Egypt and Sudan plan to double their trade and investment, stepping up cooperation in sectors ranging from manufacturing to tourism, President Mohamed Morsi said on Friday as he ended his first visit to Khartoum.
"We agree to benefit from all the resources we have to reach full integration, through joint agricultural projects for food security, and to double the amount of trade and investment," Morsi told reporters at a press conference with his fellow Islamist, Sudanese President Omar al-Bashir.
Morsi arrived on Thursday evening in Sudan, which Egypt jointly ruled with Britain until 1956, and left after about 24 hours.
Bashir's office called the visit "historic" but observers questioned why Morsi had not come sooner.
Morsi, a former Muslim Brotherhood leader, was elected in June after a popular uprising toppled long-time strongman Hosni Mubarak in 2011 in of the region's Arab Spring revolts.
Mubarak's regime had strained relations with Sudan for years.
The deposed leader blamed Sudan for a 1995 assassination attempt against him in Ethiopia, when the veteran Islamist Hassan al-Turabi was a key figure in the Khartoum government.
To boost investment, Morsi said the two countries plan to build in Khartoum North a two-million square metre (2.4 million square yard) manufacturing park to produce ethanol and pharmaceuticals.
"We agreed on protocols to develop tourism, and the Red Sea area," Morsi added.
The neighbours have a decades-old dispute over sovereignty of the Halaib Triangle along the Red Sea but Morsi hinted at a resolution.
"There is no problem of borders between the two countries and in the future it will be solved," he said.
Sudan and Egypt have delayed opening land crossings but the two leaders now say road links will operate imminently.
Bashir said they have also decided on a railway connection.
Each country has had economic or security reasons to hold up opening the land crossings, University of Khartoum political scientist Safwat Fanous said.
Egypt was the third-largest investor in Sudan, with stakes valued at $5.4 billion, Cairo's then-prime minister Essam Sharaf said two years ago.
Both nations now face severe economic challenges.
Sudan has been an important ally for Egypt in terms of its agricultural potential and in Cairo's efforts to secure an acceptable agreement with upstream Nile countries on water supplies.
The Nile is virtually the only source of water for Egypt.
"Egypt desperately needs Sudan," a foreign diplomat said.
Two years ago Ethiopia announced the construction of the Renaissance Dam, which aims to be the largest hydroelectric plant in Africa.
Bashir said a technical team is assessing the dam's potential impact on his country and Egypt, which will cooperate "to build harmony" with the Nile valley states so that all are in agreement on proposed projects.
Ties between the Islamist regimes in Cairo and Khartoum pose no threat, Morsi said earlier Friday.
"We in Egypt and Sudan are integrated, and you will find enemies for this integration," Morsi told thousands of people, including Bashir, at Al-Noor mosque in Khartoum North.
Banners outside proclaimed, "Sudan and Egypt are brothers", and shouts of welcome greeted the visiting leader.
It was not clear to which "enemies" he was referring.
Relations between Abu Dhabi and Cairo have been strained since Morsi's election.
Both Egypt and Sudan also face internal turmoil.
Turabi was among a group of political figures who met Morsi on Friday at a luxury hotel.
He later told AFP the "revolutionary" Egyptian regime should foster tighter ties between its people and those of Sudan, which he said is run by a "dictatorship."
Turabi was a key figure behind the coup that brought Bashir's regime to power but later broke with him and now says the government should not be considered as Islamic.