Ethiopia and Kenya have signed a $700m agreement to build a 800km Nairobi-Moyale-Addis Ababa road, which will link the two countries.

The project is part of trans-African highway corridor and will be funded by the African Development Bank (AfDB) and will be carried out in three phases.

The Ethiopian Road Authority said the project will allow the country to import goods from Mombassa and Port Sudan at a cheaper rate compared to Djibouti.

The project will lower transport cost in Ethiopia and Kenya, as well as shortening transit times for imported and exported goods.

The project is expected to take three years to complete.