Research and consulting in Djibouti

Country overview:

Drawing from extensive research and consulting, IOA has developed a deep, data-driven understanding of Djibouti. Our analysts describe this small, arid nation as possessing one critical resource: its geographic location. Positioned strategically along the strait connecting the Red Sea and the Indian Ocean, Djibouti’s location is a significant asset. Countries such as China, the US, and several European nations bolster its GDP by leasing land for military bases that oversee this crucial passage. Djibouti’s port, integral to landlocked Ethiopia’s trade, also owes its importance to the country’s location.

Djibouti has further strengthened its strategic position by establishing a Free Trade Zone, a key initiative that gained momentum following the 2023 parliamentary elections. This zone facilitates international trade, allowing goods to move efficiently in and out of the country. Despite these advancements, a large portion of Djibouti’s population continues to uphold traditional lifestyles, particularly as nomadic herders in the arid desert interior, underscoring the stark contrast between the nation’s modern trade hubs and its cultural heritage.

Key opportunities in Djibouti:

Positioned along the Red Sea, Djibouti occupies one of Africa’s most strategic locations for global shipping
The country’s Free Trade Zone has successfully attracted international trade and commerce
Unique features such as desert culture and attractions like Lake Assal offer untapped potential for tourism development

Key concerns/risks in Djibouti:

Djibouti’s foreign military bases and port are its only significant source of revenue
IOA research has found that conflict in the Middle East and terror attacks on Red Sea shipping have reduced port revenues
The arid Horn of Africa is the African region most vulnerable to global warming

Find out about how IOA can help you with research and consulting services in Djibouti

Tips on doing business in Djibouti:

Starting a business:

Djibouti offers a unique advantage in the region as business and property ownership are not restricted by local citizenship, residency, or work visa requirements
Foreigners are eligible for full property ownerships, with title deeds available through NIPA One Stop Shop. Authorities state that business registration can be finalised within 72 hours
(Read more at: https://www.theiguides.org/public-docs/guides/djibouti)

Doing business:

Djibouti has implemented pro-free trade policies to attract foreign investors, with no specific restrictions imposed on them. Since 2019, Djibouti has been a signatory to the Washington Protocol, permitting international arbitration for dispute resolution
Zone, an industrial port hub linked to People’s Republic of China (PRC) Belt and Road Initiative, serving as a crucial export gateway for East Africa

Culture and society:

Malaria is widespread, and foreign travellers are advised to take preventative measures
Nearly all FMCG goods are imported, resulting in higher costs compared to other countries in the region
Djibouti’s capital city is densely populated, with rental prices exceeding the regional average. For personal safety, visitors should avoid the borders with Eritrea and Somaliland