Logo de Confidencial Digital




Finance Minister’s Fall Causes “Aftershocks and Fear” in the Public Sector

Juan S. Chamorro: The “general manager” of the regime falls in disgrace, he knows “a lot” about contracts and family businesses; “many are scared”

Iván Acosta, during the presentation of a report of the Ministry of Finance and Public Credit // Photo: Archivo | Gobierno

Carlos F. Chamorro

25 de junio 2024


The surprising fall of Iván Acosta as Minister of Finance after 12 consecutive years in the position has unleashed “aftershocks and fear” among senior government officials, sources linked to the public sector revealed to CONFIDENCIAL. Acosta had become the main economic operator of the regime together with Ovidio Reyes, president of the Central Bank.

The Minister of Finance was “the general manager of the economic operation of the dictatorial regime, because the Minister of Finance is a general manager of the State, so he handles a lot of information,” explained economist Juan Sebastián Chamorro, a former political prisoner exiled in the United States and member of the Monteverde Nicaraguan Democratic Concertation (Concertación Democrática Nicaragüense Monteverde).

Acosta handled information “not only on public finances and contracting, but also on family and business dealings, and that must have frightened many people, both in the public sector as well as in this emerging private sector that is currently bidding for contracts,” said Chamorro.

In an interview for Esta Semana and CONFIDENCIAL, the economist analyzed the consequences of Acosta's departure, (officially presented as a resignation), for the Ministry of Finance, now in charge of former ministerial leader Bruno Gallardo. In the interview - which was transmitted through the YouTube channel Confidencial Nica, on Sunday, June 23, at 8:00 PM, to defeat official censorship in Nicaragua - Chamorro also comments on the impact that the fall in coffee, sugar, dairy, and shrimp exports is having on the external sector.

“It is going to be very difficult, as Government economists have announced, for China to replace the United States or Central America, which are the main trading partners and will continue to be so for market and geographic reasons, for access to markets that still exist, and which Ortega is putting at risk,” said Chamorro, about the minimal impact that the Free Trade Agreement with China has had on exports.

It is imperative to analyze what the fall of the Minister of Finance, Iván Acosta, means after 12 consecutive years in office, having been the main economic operator of the regime together with the President of the Central Bank, Ovidio Reyes. What is behind the fall of Iván Acosta?

There is a lot of contradictory information. He is in jail, he’s free, or he was seen in this restaurant. But regardless of where he is, it is a significant change. Ivan Acosta was not part of the family's inner circle, but he was part of the immediate circle, he was an economic and political operator. 

From the time when there was some communication with the private sector in 2014-2017, there was a rumor that (Rosario) Murillo's treatment of him was quite derogatory, he was not a person she trusted very much and rather came from the side of Bayardo Arce's economic team.

But, regardless of this, he is a person who knows a lot, he is the general manager of the operation called the dictatorial regime because the Minister of Finance is a general manager of the State, so he knows a lot of information. This will be handled with tweezers by the dictators, to see what to do with it, but it is something that must also frighten many people close to the dictators.

The new Minister of Finance, Bruno Gallardo, was a civil servant in the Ministry of Finance but is better known as a veteran teacher's union leader in the 1970s. He later trained as a lawyer. What are his credentials in public finance management for this appointment as Finance Minister?

None. He is not known to have any relevant experience, and I think it is relatively irrelevant who holds these ministerial positions, when power is concentrated in the figure of dictators. They are people who lend their signature. These ministers are simply operators. This Mr. Gallardo is someone who has been in the business arena for some time, but he is not very well known in the financial sphere.

The Treasury: an "intervened ministry"?

Will the Treasury now be a ministry intervened by Vice President Rosario Murillo? What role will the current president of the Central Bank, Ovidio Reyes, who was the person who together with Acosta practically led the technical team of the Government, have in this?

Ovidio Reyes will have more power because he becomes the last of these original ministers who assumed the portfolio and has a background in the Ministry of Finance and Public Credit. He managed an important office adjacent to the minister, so he knows details about budget management and international negotiations. From now on, if he is not purged as well, he will have more powers than before due to Acosta's departure.

I am also referring to the representations. Let us remember that the Minister of Finance and the President of the Central Bank share governorships, in both the World Bank and the Monetary Fund; they also participate in CABEI meetings, for example, and other international organizations. So soon we will be seeing appointments of Ovidio Reyes, maybe that could be a sign that he may already have new responsibilities, besides being president of the Central Bank. 

The weakening of the Ministry of Finance is at stake with the departure of Acosta and the appointment of Gallardo. Could it have any impact on the stability of the Government's economic policy management?

Certainly, it is a very important ministry. As I was saying, it is the general manager of the State. All the public resources, the execution of the budget, the elaboration of the General Budget of the Republic in current expenditure, along with the preparation of all public investments, and negotiations with international organizations, which have very little left for loans. 

So this is a hard blow to the credibility of Ortega's economic policy, no matter how much of a puppet the ministers are. The international media is taking note of this "resignation" and even more so if it can be detected that it is associated with mismanagement, which everything seems to indicate that it is. 

This does not help credibility at a time when they had celebrated the elevation of the risk category through a risk rating agency. But this was simply a product of family remittances, this is a rather complicated issue and perhaps that is why they want to hide the fact that the minister is in jail, because there are also versions that this is so.


Get the most prominent news about Nicaragua, every Wednesday, directly to your inbox.

