Drastic cuts to the country’s budget contained in a plan presented by Iván Acosta, the Minister of Finance and Public Credit, were approved today by 72 votes to 15 (no abstentions) in the National Assembly of Nicaragua. The reforms cut the 2018 income (mainly from taxes) by 7.462 billion Córdobas, equivalent to 9.2% of the budget.
According to Acosta, the sociopolitical crisis in Nicaragua has left losses of US $ 525 million between April and July and the loss of almost 120,000 jobs. Over half of those jobs (71,000) were workers who were paying into an already financial strapped Nicaraguan Institute of Social Security (INSS) which was the catalyst for the unrest that started in April.
Projects under the Public Investment Plan (PIP) will be hit with an 18.5% cut;
- Education – construction and repairs to schools will be cut by 625.03 million Córdobas.
- Healthcare – the Ministry of Health (MINSA) will have 30 projects cut as 843.9 million Córdobas is cut from their budget. Most of those projects were construction, repairs and re-equipping health centers and hospitals.
- Local Authorities – Municipal Transfers (tax income that is redirected to the 153 different municipalities) for PIP projects will be cut by 749.04 million Córdobas.
In addition, the Ministry of Transport and Infrastructure (MTI) will have their budget cut by 393.6 million Córdobas, The Nicaraguan Water Supply and Sewerage Company (ENACAL) will face a 147.2 million Córdoba cut and The Urban and Rural Housing Institute will lose 30 million Córdobas in loans for moderate-income families.
Power projects totaling 326 million Córdobas will be suspended. Those include rural electrification, renewable energy projects, solar powered systems in the Caribbean and the geothermal plant at the Cosigüina volcano in the northwest of Nicaragua.
The 2018 budget was originally approved in December 2017 with projected revenues of 80,773 billion Córdobas (up 10.5% on 2017) and expenses of 87,127 billion Córdobas with an 8.2% increase compared to 2017.