Historically, Nicaragua's small industrial sector has
consisted primarily of food processing. Except for one
plant and one petroleum refinery, agro-processing
(slaughterhouses, meat packing plants, food processing
cooking oil plants, and dairy facilities) and the
animal by-products (candles, soap, and leather) have been
backbone of Nicaragua's urban industry. The 1960s was a
rapid growth of the industrial sector, as new external
established by the CACM allowed the growth of
plants in Nicaragua. Formation of new import-substitution
slowed in the 1970s, however, and the percentage of GDP
from industry dropped to only 23 percent in 1978.
Political and economic problems caused the industrial
to shrink in the years after 1978. The civil war caused
manufacturing output to decrease by one-quarter in 1979
the agro-industries, which represented 75 percent of the
industrial putout, idle capacity became a serious problem
the Sandinista victory in 1979. In the early 1980s, food
processing plants were operating at only 50 percent
sugar mills, 49 percent capacity; animal feed processing
70 percent capacity; fruit canning plants, 94 percent
and vegetable oil refineries, 42 percent capacity. The
government maintained a monopoly on beef processing
but here, too, idle capacity rose from 30 percent in the
between 1977 and 1979 to 85 percent by 1981. Idle capacity
this industry averaged 60 percent in subsequent years.
phenomenon resulted mainly from clandestine slaughter
illegal network of beef distributors, and the withholding
products by producers.
Although the government-controlled distribution system
created shortages, a black market thrived for milk,
chicken, and eggs, as well as livestock by-products such
and shoes. In the mid-1980s, Black-market prices soared,
essentials became next to impossible to obtain through
channels. As basic grains and other food became scarcer,
consumption in Nicaragua rose to the highest level in
America. Unable to buy corn, Nicaraguans ate beef.
before the imposition of the United States trade embargo
many ranchers instituted the wholesale slaughter of beef
dairy cows that they were unable to shift across the
Costa Rica or Honduras.
The industrial sector, which had grown only
the early 1980s, declined in the mid- to late 1980s as the
war escalated and United States markets dried up.
production dropped an average of 5 percent each year from
1989. By 1989 the industrial sector contributed only 19
to the nation's GDP and construction accounted for only 4
By President Chamorro's inauguration in 1990, only
percent of the pre-Sandinista era work force was still
in the skeletal industrial sector. A few larger-scale
including a cement production plant, a chemical plant, a
processing plant, and a petroleum refinery, were geared
domestic consumption. Even these suffered badly from
essential imports and the lack of skilled labor, however.
Data as of December 1993