Djibouti is the capital of Djibouti. It is located in the coastal Djibouti Region on the Gulf of Tadjoura. Djibouti has a population of around 780,000 i…Djibouti is the capital of Djibouti. It is located in the coastal Djibouti Region on the Gulf of Tadjoura. Djibouti has a population of around 780,000 inhabitants, which counts for 73% of the country's population. The settlement was founded in 1888 by the French, on land leased from the ruling Somali and Afar Sultans. During the ensuing period, it served as the capital of French Somaliland and its successor the French Territory of the Afars and Issas.