The move comes weeks after Eritrea and Ethiopia signed an historic peace deal, establishing relations between the two.

The presidents of Eritrea and Somalia have signed an agreement to restore their countries’ relations after years of animosity.

Yemane Meskel, Eritrea’s information minister, shared a joint statement on Twitter as Somalia’s President Mohamed Abdullahi Mohamed concluded an historic three-day visit to Eritrea. The countries have not had diplomatic ties for nearly 15 years.

“The two countries will establish diplomatic relations and exchange ambassadors,” read a “joint declaration on brotherly relations” signed in the capital, Asmara, by Eritrean President Isaias Afwerki and Mohamed.

After signing the agreement, Somali president called for the lifting of sanctions on Eritrea, imposed over the country’s alleged support for the al-Shabab armed group in Somalia.

“We urge all economic sanctions and embargo imposed on the people of Eritrea must be lifted so that the economic integration of the Horn of Africa region can be realised,” Mohamed said.

President Isaias Afwerki and President Mohamed Abdullahi Mohamed today signed in Asmara the "Eritrea-Somalia Joint Declaration on Brotherly Relations and Comprehensive Cooperation"; https://t.co/Zf3dK5yBSg pic.twitter.com/E2WSZcvsPy — Yemane G. Meskel (@hawelti) July 30, 2018

Matt Bryden, chairman of Sahan, a think-tank covering the Horn of Africa, described Monday’s development as good news.

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“Eritrea and Ethiopia have had poor relations because of Eritrea’s support for groups like al-Shabab and other opposition groups in Somalia,” Bryden told Al Jazeera.

“That support has diminished in recent years, and there really hasn’t been a confrontation between the two governments,” he said.

“It’s a thawing of relationships, but it’s not as direct or as important as the Ethiopian-Eritrean truce.”

That peace deal was signed earlier this month, when Ethiopia and Eritrea declared their “state of war” over, ending a decades-long frozen conflict over border disputes that hurt both countries.

“The region has been destroyed by ethnic and clan cleavage and external pillage and internal thievery,” Isaias said on Monday, referring to the deals.

“But this epoch of crises, conflict and instability is not inherently sustainable,” he added. “As such, it is nearing its end. We are indeed entering a new, transitional, phase.”

However, Bryden said it still remains to be seen what will actually change in the wake of Monday’s agreement.

“Eritrea has been in a state of virtual isolation for two decades and Somalia is rebuilding after two and a half decades of horrific civil war and still faces a widespread insurgency by al-Shabab,” he said.

“Neither country is in a position to help the other.”

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Bryden believes the rapprochement between the two countries could partially be an attempt to attract foreign investors.

“Some of this is public diplomacy to show the region, one another and international partners, that the Horn of Africa is more stable, that its leaders are less polarised and becoming more pragmatic and open,” he said.

Bryden also raised the issue of the political relationship Eritrea, Ethiopia and Somalia have with Gulf countries.

“Eritrea and Ethiopia both have fairly close ties with the United Arab Emirates and Eritrea hosts a UAE military base which is actively involved in the conflict in Yemen.”

Somalia, on the other hand, has a very poor relationship with the UAE, according to Bryden.

“Mogadishu is more closely aligned with Qatar, so it’s not clear how Somalia is going to walk this tightrope between these two camps and where it’s going to take Somalia next.”

Ethiopia, which is undergoing lightning reforms under new Prime Minister Abiy Ahmed, has also requested that sanctions be lifted against Eritrea.

After Ethiopia’s peace agreement with Eritrea, its other neighbour and rival Djibouti asked the UN Security Council for help mediating a long-standing border dispute that has soured relations with Asmara.