African leaders Saturday marked the African Union's 50th birthday against a backdrop of economic growth, despite persistent armed conflicts and the new shadow of the threat of terrorism.

AU Chairman and Ethiopian Prime Minister Hailemariam Desalegn was optimistic as he launched extravagant celebrations urging leaders to "create a continent free from poverty and conflict, and an Africa whose citizens enjoy a middle income status."

But Saturday's party in the Ethiopian capital Addis Ababa will be followed by a more sobering two-day summit to tackle a series of crises across the continent.

Today's 54-member AU is the successor of the Organisation of African Unity (OAU), established in 1963 in the heady days when independence from colonial rule was sweeping the continent.

African leaders were joined by UN Secretary General Ban Ki-moon, French President Francois Hollande, US Secretary of State John Kerry, Chinese Vice Premier Wang Yang and Brazilian President Dilma Rousseff.

The presence of such a high-level Chinese official illustrated Beijing's growing footprint on the continent, while Rousseff's attendance marked the increasing sway wielded by developing economies.

Africa remains the world's poorest continent and its most war-prone but development indicators -- including health, education, infant mortality, economic growth and democracy -- have improved steadily in the past 50 years.

Africa is also home to some of the fastest-growing economies in the world, according to the International Monetary Fund, and has attracted huge amounts of foreign investment in recent years.

Brazil announced Saturday it was cancelling $900 million (700 million euros) worth of debt in 12 African countries -- with Congo-Brazzaville the highest with $352 million written off -- as part of a broader strategy to boost ties.

Hailemariam singled out Beijing for its massive wave of investment on the continent, expressing his "deepest appreciation to China for investing billions... to assist our infrastructure endeavours."

Despite the celebrations, 24 out of the 25 nations at the bottom of the UN's human development index are in Africa, with several blighted by unrest.

Hollande warned of "the scourge of terrorism" faced by the continent, as he invited leaders to a December summit in Paris to boost "peace and security".

Leaders, who said the celebrations would promote pan-Africanism and help unify the often divided continent, nodded to the classic reggae hit "you're an African" by late Jamaican singer Peter Tosh as it boomed across the hall.

"When we therefore talk about African solutions to African problems, it is because we know that we can only permanently silence the guns if we act in solidarity and unity," said Nkosazana Dlamini-Zuma, head of the AU Commission, the organisation's executive arm.

But speaking in the modern Chinese-built AU headquarters, she also noted that "the self-reliance and economic independence that our founders spoke of remains a bit elusive and social inequalities remain."

Drummers, dancers and musicians later performed to a packed crowd including leaders in a giant hall, telling the history of Africa through song and dance.

But the elaborate celebrations had the programme running up to six hours late, meaning Kerry, who was to have made his maiden speech to Africa as the new top US diplomat, only gave shortened remarks at a later private AU dinner.

"The legacy of the progress in the African Union over the last half century really excites us about the possibilities over the next 50 years," he said.

"Today war and strife in Africa are less common than freedom and development. Today the rule of strong men is less common than multi-party democracies."

In recent years, the AU's role in combat -- such as its mission in Somalia to battle Al-Qaeda linked Islamists -- has shown it can take concrete action, even if the funding for that mission comes mainly from Western backers.

But at the same time, the splits revealed by the 2011 conflict in Libya -- when AU members squabbled between those wanting to recognise rebels and those backing Moamer Kadhafi -- showed its disunity and lack of global clout.

The agenda will also likely include the crisis in Mali, as well as the conflict in Somalia and the rebels in the eastern Democratic Republic of Congo.