The following is abridged from a speech delivered at “Evenings at FEE” in April 2005.

Free at last! This euphoric cry rang across Africa in the 1960s as one country after another gained independence from Western colonial rule. New national flags were unfurled to the strains of new national anthems. Leaders who fought gallantly and won independence were hailed as heroes. The dream of self-rule, political freedom and economic progress was finally to become a reality. Africa was now free to develop in its own image: but into what? The challenge was daunting.

This dream never came true. The astounding natural wealth of the continent (gold, diamonds, palladium, titanium-name the mineral and you will find it in Africa!) was never used to lift the people out of poverty. By any standard, the vast majority of African people are worse off today than they were 40 years ago. The only thing that has changed is the skin color of the oppressor: from white to black.

Africans feel betrayed, yet it’s not something we can talk about here in America because it is not politically correct.

What went wrong? First, democracy and pluralism were denounced as both "Western invention" and "imperialist dogma." In all but four countries, a one-party state rule was imposed, concentrating power in the hands of one individual. You don’t have to be a rocket scientist to know that any political system with such concentration of power will degenerate into tyranny. The Soviet Union gave us a perfect example of it.

Second, new African leaders rejected capitalism. They harbored a deep distrust and distaste for capitalism, falsely perceiving it as an extension of colonialism and imperialism. To them, freedom from colonial rule meant freedom from capitalism, free enterprise and foreign investment, which was viewed as "foreign exploitation." To them, Soviet-style socialism with the state determining the economic destiny of the people seemed the most adequate and fair way to protect their hard-won sovereignty and to move Africa toward economic prosperity.

Socialism in Africa

Such a socialist transformation required the institution of excessive legislative regulations and controls. All unoccupied land was appropriated by the government. Many foreign companies were nationalized, and numerous state-owned enterprises were established. Roadblocks and passbook systems were employed to control the movement of Africans. Marketing boards and export regulations were tightened to fleece the cash crop producers. Price controls were imposed on farmers and merchants to make food cheap for the urban elites. Bewildering arrays of restrictions were imposed on imports, capital transfers, industry, wages, trade unions, prices, rents, interest rates and the like. Economic progress suffered, as it always does whenever the state intervenes. Poor planning and coordination resulted in dislocation of industries, low morale, lack of discipline and accountability, nepotism, disincentive to produce and chronic shortages of goods and services. Black markets naturally emerged; bribery and corruption thrived, lining the pockets of the elites and making them even more powerful.

West and East, governments poured money into new African economies with the same predictable results.

In Kenya, the Norwegian government provided $25 million to set up a fish-freezing project for certain tribesmen. After the factory was built, a small problem was discovered: the tribesmen don’t fish—they raise goats!

In Senegal, the United States provided aid to build 50 crop-storage depots. They were built in locations the peasants never visited.

In Sudan, the Soviets built a milk bottling plant at Babanusa. But the Babanusa tribesmen drink their milk straight from the cow, and there aren’t any facilities to ship milk out of the area. The 20-year-old plant hasn’t produced a single bottle of milk.

In Uganda, Yugoslavia built a state-owned factory that canned mangoes. The factory had a canning capacity that exceeded the entire world’s trade in canned mangoes.

In Somalia, the Italians built a banana-boxing plant. When the state-owned plant was completed it was discovered that the quantity of bananas needed for the facility to break even exceeded the country’s entire production of bananas.

Who Is Rich in Africa?

If you want to understand why Africa is so poor and America is so rich, ask yourself the following question: How do the rich in both places make and secure their wealth?

Here in America, the richest person is Bill Gates. How did he make his money? He earned it in the private sector by producing computer software. Who are the richest in Africa? Heads of states. What did they create or produce to make their fortunes? The answer is simple: nothing! They became rich by using power and privilege to rob their suffering people. African leaders betrayed us. Back in the 1960s they promised: “Only socialism will save Africa!” But in reality their “Swiss-bank socialism” destroyed Africa, allowing them to rape and plunder state treasuries for private accounts in Swiss and other foreign banks. According to a Zimbabwean official, “In Zimbabwe, socialism means what’s mine is mine, but what’s yours we share!”

In Nigeria between 1970 and 2000 more than $35 billion in oil revenue disappeared into the Nigerian government’s coffers. Nobody knows what happened to the money.

