The leaders of Kenya and Ethiopia promised on Monday to create jobs, reduce poverty and foster trade in their restive borderlands, where conflict has intensified in recent years.
The $200 million project aims to create a trade and investment hub along the remote 860-km (530-mile) border where human, arms and drug trafficking are rife, the head of the United Nations in Kenya, Nardos Bekele-Thomas, said.
"The problem here is poverty," she told the Thomson Reuters Foundation. "It's just hopelessness that creates insecurity."
Clashes between herding communities over grazing land, water and cattle have become increasingly deadly due to an influx of guns, as well as political power struggles and fast-growing populations.
Kenya's army was sent to restore order to the border town of Moyale, 800km (500 miles) north of the capital Nairobi, in 2013 after dozens were killed and villages were burned to the ground in a jostle for power between rival clan militias.
Around two-thirds of the population of Kenya's Marsabit County - more than 70,000 people - fled, mostly to Ethiopia's Borana Zone where many have relatives, the U.N. said.
"We can exchange conflict and insecurity for peace and prosperity," Kenya's President Uhuru Kenyatta told dignitaries seated in a white tent decorated with the two countries' national colors.
"We shall work together to ensure that Moyale becomes the Dubai of the Horn of Africa," he added, referring to the Middle Eastern trade hub.
A tarmac road linking Nairobi and the Ethiopian capital Addis Ababa is due to be completed by September 2016, he said.
Restoring peace will be a challenge. The arid region is awash with guns due to its proximity to unstable Somalia where al-Qaida-linked militants have been fighting to topple the government.
Ethiopian soldiers also make sporadic incursions into Kenya in pursuit of Oromo Liberation Front rebels.
Many homesteads have guns to deter invaders, while herders often carry firearms to protect their animals because there is little police presence.
With the support of Western donors and the World Bank, the governments plan to diversify the livestock-dominated local economies and improve access to water, education and healthcare.
Eight in 10 residents of Marsabit County live below the poverty line, government data shows.
Security officials held back large crowds who lined the road to watch the lengthy convoy of officials speed through the town.
Among them, 18-year-old Abdi Aden Adow said governments should boost cross-border trade as frequent droughts have pushed his family, who keep goats and camels, into poverty.
"There is no rain," he said. "Life is very hard."