While Mauritania is an agricultural country, historically largely dependent on livestock production, its significant iron ore deposits have been the backbone of the export economy in recent years. The droughts of the 1970s and 1980s transformed much of Mauritania, as the herds died off and the population shifted to urban areas. In 1960, 85% of the population lived as nomadic herders. By 1999, that percentage had fallen to 5%, and nearly one-third of the population lives in the district of Nouakchott. Offshore oil reserves have been identified, but have not yet been developed and their precise amount is not known. Gold and diamond prospecting hold potential as growth areas.
Most of Mauritania is desert or semiarid. Less than 1% of Mauritania receives sufficient rain for crop production, and that 1% is drought-prone. Leading staple crops are millet, sorghum, rice, corn, sweet potatoes and yams, pulses, and dates. The country is not agriculturally self-sufficient, and this situation has been aggravated by increasing urbanization.
In 2002, iron ore sales accounted for approximately 60% of exports. Fish exports contributed around 40% of exports. The contribution of livestock herding and agriculture was 25% of GDP and employed about half of the workforce, but covered only a small percentage of the country's needs. The droughts of the 1970s and 1980s devastated the herds, but the FAO estimates that they had returned to pre-drought numbers by 1991. The recomposition of the Mauritanian herd and the development of water supplies have been a prime objective of the government.
The droughts have led to a buildup of foreign debt leaving the country dependent on financial aid flows from international donors. Mauritania became eligible for debt relief under the IMF/World Bank's Heavily Indebted Poor Countries (HIPC) initiative in 2000, and debt service relief was to reach $1.1 billion over time. Foreign assistance accounted for 90% of investment from 1998–2001.