Djibouti Market Entry

Djibouti Market Entry
Basic data
Capital Djibouti
Population 1.01 million
Language French, Arabic
Religion Islam, Christianity
State system semi-presidential republic
Head of State Ismail Omar Guelleh
Head of government Abdoulkader Kamil Mohamed
Currency name Djibouti Franc (DJF)
Travel
Time shift +2 hours (in summer +1 hour)
Economy 2021
Nominal GDP (billion USD) 6,7
Economic growth (%) 4.1
Inflation (%) 1.6
Unemployment (%) ON

Political power in Djibouti is highly centralized and is held by President Ismael Omar Guelleh, who won the presidential election in April 2021 with 97.5% of the vote to secure a 5th term. His family has been in power since the country’s independence in 1977. The presidential term is five years and the head of state is elected in a direct election that is two-round if none of the candidates wins more than 50% of the vote in the first round. The limit on the number of presidential mandates was abolished in April 2010. There are 65 legislators in the Parliament who are elected for 5 years (the next elections should take place in February 2023). Currently, the presidential coalition Union pour la majorité présidentielle (UMP) holds 57 votes, this election result was caused not only by the boycott of the elections by the largest opposition party, but also by the overall fragmentation of the opposition.

According to cheeroutdoor.com, Djibouti’s economy is highly dependent on the service sector (logistics) and re-exports (mainly to Ethiopia). Although it has been affected by the global pandemic, it is expected to recover quickly in connection with the resumption of international trade. GDP growth in the coming years will be significantly higher compared to the region, even if it is negatively affected by the political-security crisis in Ethiopia. In the coming period, Djibouti will focus on strengthening its own infrastructure using loans from abroad and foreign direct investment. In this way, it will continue to strengthen its geostrategic position in the region and consolidate its role as a logistics and trade hub.

Due to the re-export of live animals (imports from Somalia and Ethiopia), investment units for meat processing (slaughterhouse) are a perspective field. There are also opportunities in building an infrastructure network, especially power distribution networks from the upcoming geothermal sources. Among the goods, food and non-alcoholic beverages (interest in non-alcoholic beer), means of transport, tires, equipment for the chemical and mining industry, and small aircraft are promising. The financial sector continues to develop, the healthcare sector is waiting for its first investment – most foreign workers still travel outside the country for medical treatment.

Djibouti is significantly influenced by French, Arab and African culture, the intermingling and clashing of these influences must be taken into account. Due to its prominent position in the region and its importance for international trade, the Djiboutians are used to the hospitality of foreign partners. They are aware of the importance for other countries due to their strategic location, and they know how to use this fact in business and other negotiations.

This Summary Territorial Information is processed for a country that is so-called accredited. The information is provided in an abbreviated form.

Basic conditions for the use of Czech goods on the market

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

Standard sales methods are used. It is recommended to work with a reliable and quality local representative.

Honorary Consul of the Czech Republic in Djibouti, Mr. Naguib Sadik Abdallah, is an experienced businessman and importer. Upon request, he will provide information and provide contacts: ETS Naguib, e-mail: [email protected]

The importer must obtain an import license, for which a fixed amount is paid plus a percentage of the turnover – different according to the type of activity (industrial companies the least, traders the most). Imports are fully liberalized. The domestic market is protected only by the application of customs duties according to the customs tariff.

Forms and conditions of operation on the market

Due to the mixing of African, Arab and European (French) business culture and customs, it seems ideal to establish a joint venture with a local partner or to find a reliable distributor.

Marketing and communication

Knowledge of French and ideally Arabic is required.

Prospectuses and information materials should be in French, with English only as a supplement. Radio and television Radiodiffusion-Télévision de Djibouti (RTD), as well as the news agency Agence Djiboutienne d’Information (ADI) and the only (weekly) periodical La Nation, are controlled by the government. Television broadcasts in French and Arabic 4-6 hours a day. Most advertising is under European (French) influence.

Issues of intellectual property protection

All patents, trademarks and intellectual property are officially protected. Djibouti is a signatory to WIPO conventions and a member of the Paris Convention for the Protection of Industrial Rights.

Public procurement market

Information on published tenders can be obtained on paid internet portals:

Tenders Info

DQ Market

It is true that French or Arab companies have a better chance for state supplies. Czech companies with contacts in France or Arab countries can participate as subcontractors.

Payment terms, payment ethics and resolution of commercial disputes

The Djiboutian system is based on French law and consists of three levels: the Court of First Instance, presided over by a single judge, the Court of Appeal, presided over by a panel of three judges, and the Supreme Court. According to international lawyers who work in the country, maritime and commercial law is effectively applied, but in the past there have been cases of influencing or delaying the courts. In general, it is always desirable to transfer possible disputes to international soil.

The risks can be considered the difficult availability of the necessary information, ignorance of the environment (customs, taxes), the difficulty of establishing contact with distributors, the weak purchasing power of the population, the use of French and Arabic.

The recommended terms of payment are the same as in the case of other African countries – irrevocable confirmed letter of credit (L/C) or, optimally, payment in advance.

Visas, fees, specific conditions for traveling to the territory

A Djibouti visa can be applied for electronically at https://www.evisa.gouv.dj/#/. After logging in, click on “I wish to make new request” and then on “Short Stay Visa”. In the case of a business trip, it is advisable to enter a scan of the support letter of the represented institution into the system. After processing the application, a confirmation and a link to the electronic visa are sent to the email, which must be printed before the trip. Visas are also issued by embassies and consulates of Djibouti or France. When applying for a visa, it is necessary to submit two photographs, an invitation from a company or a private person (for tourism, a hotel reservation confirmation), a return ticket, travel insurance and proof of solvency. A visa is usually issued for 30 days, but it often depends on the approach of a particular consular officer. Vaccination against yellow fever is required, travel insurance covering health risks is essential.

The center of Djibouti capital is safe. To move around the city, it is possible to use taxis, which are ubiquitous; the price must be agreed in advance. Accommodation is possible, for example, in the Palace Kempinski or Sheraton hotels. For transportation from the airport to the hotel, we recommend using the shuttle services offered by the hotel.

Alcohol can be bought in restaurants, but drinking alcohol in public is prohibited, and drunkenness carries a penalty of up to two years in prison. The import and possession of pornography and displays of homosexuality are prohibited.

With an average temperature of 30°C, Djibouti is the hottest city in Africa; especially from May to October, the temperatures are at the limit of tolerability.

Employment of citizens from the Czech Republic

A foreigner can get a job if he has a work permit applied for by the future employer and issued by the Ministry of Labor for two years with the possibility of extension. The application must be accompanied by a letter of acceptance, a letter of recommendation, two copies of the CV, three photographs and four copies of the employment contract. The Ministry has 30 days from the registration of the application to comment. If he does not express himself within the specified period, the work permit is granted.

Fairs and events

There are currently no international fairs or other events taking place in Djibouti.

Djibouti Market Entry