Africa’s most notorious kleptocrat, Mobutu Sese Seko of Zaire, accumulated a fortune of $10 billion. He could have written a personal check to pay off his country’s entire foreign debt of $7 billion! Olusegun Obasanjo, the president of Nigeria, claims that African leaders have stolen $142 billion from their people since independence. That makes me very angry. If these leaders, who are always begging the West to help Africa— and begging belittles the dignity of the fine African people-would only return half the loot they have hoarded, it would put Africa in much better financial shape.

The Spirit of Africa

Socialism is always wrong. It is as alien to Africa as it is to the rest of the world. Traditional Africa was never socialist. It had private ownership of the means of production (land, labor and capital), free enterprise, free village markets, free trade and an entrepreneurial spirit. There is a great deal of confusion about communal land ownership in traditional Africa. But historically land in Africa was never communally owned, as the myth goes. It was privately owned by the family or clan, not a tribal government. In the West, the basic economic and social unit is the individual. In Africa, the basic economic and social unit is the extended family. For example, if you ask: “Whom does this land belong to?” the African will tell you: “It belongs to all of us,” meaning his extended family, which is a private entity. Africans also believe in a sacred bond between the living and the dead. Thus the land where their ancestors are buried cannot be sold. Traditionally Africans have gone about their activities of their own free will. The farmers produce what they need and sell the surpluses on open village markets. Such markets existed in Africa for centuries, long before the Europeans arrived. But to justify their choice of socialism, new African leaders insisted that these markets were colonial institutions. After independence, the leaders could have restored such indigenous markets and built upon them. They chose to destroy them—in some cases actually blowing them up. Free enterprise and free trade flourished in pre-colonial Africa, with commercial routes crisscrossing the whole continent. Africans didn’t need their chief’s permission to engage in trade or business. Chiefs didn’t determine prices; the market did.

People had their own ways of raising capital. In West Africa, for example, market activity was dominated by women. They understood how to raise capital using “revolving credit.” Ten women would get together and contribute $10 each a month into a pot. At the end of the month there was $100 in the pot. The women would then take turns using this money as capital—for instance, to buy a sewing machine.

All of this proves that nobody can defend socialism on the basis of African tradition. African governments alone imposed the alien ideology of socialism on their countries, consolidating an enormous economic and political power in the hands of the state. Over the years this evolved into what I call a vampire state, or a gangster state. Throughout the continent there are de facto apartheid regimes, where those in power use government to advance their interests and exclude everybody else, thus leading Africa into disaster. In the 1980s, with the economy in deep crisis, African leaders acknowledged some of their grave mistakes. Many signed agreements with the World Bank, promising to reform their abominable political and economic systems. Between 1981 and 1991 the World Bank spent $25 billion in an attempt to reform 29 African countries. The grim reality was a failure rate of more than 80 percent. Only six out of the 29 succeeded.

This is yet more proof that the African leaders are simply not interested in reform. They are not about to relinquish the economic control that has allowed them to build their personal empires and punish their rivals. All they are willing to do under international pressure is what I call the “Babangida Boogie”: one step forward, three steps back, a flip and a side kick to land in a fat Swiss bank account.

The same is true on the political front. In 1990 only four African countries were democratic. Even though the leaders came under demands to reform their political systems, today only 16 African countries are democratic. Political democratization has stalled. It is important to distinguish between “modern” and “traditional” Africa. It is the traditional systems that must be restored for Africa to rejuvenate. Africa’s crisis is of modern socialist making and stems from the misrule, mismanagement and corruption of the elite. The problem that we face today is the legacy of this betrayal, because the people you rob eventually rebel against you.

African leadership turned its back on its people, rejecting vital political and market reforms. If this continues, more and more countries will ignite in wars and devastation.

This is the reality we face in Africa today.

A native of Ghana, Dr. George Ayittey has firsthand knowledge of how the overreaching hand of government brought tyranny and misery to virtually all of Africa. War, disease, state terrorism and wanton carnage have devastated a continent that once had hope.

Dr. Ayittey is a passionate advocate of free men, free markets, and the rule of law as solutions to the problems that plague Africa today. He is the author of five books and dozens of articles.

He lectures extensively on the problems confounding Africa’s development and is a frequent guest on radio and television programs, including Nightline, The News Hour, BBC World News, and CNN.

Dr. George Ayittey is Distinguished Economist at American University in Washington D.C.,> and the President of the Free Africa Foundation.