The veteran leader, Africa's oldest president aged 90, shook hands with Abel Aziz in front of fellow leaders to applause at the AU summit in the Ethiopian capital.
The new chairman of the African Union, Zimbabwe President Robert Mugabe, is the continent's oldest leader — and one of its most controversial post-colonial figures.
He initially won favour in Western capitals when he preached racial and national reconciliation after taking power in 1980 in the wake of a brutal guerrilla war against white-minority rule.
To most of Africa, he was an anti-colonial hero.
But Mugabe's lustre quickly faded.
From crushing political dissent to ushering in disastrous land reforms that saw the economy crumble, many accuse Mugabe of turning the regional breadbasket into a basket case.
Despite this, Mugabe — who turns 91 next month — remains admired in much of Africa and was already serving as the chairman of the regional Southern African Development Community.
Aditi Lalbahadur, analyst at South African Institute of International Affairs, described Mugabe's appointment as AU chairman as "an endorsement by the leaders of Africa".
As for the role he might play in his new post, Harare-based independent political analyst Earnest Mudzengi said Mugabe would fare no differently from his predecessors.
"Problems affecting the continent are complex and Mugabe will only be exposed to them and no changes are expected," Mudzengi said.
"It's not a very encouraging sign," sighed one African diplomat, who asked not to be identified. "The Mugabe style belongs to a past generation, the one that takes power hostage, and this is no longer the AU creed."
Born on February 21, 1924, at Kutama Mission northwest of the capital Harare, Mugabe was raised in a Catholic family and was described as a loner and a studious child.
After his father walked out on Mugabe's mother and siblings when he was 10, the young Robert Mugabe concentrated ever harder on his studies, and qualified as a schoolteacher at the age of 17.
An intellectual who initially embraced Marxism, he enrolled at Fort Hare University in South Africa, meeting many of southern Africa's future black nationalist leaders.
As a member of various nationalist parties that were banned by the white-minority government, Mugabe was detained in 1964 and spent the next 10 years in prison camps or jail.
He used his incarceration to gain three degrees through correspondence courses, but the years in prison left their mark.
Released from jail in 1974 he became leader of the Zimbabwe African National Union (ZANU) and left for neighbouring Mozambique to wage a guerrilla war against Ian Smith's white-minority Rhodesian government.
Economic sanctions and war forced Smith to negotiate, after which ZANU came to power in 1980 elections.
The bespectacled intellectual — sporting a moustache oddly reminiscent of Hitler — extended education, healthcare and opportunity to formerly disenfranchised blacks.
Britain, the former colonial power, made him an honorary knight as he swapped his Maoist outfits for Saville Row suits, showing a love for cricket and shopping at Harrods in London.
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