Cross Border Trade - Djibouti
Main products sold at borders
o The main products traded at the borders are: agricultural products, livestock, health and beauty products, medicines, footwear and textiles, cereals, food products
o Processed and semi-processed (such as pasta, sugar, wheat flour and tea), kerosene, charcoal and khat.
Taxes imposed on large official cross-border traders are;
o Customs duty
o Value Added Tax (VAT)
o Surtax and income tax
Benefits of small-scale cross-border trade for Djiboutian women
at. This trade serves as a means of subsistence for their families.
b. This activity improves food security and reduces poverty
vs. Basic goods frequently used by local people living near the border do not reach the area in sufficient quantity. Even if the goods reached these places, their prices would be so high due to transportation costs becoming unaffordable for the poor,
d. Limit illegal/informal trade (aka smuggling) across the border by allowing people to freely import commodities.
Challenges Facing Djiboutian Cross-Border Traders
o The high cost of transport
o Lack of marketing information
o Lack of access to credit
o Lack of marketing infrastructure
o Inefficient marketing system,
o High business risk
Trade across the borders of Djibouti
Cross-border trade plays a vital role in improving the livelihoods of Djiboutian women living around border areas.
The Republic of Djibouti has cross-border trade agreements with neighboring countries and in particular the Federal Republic of Ethiopia with which Djibouti shares long-standing economic, commercial and cultural relations. These trade agreements play a vital role in maintaining healthy and strong bilateral relationships that promote the achievement of legal trade flows between nations in accordance with international trade law. In this regard, Djibouti has taken important steps to strengthen bilateral relations in the areas of cross-border trade.
Cross-border trade in Djibouti involves both:
1. Large-scale cross-border trade: carried out by companies with large financial capacity and which consists of trade in goods or services carried out by legally registered traders who meet all the requirements of the trading countries concerned,
2. Petty Cross-Border Trade: These are low-income people who live near the border of the country and engage in commercial activities such as exporting and importing a limited number of commodities.
The Republic of Djibouti trades with neighboring countries like Ethiopia, Somalia and (Somaliland). In addition, in Djibouti, women actively participate in this cross-border trade. The participation of women in this trade improves food security and reduces poverty among the vulnerable population.