It was the Sultans of Obock and Tadjourah who agreed to let the French settle in the area, and it was in 1888 that construction of the country began.

A treaty was signed with the emperor of Ethiopia towards the end of the 19th century which made Djibouti an 'official outlet of Ethiopian commerce'; as a result of this the construction of the Addis Ababa to Djibouti railway took place. Ever since this railway has been of great importance to Ethiopia.

The borders of the country were constructed without any thought given to ethnic links, language, trading patterns or even traditional grazing rights with all of these issues continually dominating politics.

In 1949 anti colonial demonstrations were held by the Somalis and Issas who were in favour of the attempt by the British to reunite territories of Italian, British and French Somalia.

By 1958 hostility towards the French was growing. As a consequence the colonial authorities switched their allegiance to the Afars; this was an attempt to keep the territory as a French possession. Due to this policy change the French employed Ali Aref and friends to control the local government council, which achieved little and riots occurred in 1966. The riots took place during the visit of General de Gaulle and riots also occurred in 1967 after a referendum was produced saying that the majority had voted to continue French rule. The manipulated results were achieved due to the arrest of opposition leaders and due to the great expulsion of Somalis.

Those expelled joined the Somali Coast Liberation Front which increased its terrorist movements during the early 1970's.

The position of Ali Aref became more vulnerable due to huge demonstrations in support of his opposition by the African People's League for Independence.

In 1976 Aref was forced to resign due to pressure from the Arab League and the OAU; as a consequence the French again switched allegiance, they tried to keep control by setting up a government which would be on good terms with them and by reluctantly conceding that granting independence was the only option left open.

Although independence has been granted tribal harmony has not resulted.

Hassen Gouled seized on the initial Somali successes in the Ogaden war. He saw this as an opportunity to remove Afars from many key posts in both administration and the security force, Ethiopia struck back with Russian and Cuban support and he was forced to reinstate many of the Afars.