Distribution Channels


The first step to setting up a business, is to declare the business with a notary and then obtain a trading license from the Ministry of Finance. Catering and drinking establishments require a prior declaration with the Ministry of Interior, which will deliver a permit after a routine investigation. The employer is allowed to hire directly, but priority must be given to nationals unless the job requires skills unavailable locally. In any case, the national employment service should be informed for statistical purposes. A work permit is necessary for foreign employees. Once the staff is hired, the labor inspection office as well as the social security services must be informed within forty-eight hours. The business must be registered with the office of trade registry at the Ministry of Justice within two months. Also, the service for the promotion of investments, located at the Ministry of Presidential Affairs and Promotion of Investments, needs to be contacted in order to verify that all the requirements of the investment code have been fulfilled. Opening a local bank account is compulsory. Finally, the office of direct taxation must be informed within ten days after the business has started.

Djibouti has a population of 600,000, and more than half live in the city of Djibouti. Arabs and Somalis are the main traders and the most prominent ones export to Somalia, Ethiopia or Yemen. Structured distribution channels are not common in Djibouti; retailers go to a wholesaler or big businesses to buy the goods. Reliability and good after-sales service are valued by Djiboutians. Selling techniques are still at a basic stage. Advertising and trade promotion can be carried out in the government newspaper "La Nation," TV and radio at reasonable cost. Prices are determined by the vendor, as only the basic commodities such as rice, sugar, and oil have controlled prices.

Government procurement is made through the Ministry of Finance. If the value of the goods is less than DF 5 million ($28,257), the procurement is made directly from the vendor. Then the treasury verifies the conformity of goods to specification before paying the vendor. However, if the amount exceeds DF 5 million, the Ministry of Finance calls for tenders, especially when international donors finance projects.

Leading Sectors for Exports and Investment
Fishing sector
Djibouti has a coastline of 314 km and the Red Sea is known to be very rich in fish

Telecommunications
Djibouti Telecom, which split from the post office in 1999, is actively trying to stay on top of current technology. Djibouti Telecom provides satellite and submarine cable communications and is known to be one of the best in the region.

Water resources
The constant growth of the population is dangerously exhausting water reserves. Djibouti critically needs new water reserves and is thinking of going to desalination of sea water.

Food & beverage
Food & beverages are imported from France, Gulf countries and Ethiopia both for consumption in Djibouti and for export to neighboring countries.