Addis Ababa (AFP) - US President Barack Obama heads to Ethiopia Sunday, the first American president to visit Africa's second most populous nation and a key but much maligned ally in the fight against terrorism.

Obama, who arrived in neighbouring Kenya on Friday, is expected to leave for Ethiopia's capital Addis Ababa late Sunday for a two-day visit, where he will also be the first US leader address the African Union, the 54-member continental bloc.

"This is the first time a sitting (US) president is visiting Ethiopia," Ethiopian foreign ministry spokesman Tewolde Mulugeta said. "This will bring the relationship between our two countries to a new high."

Through the tinted windows of his bomb-proof presidential limousine, nicknamed "The Beast", Obama will be able to see Addis Ababa's construction boom of tower blocks, as well as sub-Saharan Africa's first modern tramway.

Ethiopia has come far from the global headlines during the 1984 famine, experiencing near-double-digit economic growth and huge infrastructure investment -- making the country one of Africa's top-performing economies and a magnet for foreign investment.

The Horn of Africa nation also remains a favourite of international donors -- despite concerns over human rights -- as a bastion of stability in an otherwise troubled region.

Obama is slated to address leaders at the AU's gleaming Chinese-built headquarters as he wraps up his Africa trip on Tuesday, with remarks that may touch on Africa's democratic deficit.

AU Commission chief Nkosazana Dlamini-Zuma said it would be an "historic visit" and be a "concrete step to broaden and deepen the relationship between the AU and the US."

Obama is also expected to meet top mediators pushing peace efforts in neighbouring South Sudan, the world's youngest nation, which is gripped by a 19-month civil war marked by horrific atrocities.

While Kenya launched one of the biggest security operations ever seen in the capital Nairobi to host Obama, Ethiopia's powerful security forces meant there was little obvious extra fanfare ahead of his arrival.

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- 'Repressive policies' -

Ethiopia, like Kenya, has been on the frontline of the fight against the Somali-led and Al-Qaeda affiliated Shebab -- both nations have troops in Somalia as part of an AU and US-backed force, and are key security partners to Washington.

But the visit also comes two months after elections that saw the ruling coalition of Prime Minister Hailemariam Desalegn take every one of the 546 seats in parliament.

The opposition, which lost its only seat, alleged the government had used authoritarian tactics to guarantee victory.

The US State Department notes Ethiopia's "restrictions on freedom of expression," as well as "politically motivated trials" and the "harassment and intimidation of opposition members and journalists."

Ahead of the visit, the White House stressed it frequently addresses issues of democracy and political rights with countries in the region.

Rights groups have warned Obama's visit could add credibility to a government they accuse of suppressing democratic rights, including the jailing of journalists and critics, with anti-terrorism legislation said to be used to stifle peaceful dissent.

In an appeal to Obama ahead of his visit, Reporters Without Borders (RSF) said they were "extremely concerned about the fate of those who remain behind bars", arguing that "Ethiopia's fight against terrorism should not come at the price of freedom of information and of the press."

Amnesty International said Obama should raise with Ethiopia the "profoundly repressive policies" of the government.

"We don't want this visit to be used to sanitise an administration who has been known to violate human rights," said Amnesty's Abdullahi Halakhe, adding he feared Ethiopia would "spin" the visit to its benefit.

"The majority of ongoing conflicts on the continent are linked to issues of political governance," said Desire Assogbavi, representative of the aid agency Oxfam to the AU.

Obama has travelled to Africa more than any other sitting US president, and talked about the "deep" ties between Africa and the United States before setting off on the trip.

But Assogbavi said that the visit, coming as Obama winds down his time in power, weakens the potential impact he could have.

"Obama is a son of the continent," Assogbavi said. "We had hoped that this visit might have occurred within the first years of his term, rather than the last minute, to allow time to implement the decisions," he added.