In any case, the level of information, not only of public finances but also of family and business management and contracting is known to the Minister of Finance. He is a person with a lot of information who has fallen in disgrace and that must have frightened many people, both in the public sector as well as in this emerging private sector that is currently bidding for tenders.

The Fall of Exports in Nicaragua

Let's go to the subject of exports. Data from the Government's National Production Plan confirm that there is a trend towards a reduction of production and exports in different items such as coffee, sugar, seafood, milk, beans, is there a cause that encompasses this trend, or are there particular situations of these products?

Each export product has its own dynamics. Some depend more on international prices, others less, others on weather conditions, but there is a specific pattern. Indeed, in dairy products, particularly milk and cheese. There is a massive reduction of 12% in cheese. 

Weather factors explain this partially, but we must also remember that through fiscal harassment, the Government caused the closure of Prolacsa, which is an important processing company. So there was a strong movement in the dairy industry this year.

In the case of coffee, there was a significant drop of 25%. This is not explained by a drop in prices, rather the price is closing between 220 and 225 dollars per quintal. There is no explanation in that sense, but we also come back to the same thing. It was closed for different reasons and Cisa Exportadora or Mercon, as it is formally known, was confiscated. So this also generates a conflict, a problem, in coffee exports caused by the Government.

There is also a significant drop in sugar. Apparently, the explanation that we have been able to find out is that this is due to export restrictions, as a result of the fact that the Panama Canal is operating irregularly due to water problems during the dry season, and there has been a significant drop.

Shrimp exports have fallen by 30% and this is mainly explained by the fact that we no longer have a Free Trade Agreement with Taiwan. The fall in exports from Taiwan, which had been growing gradually and solidly in some products, fell because Nicaragua stopped having trade with that country, 44% to be exact in recent years.

And there are some elements (about which) we have not found an explanation. Automotive harnesses have a 10% decrease, even though these harnesses are going to Mexico. This is a good time in automotive production and for Mexico there is no lower demand, so probably, they are moving their operations elsewhere.

2024 does not look to be a good year for exports, both because of the agricultural issues and because of free trade zone exports, which have also fallen. And free trade zone exports have not fallen more in 2024 because they fell significantly in 2023, due to the closure of several free trade zones.

Does this have any impact on income, on employment? In the case of shrimp farming, for example, it is known that several companies operating in the Chinandega area have closed.

Indeed, some sectors are very labor intensive. Shrimp processing, for example, are factories that employ many people. This already impacted employment in the Chinandega area and the closure of all these shrimp companies is a very alarming sign.

Likewise, in the coffee sector, we have been saying since the crisis with CISA broke out, that it was not necessarily going to have an impact on production, because coffee is growing, but it was going to have an impact by eliminating a buyer that is 40 or 45% of the buyers' market. Then coffee producers would have fewer possibilities to whom to sell their product. This means a decrease in prices. So that is also part of the explanation for the 25% decrease in coffee exports that we are seeing at the moment.

FTA with China does not compensate

Every day, in official media, there are announcements of shipments or exports that are being made to China or imports of machinery from China for certain projects. The Free Trade Agreement with China has been in force for more than six months now. Does the trade relationship with China have any compensatory effect on this drop in exports?

Very little is being exported to China, in spite of the happy announcements of the Minister of Economy that said that they were going to reach hundreds of millions of dollars, it is still a very incipient export. The Free Trade Agreement with China is serving, instead of making products cheaper, so that the population can have better access through competitive imports. Import contracts are being distributed among government cronies, causing unfair competition to existing traders and also having the opposite effect, enriching a few, as a result of this Free Trade Agreement.

In agricultural products it is very difficult to be competitive in China, because you have countries like Vietnam that produce the very same shrimp, coffee, the same fruit, and are practically on China's doorstep. Livestock, for example: Indonesia produces cattle, Australia produces and exports to China. It is very expensive to cross the Pacific Ocean and still be competitive.

The reason why the Free Trade Agreement with Taiwan was working is because it is an extremely rich economy in gross domestic product per person, but it also has a policy of privilege to the countries that recognized it. So there was some economic activity with Taiwan because of that. But it is going to be very difficult, as Government economists have announced, for China to replace the United States or Central America, which are the main trading partners and will continue to be so for market reasons, for geographic reasons, for access to markets that still exist, and which Ortega is putting at risk, particularly CAFTA. We are observing a 17% decrease in exports to the United States. If exports are falling, then your relationship with your main partner is falling, but it is not because these exports are going to China. China's growth is almost negligible.

This article was published in Spanish in Confidencial and translated by our staff. To get the most relevant news from our English coverage delivered straight to your inbox, subscribe to The Dispatch.


Your contribution allows us to report from exile.

The dictatorship forced us to leave Nicaragua and intends to censor us. Your financial contribution guarantees our coverage on a free, open website, without paywalls.

Carlos F. Chamorro

Carlos F. Chamorro

Periodista nicaragüense, exiliado en Costa Rica. Fundador y director de Confidencial y Esta Semana. Miembro del Consejo Rector de la Fundación Gabo. Ha sido Knight Fellow en la Universidad de Stanford (1997-1998) y profesor visitante en la Maestría de Periodismo de la Universidad de Berkeley, California (1998-1999). En mayo 2009, obtuvo el Premio a la Libertad de Expresión en Iberoamérica, de Casa América Cataluña (España). En octubre de 2010 recibió el Premio Maria Moors Cabot de la Escuela de Periodismo de la Universidad de Columbia en Nueva York. En 2021 obtuvo el Premio Ortega y Gasset por su trayectoria periodística.