The nation's Lilliputian aspect belies its regional and geopolitical importance. The capital is the site of a modern deepwater port that serves Indian Ocean and Red Sea traffic and hosts a French naval base. Djibouti city is also the railhead for the only line serving Addis Ababa, the capital of Ethiopia. Djibouti is one of Africa's newest states; it gained independence from France on June 27, 1977. The republic seeks a role as moderator in regional strife and continued development of its commercial activity.

Located at the convergence of the African and Arabian tectonic plates, the territory is geologically active. Slight tremors are frequent, and much of the terrain is littered with basalt from past volcanic activity.

Rainfall is rare, and vegetation is minimal. There are no regularly flowing surface watercourses in the republic. Cool-season (October to April) daily maximum temperatures at Djibouti city average 87° F (31° C); in the hot months 99° F (37° C) is the average daily maximum. Temperatures increase and humidity drops in midsummer as the arid khamsin wind blows off the inland desert.

The country's wildlife includes antelopes, gazelles, hyenas, jackals, and ostriches. Offshore, Djibouti's waters teem with many species of marine life, including tuna, barracuda, and grouper.

Djibouti is virtually a city-state, since about two-thirds of the population lives in or near the capital. Outlying towns are small trading centres that experience periodic population increases as camel caravans and sheep and goat herders encamp.

Based on linguistic criteria, the two largest ethnic groups are the Somali and the Afar. Both groups adhere at least nominally to the Sunnite branch of Islām and speak related, but not mutually intelligible, eastern Cushitic languages.

The Afar (Denakil, or Danakil) speak a language that forms a dialect continuum with Saho. Saho-Afar is usually classified as an Eastern Cushitic language of the Afro-Asiatic language phylum. The Afar live in the sparsely populated areas to the west and north of the Gulf of Tadjoura. This region includes parts of several former as well as extant Afar sultanates. The sultans' roles are now largely ceremonial, and the social divisions within the traditional Afar hierarchy are of diminished importance.

The Somali, who also speak an Eastern Cushitic language, are concentrated in the capital and the southeastern quarter of the country. Their social identity is determined by clan-family membership. More than half of the Somali belong to the Issa, whose numbers exceed those of the Afar; the remaining Somali are predominately members of the Gadaboursi and Issaq clans.

Djibouti city is home to a long-established community of Yemeni Arabs and houses a sizable contingent of French technical advisers and military personnel. In recent decades these groups have been joined by small but significant numbers of ethnic Ethiopians as well as Greek and Italian expatriates.

The republic recognizes two official languages: French and Arabic. However, Somali is the most widely spoken language, although it is rarely written and is not taught in the schools. The use of Afar is mostly restricted to Afar areas. Many Djiboutians are multilingual.

Djibouti is the most urbanized country in sub-Saharan Africa, with some four-fifths of the population classified as urban. The annual rate of population increase is higher than the world average but has dropped significantly since the 1980s. More than half of the population is under the age of 20, and the average life expectancy is less than 50 years.

Both the Afar and the Somali maintain ties with relatives living in neighbouring Eritrea, Ethiopia, and Somalia. Since independence, many newcomers from rural areas and regions beyond the national frontier have migrated to live with family members in Djibouti city. Drought and political conflicts in the Horn also have created large refugee movements into the republic.

Djibouti has few natural resources and extensive unemployment. Efforts to exploit geothermal energy are under way, but without substantial results. salt was commercially exploited for export until the 1950s; today, surface deposits are collected and marketed through the informal sector of the economy. In rural areas, nomadic pastoralism is a way of life. Sheep and goats are raised for milk, meat, and skins, while camels are used for transport caravans. Agriculture is confined to a few wadis, which produce small yields of vegetables (mostly tomatoes) and dates. The fishing industry is still in the early stages of development. More than 90 percent of the country's food requirements is imported, mainly from France, Kenya, and Ethiopia.

Much of the country's economic potential lies in the transport and service sectors. An international airport is located at Ambouli. The port of Djibouti is a free-trade zone with modern container and refrigeration facilities and a rail link to Ethiopia. International telecommunications services are some of the best in sub-Saharan Africa. The capital has attracted several large commercial banks and provides a thriving entertainment industry necessary to a port city. There is also much unrecorded transshipment, via camels, dhows, and trucks, to bordering countries.

Major public works projects have been funded through foreign aid, and the government actively coordinates donors' efforts. In 1988 a paved road linking Tadjoura and the north with the capital was completed. The improvement of housing and the urban infrastructure continues.

Nine constitutional articles were adopted in February 1981. These provide for the election of a president by universal suffrage for a six-year term (renewable once), a 65-member National Assembly elected for a five-year term, and a Council of Ministers headed by the prime minister.

A single-party system, consisting of the Popular Assembly for Progress (Rassemblement Populaire pour le Progrès; RPP), was instituted by constitutional amendment in October 1981. Deputies to the National Assembly must be elected from a list supplied by the RPP; abstention from voting is the only legal form of opposition.

The judicial system recognizes several codes: French-based civil law, Islāmic law, and customary means of arbitration employed by the local populations.

The Djiboutian armed forces are supported by the presence of several thousand French troops, including a unit of the French Foreign Legion (Foreign Legion, French).

Djibouti belongs to the United Nations, the Organization of African Unity, the Arab League, and the nonaligned movement. In 1986 Djibouti city became the headquarters of the Inter-Governmental Authority on Drought and Development (IGADD), which comprises six eastern African nations.

The educational system, although free, is burdened by the needs of Djibouti's young population. For many, formal education ends with early childhood training at local Qurʾān schools. Primary schools are run by the state and by Roman Catholic clergy; advancement to the secondary level in the public system is limited by the size of state facilities. A small vocational training program is offered, but no postsecondary educational institutions exist. Less than one-fifth of the adult population is literate.

Many Djiboutians live in poor housing with inadequate water and sanitation. The infant mortality rate is high due to diarrhea and dehydration. Tuberculosis is a major health problem. Djibouti city has a hospital and several primary care clinics, and local dispensaries serve the rural areas.

Djibouti's only television and radio station, which broadcasts in French, Arabic, Afar, and Somali, is state-run, as is the weekly French-language newspaper, La Nation. The government sponsors several organizations dedicated to the preservation of traditional culture and dance.

In 1984 Djibouti entered the Olympics for the first time; since then its marathon runners have commanded international attention.

Major holidays are Independence Day, June 27, and the festivals of the Muslim calendar.

Djibouti owes its creation as a port (c.. 1888) to Léonce Lagarde, first governor of French Somaliland, as the area was then called. Shortly after it became the capital (1892), work began on the railway that linked Addis Ababa, Eth., to the port in 1917. The harbour is landlocked, covers 160 acres (65 hectares), and has been modernized and dredged to depths of 40–65 feet (12–20 m). Djibouti became a free port in 1949, and the economic life of both the city and the nation depends on the city's use as an entrepôt especially between Ethiopia and the Red Sea trade and as a refueling and supply station. Trade declined during the closure (1967–75) of the Suez Canal. Guerrilla attacks on parts of the Djibouti–Addis Ababa Railway during the Ethiopian civil war in the late 1970s led to further disruption of Djibouti's economy. Drought and war during the 1980s and early '90s sent many refugees (refugee) to Djibouti from Somalia and Ethiopia, swelling its population and creating an additional strain on the city's resources. Major population groups in the city are the Afars (Danakil), Issa Somalis, Arabs, Europeans (mostly French), and Asians. Pop. (2006 est.) 325,000.