Nicaragua has had decent economic growthin the past decade, which has contributed to substantialpoverty reduction (the largest in Central America), as wellas improvements in human development indicators. Fiscalaccounts have deteriorated recently, which may pose somechallenges to the sustainability of current levels offinancing for social sector expenditures. Better planningand monitoring of social spending are needed to improveNicaragua’s budget management. While Nicaragua has amedium-term development plan, the use of results-orientedbudget formulation is still in its early stages. Low andinefficient public spending in education, coupled withoutdated legal and institutional frameworks and high dropoutrates present are significant barriers to increasingenrollment and providing quality education. Progress in keyareas such as child and maternal mortality, but lowest percapita health spending in Central America, as well asinstitutional and governance challenges limit coverage andquality of services. There is need for increased spending insocial assistance interventions, better coordination amongimplementing agencies, and revised targeting to ensuredecent coverage of programs among the poorest. Governmentpolicies also reflect the need for improved controls andimplement social audits, which are considered a pillar ofparticipatory governance. However, these still need to beimplemented on a broader scale and publicly disseminated.
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