Djibouti is capital city and major port of Djibouti. Djibouti is located on the southern shore of the Gulf of Tadjoura in the Gulf of Aden. Djibouti was founded by the French in 1888 and made the capital of French Somaliland in 1892. Djibouti was made a free port in 1949 and linked by rail to Addis Ababa in 1917. The economic life of both the city and the nation depends on the city's function as a transshipment point, especially between Ethiopia andthe Red Sea trade.