Doing business in Djibouti

There is quite a bit of interest in doing business in Djibouti, it is located in a part of the world that has some real growth potential. For companies looking to get in on the ground floor of a growing economy Djibouti is the place to be. That being said there are some real challenges that you are going to have to overcome in order to do business in Djibouti.

Djibouti is a very small country on the Horn of Africa. It has a population of just under a million people and it has one of the stronger economies in the region. Until the nineteen seventies Djibouti was a French colony and the influence of many years of colonial rule is still apparent in many ways. The country is a democracy but just how free the elections actually are is open to some dispute. The biggest problem that Djibouti faces is that its neighbour is Somalia. The difficulties next door can't help but spill over the border and have an influence in Djibouti.

The main reason that you would want to do business in this African country is that it is a free trade zone. The country is strategically located which makes it an ideal location for a transit port and a transshipment centre. In order to encourage this type of activity the government has made the country a duty free zone so that material can be shipped in and out without having to pay any taxes. This has been a huge help to the local economy since the country really has no other industry. There are few natural resources and the area is not good for farming. Djibouti is one of the wealthiest countries in the region, although that isn't saying much when you look at the other countries on the east coast of Africa.

In theory Djibouti should be a great place to do business and the the government have been trying to promote the county as such. In practice things are a little bit different. There are no restrictions on foreign companies doing business in Djibouti and they are supposed to be treated the same as local companies. The problem is that the large amount of bureaucracy and unscrupulous government employees makes it very difficult to do business. In fact Djibouti is consistently rated as one of the most difficult places in the world to do business.

The other issue that you are going to face if you want to do business in Djibouti is that the costs are very high. Infrastructure is not very good and what is there is very expensive to use. This is especially true when it comes to telecommunications. The other problem is finding employees. Despite having a seventy percent unemployment rate it is very difficult to find employees in Djibouti for all but the most menial jobs. Any skilled workers that you will need will have to be brought in from elsewhere. This will be very expensive since the cost of living in Djibouti is very high.