WASHINGTON (Reuters) - African nations must stop seeking handouts and begin tough structural reforms, especially on trade, if they truly want to improve their economies, Secretary of State Hillary Clinton on Monday.

“Most of the work that needs to be done needs to be done in Africa,” Clinton told a forum about U.S. diplomacy on the continent.

“If you look at trade between African countries, it is abysmally minimalistic,” Clinton said. “African countries don’t trade with themselves. They have barriers and tariffs and customs problems that stand in the way of developing their own economies.”

Clinton’s sharp comments were in response to a question about broadening the African Growth and Opportunity Act (AGOA), a measure passed by Congress in 2000 which gives favorable access to U.S. markets to dozens of African countries.

While many African governments hope the benefits can be made permanent, Clinton signaled Washington was going to look for signs that African countries are serious about improving their own domestic economic policies.

“The United States will do our part, but African countries have to start doing their part and making the changes that will grow the economies in the sub-Saharan region,” she said.

“It means doing things that are going to run afoul of special interests and government bureaucrats and businesses that already have a lock on a market,” Clinton said.

“They’d rather have the biggest piece of a small pie than a smaller piece of a big pie. So if you are going to have that mentality, it is really hard to utilize the incredible tool that AGOA is,” she said.

Both Clinton and President Barack Obama have used trips to Africa to stress good governance, saying local leadership is as important as foreign help in the drive to stamp out war, corruption and disease on the continent.

Despite big improvements under AGOA, overall U.S. trade with sub-Saharan African countries remains small, accounting for just slightly more than 1 percent of total U.S. exports and about 3 percent of total U.S. imports in 2008.

U.S. imports from sub-Saharan Africa grew about 28 percent in 2008 to $86 billion, but higher oil prices accounted for a large chunk of that increase.

Sounding almost exasperated, Clinton indicated that Africa’s arguments for the redress of economic imbalances left by colonialism were beginning to wear a little thin -- at least in Washington.

“For goodness sakes, this is the 21st century. We’ve got to get over what happened 50, 100, 200 years ago and let’s make money for everybody. That’s the best way to try to create some new energy and some new growth in Africa,” she said.