Nicaragua Export Data: $7.38B in 2023, Up 0.25%

CAFTA-DR Turned Nicaragua Into an Apparel and Electronics Exporter

Nicaragua exported $7.38 billion worth of goods in 2023, essentially flat from $7.36 billion in 2022, up just 0.25%. Knitted apparel led every category at 18.81% of the total, worth $1.39 billion, more than any other classification. CAFTA-DR entered into force in Nicaragua on April 1, 2006, allowing duty-free apparel exports to the USA under a "yarn-forward" rule of origin that requires garments to be cut and sewn from regionally produced fabric. That agreement is a big reason the USA bought 50.24% of Nicaragua's exports in 2023, worth $3.71 billion, more than every other destination combined. Electrical machinery added a further 11.51% of exports ($849 million). This likely reflects similar free-trade-zone assembly work built around the same duty-free access to the American market, though this category covers a wider range of components than apparel alone. Together, apparel and electrical machinery make up close to a third of everything Nicaragua sells abroad, a concentration that traces back almost entirely to one trade agreement and one buyer. That kind of dependency cuts both ways. It has given Nicaragua's manufacturing sector a reliable, duty-free channel into the world's largest consumer market. But it also means any future change to CAFTA-DR terms, or to US trade policy more broadly, would ripple through a meaningful share of the country's entire export economy almost immediately.

Gold and Cigars Round Out a Surprisingly Varied Export Mix

Natural pearls, precious stones and precious metals, mostly gold, supplied 15.70% of exports, worth $1.16 billion, Nicaragua's second-largest category. Gold ranks third among Nicaragua's main exports, with the El Limon and La Libertad mines standing as the country's largest individual exporting operations. Tobacco contributed 6.27% ($463 million), almost entirely premium cigars. Nicaragua exported more than 186 million handmade premium cigars to the United States in 2020, more than any competing country for five consecutive years, with the Esteli region doubling its factory count from 40 to 80 over a decade. That single region has become one of the world's most important premium cigar manufacturing hubs, rivaling the more famous Cuban industry in scale. Nicaragua's advantage in tobacco leaf quality has combined with lower labor costs to build that position over time. None of the trade restrictions that have historically limited Cuban cigars from reaching American consumers apply to Nicaraguan producers, letting its cigar makers capture a share of the premium market that would have seemed unlikely a generation ago.

Meat and edible offal supplied 9.75% of exports ($719 million), and coffee, tea and spices contributed 8.27% ($610 million). Nicaraguan coffee, grown mainly in the Jinotega, Matagalpa and Nueva Segovia regions, sends roughly half its export volume to the USA. Apparel not knitted or crocheted added 4.43% ($327 million), and dairy products contributed 3.78% ($279 million), a category built on the same cattle ranching tradition that also produces Nicaragua's meat exports. Fish and crustaceans supplied 3.63% ($268 million), much of it shrimp and lobster pulled from the country's Caribbean coast, and sugar closed out the top ten at 3.12% ($230 million), grown on plantations that have supplied Nicaragua's export economy for well over a century.

The USA and Regional Neighbors Dominate Nicaragua's Export Markets

Mexico ranked second among Nicaragua's export partners at 13.68% ($1.01 billion), and El Salvador followed at 6.54% ($482 million). Canada added 5.78% ($427 million), and Honduras contributed 4.99% ($368 million). Costa Rica supplied 3.25% ($240 million), and Guatemala added 2.21% ($163 million). Belgium contributed 1.20% ($88 million), and Panama added 1.06% ($78 million). The United Kingdom rounded out the top ten at 0.87% ($64 million). Together, the USA, Mexico and El Salvador made up 70.46% of total export value, one of the more concentrated top-three shares in this entire dataset. That regional cluster of Central American neighbors, Mexico, El Salvador, Honduras, Costa Rica and Guatemala combined, reflects both geographic proximity and overlapping trade agreements that link these economies more tightly to each other than to more distant markets.

Export values climbed steadily over the past five years. The total stood at $5.27 billion in 2019, dipped slightly to $5.09 billion in 2020 as the pandemic disrupted global trade, then jumped to $6.49 billion in 2021 and $7.36 billion in 2022, before holding essentially level at $7.38 billion in 2023. That plateau after two years of sharp growth suggests Nicaragua's export economy may be settling into a new, higher baseline rather than continuing to expand at the pace seen earlier in the recovery.