Practical Guide

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 Tic
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.

angle-left Bilateral joint commission on cross-border trade

Bilateral joint commission on cross-border trade

There is a bilateral mixed commission which facilitates trade. The mixed commission that is more regular is the Djibouti-Ethiopian mixed commission. A new general trade agreement and a Protocol on Cross-Border Trade are in force between the two countries.

at. Joint Committee on Cross-Border Trade

To facilitate the implementation of this protocol on cross-border trade, a joint committee has been set up with the aim of:

  • Facilitate cross-border trade between the two countries
  • Delimit together so-called cross-border trade zones
  • Harmonize laws and rules on cross-border trade
  • Jointly fight against the practice of mixing trade and illicit trade

b. The border areas of Djibouti

  • The locality of Galafi region of Dikhil common border with Ethiopia
  • The locality of Bondera region of Dikhil common border with Ethiopia
  • The locality of Galileh region of Ali sabieh common border with Ethiopia
  • The locality of Balho region of Tadjoura common border with Ethiopia
  • The locality of Loyada region of Arta common border with Somalia (Somaliland)
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