disease 2019 (COVID-19) pandemic, and two major
government-approved tax reforms that included tax
hurricanes.
increases and a reduction of social security benefits sparked
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Nicaragua
The Nicaraguan economy began to recover in 2021, with
targeted sanctions, including asset blocking sanctions and
10.3% growth. Nevertheless, the IMF forecasts GDP
visa restrictions, on members of the Nicaraguan
growth will slow to 4.0% in 2022, as high inflation and
government, legislature, and judiciary, along with others
weaker global demand for the country’s textile and coffee
determined to be responsible for undermining democracy
exports take a toll on Nicaragua’s small, open economy.
and threatening stability in Nicaragua. To date, the Treasury
Economic growth could slow further due to U.S. sanctions
Department has imposed blocking sanctions on 44
on Nicaragua’s gold sector, announced in October 2022.
individuals and 11 entities and the State Department has
According to the Nicaraguan Central Bank, gold is
imposed visa restrictions on several hundred officials.
Nicaragua’s top export and accounted for $867.6 million
worth of exports in 2021, including roughly $839.8 million
Individuals who have been sanctioned include Vice
in exports to the United States.
President Murillo; four of the Ortega-Murillo children; and
numerous government officials, including the national
U.S. Policy
security adviser, defense minister, commander-in-chief of
U.S. policy toward Nicaragua aims to promote the
the Nicaraguan Army, and vice minister of finance and
reestablishment of democratic practices, including free and
public credit. Entities designated for economic restrictions
fair elections, support for human rights, and attention to
include the Government of Nicaragua, the Nicaraguan
humanitarian needs. The Biden Administration, with
National Police, the Attorney General’s Office, the
support from Congress, has enhanced U.S. sanctions against
Nicaraguan Petroleum Distributor (DNP), the state-owned
Nicaragua in a stated effort to advance those policy goals
Nicaraguan mining company Empresa Nicaraguense de
and hold the Ortega government accountable for its
Minas, and the General Directorate of Mines.
antidemocratic practices and attacks on civil society.
Congressional Action
The Ortega government has pushed back against pressure
In November 2021, Congress enacted the Reinforcing
from the United States and other international actors. In
Nicaragua’s Adherence to Conditions for Electoral Reform
2022, for example, Nicaragua announced its intention to
(RENACER) Act of 2021 (P.L. 117-54). The act requires
withdraw from the OAS, rejected a U.S. envoy, severed
the Administration to align U.S. diplomacy and the use of
diplomatic ties with the Netherlands, and declared the head
targeted sanctions to advance free, fair, and transparent
of the European Union delegation persona non grata.
elections in Nicaragua, among other provisions. The act
Nicaragua also has taken steps to forge closer ties with
also requires the State Department to monitor, report on,
other global powers by deepening its relationship with
and address corruption and human rights abuses in
Russia and establishing diplomatic relations with China.
Nicaragua.
U.S. Assistance
The RENACER Act amends the Nicaragua Human Rights
For FY2022, the Biden Administration requested a total of
and Anticorruption Act of 2018 (NHRAA; P.L. 115-335) to
$15 million in assistance to support democracy, human
read as the Nicaragua Investment Conditionality Act of
rights, and governance programs in Nicaragua. Congress
2018. The NHRAA restricted international financial
appropriated not less than $15 million for such activities in
institutions from extending financial and technical
the Department of State, Foreign Operations, and Related
assistance to the Nicaraguan government, except for basic
Programs Appropriations Act, 2022 (P.L. 117-103, Division
human needs and democracy promotion. The NHRAA also
K). For FY2023, the Administration again requested $15
imposed sanctions on foreign persons who engage in
million to support civic participation, democratic alliances,
conduct that constitutes a serious abuse or violation of
independent media, and the protection of human rights. The
human rights against persons associated with the protests in
FY2023 foreign aid appropriations bills reported in the
Nicaragua that began on April 18, 2018. The RENACER
House (H.R. 8282) and introduced in the Senate (S. 4662)
Act also amended the Northern Triangle Enhanced
would provide not less than $15 million for democracy
Engagement Act (P.L. 116-260, Division FF, Section
programs for Nicaragua, including support to civil society.
353(b)), to include Nicaragua and impose sanctions on
those who undermine democratic practices and obstruct
In addition to democracy aid, the U.S. Agency for
investigations related to corruption.
International Development (USAID) provided nearly $18
million in humanitarian assistance to support Nicaraguans
Other Nicaragua-related measures have been introduced in
contending with the effects of the COVID-19 pandemic and
the 117th Congress. The Nicaragua Free Trade Review Act
Hurricanes Eta and Iota in FY2020 and FY2021. Since
of 2021 (H.R. 3964), for example, would require the U.S.
October 2021, the United States has provided more than 1.6
Trade Representative to report to Congress on the extent to
million vaccine doses to Nicaragua through the COVID-19
which Nicaragua is complying with the Dominican
Vaccines Global Access (COVAX) mechanism. In addition
Republic-Central America-United States Free Trade
to U.S. support, Nicaragua received over $400 million in
Agreement (DR- CAFTA).
pandemic-related assistance from the Inter-American
Development Bank, the IMF, and the World Bank.
Karla I. Rios, Analyst in Latin American Affairs
U.S. Sanctions
IF12247
In response to increasing authoritarianism and repression in
Nicaragua, the United States has imposed numerous


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Nicaragua


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