Niger is an arid, landlocked country with much of its territory forming a portion of the Sahara. Most of its people live in a marginally productive and highly drought-prone band of arable land along Niger's southern border with Nigeria. Although at one time uranium mining was a mainstay of the Niger economy, revenues from uranium dropped by almost 50% in the late 1980s due to a decline in world demand for uranium. Export earnings declined from 22% of GDP in 1987 to 16% of GDP in 1998.
Subsistence agriculture prevails in the less than 3% of the country that is under cultivation. Agriculture and livestock production employed an estimated 95% of the labor force.
In January 1994 France devalued the CFA franc, causing its value to drop in half overnight. The devaluation of the CFA franc improved Niger's trade relationship with Nigeria, and boosted revenue from the export of such products as livestock, peas, onions, and the cotton industry. As of 2003, Niger had yet to recover from the devaluation, in 1993 the current account to GDP ratio was close to zero, afterwards reaching an average negative 10%. Exports could not keep pace with the rising price of imports.
The Niger economy relies on bilateral and multilateral aid, and the government has been encouraged to restructure the economy by the International Monetary Fund and the World Bank. With a history of military rule, and a bad debt repayment record, foreign aid has been slow coming. However, Niger became eligible for debt relief under the IMF/World Bank Heavily Indebted Poor Countries (HIPC) initiative in 2000, in the amount of $115 million. The fact that population growth has outpaced GDP has been a cause of Niger's increasing poverty.
The restoration of democratic rule in 2000 saw an increase in foreign aid. The government's privatization of state-owned enterprises, particularly in the telecommunications and electricity sectors, was to promote investment in 2003, as was exploration for gold deposits and oil. An increase in tourism to Niger's scenic northern desert has been diversifying the economy.