MOGADISHU (Reuters) - Somalia's president will visit Ethiopia on Saturday, his office said, the strongest sign yet of improving relations between the two neighbours after a year of tensions over Addis Ababa's plans to build a naval base in a breakaway Somali region.

Somalia and Ethiopia are set to restore full diplomatic relations after a visit by Somalia's President Hassan Sheikh Mohamud to Addis Ababa, as efforts intensify to heal a year-long rift that threatened further instability in the Horn of Africa.

Somali President Hassan Sheikh Mohamud arrived in Ethiopia’s capital on Saturday, exactly a month to the day since the two countries’ leaders reached an agreement aimed at ending a bitter, yearlong dispute. Ethiopian Prime Minister Abiy Ahmed said he received Mohamud at the Addis Ababa airport.

The two countries are looking to build on a recent peace deal that aims to defuse mounting tension in the Horn of Africa.

A year-long rift between the neighboring countries threatened further instability in the Horn of Africa.

The rift began when Ethiopia signed a controversial agreement with Somaliland, Somalia’s breakaway region, reportedly offering to recognise its independence in exchange for a Red Sea port and a milita