Africa’s Socialism Is Keeping It Poor

Authored by Germinal G.Van via The Mises Institute,

It has been widely, vividly, but nonetheless wrongly believed that socialism is the appropriate system to improve the living standards of Africans. Worse yet, it has been misleadingly claimed that socialism is compatible with African culture because African culture is fundamentally a collectivist culture.

However, one fact remains undisputable: socialism has failed wherever it was tried, and the African countries that have experimented with socialism were not exempted from its failure.

The undeniable fact remains that Africa has the lowest living standard of all continents after Antarctica. The reason why the living standard of the majority of African countries is so low compared to the rest of the world, is because socialism has impoverished the African continent.

At the outset of the post-colonial era in the 1960s many African countries — such as Tanzania, Angola, Mali, Ethiopia, Ghana, Mozambique, Egypt, Senegal, Guinea, Congo and many more — have embraced socialism as their economic and political system. These countries that have embraced socialism became significantly worse off by the 1980s. For example, Tanzania was one of the fast-growing economies in East Africa until Julius Nyerere implemented the “Ujamaa,” which means socialism and brotherhood in the Swahili language. Before the implementation of the Ujamaa; Tanzania had a GDP similar to South Korea . Subsequently to the implementation of Ujamaa, economic growth became unsurprisingly stagnant. The policy of collectivization impoverished the Tanzanian people. Food production fell, and the country’s economy suffered . This decline in productivity has made Tanzania one of the poorest countries on the continent. In Ghana, under the rule of Kwame Nkrumah, one of the foremost African political leaders of the post-colonial era; socialism was also implemented as the economic system of the country. 

Socialism, as a domestic policy in Nkrumah’s seven-year development plan, was to be pursued toward “a complete ownership of the economy by the state.” A bewildering slate of legislative controls and regulations were imposed on imports, capital transfers, industry, minimum wages, the rights and powers of trade unions, prices, rents and interest rates. Private businesses were taken away and nationalized by the Nkrumah government. The result has also been unsurprising. Resources were mismanaged, inflation rose, and economic stagnation occurred in Ghana. Zimbabwe has also suffered from the myths of African socialism under Mugabe’s rule. Mugabe collectivized the means of production in the late 1980s when he became Zimbabwe’s strongman. 

Rampant corruption, huge budget deficits, and mismanagement of resources have dragged the economy, hyperinflation, 60 percent unemployment, and a desperate shortage of hard currency. These examples clearly demonstrate how socialism had utterly stagnated the economies of these countries until a market economy was once again reinstated.

But the question remains as to why Africans deeply believed in socialism and embraced it in the 1960s. In Africa, socialism was presented as an anti-colonial and anti-imperialist ideology while capitalism was perceived as the ideology of the oppressor, the colonizer, and of profit. Africans strongly believe in socialism because they think that socialism is compatible with African culture since African culture is a collectivist culture. African culture values the group over the individual. It values the concept of sharing, solidarity, and altruism. Of course, all these moral virtues are well-intended, but they play no substantial role in the improvement of the living standard of people. What improves the living standard of people is the ability to retain private property, to voluntarily exchange with one another what we own in order to create capital. Some African countries in the post-colonial era resisted the socialist temptation; notably countries like Côte d’Ivoire, Kenya, and South Africa.

For example, in the 1960s and 1970s, Côte d’Ivoire was the most economically advanced country in West Africa. While its neighbors were embracing socialism, Côte d’Ivoire opted for a market economy. Despite having an authoritarian political regime, like all African countries during that time; the Ivorian people were, nonetheless, economically free. They had the freedom to create businesses, and to expand private property. From 1960 to 1979, the GDP in Côte d’Ivoire grew at 8.1 percent per year, which means that in real terms capita, it increased from $595 to $1,114. Cote d’Ivoire’s economic expansion during that period was called “The Ivorian Miracle” because the country was exporting agricultural goods to the neighboring countries have had a shortage of food production due to their socialistic policies.

The Ivorian Miracle made Côte d’Ivoire the most prosperous nation in West Africa between 1960 and 1980.

What Africans have failed to grasp about capitalism and the free market is that, it is not a system intrinsic to Western culture. It is a system intrinsic to human nature regardless of race, ethnicity, or the local culture. Socialism has failed in Africa as it has failed in Eastern Europe, India, China and in South America. Even if Africa is culturally collectivist, it is important to comprehend that a group is a collectivity of individuals whereby each individual within the group is stimulated by the pursuit of his own interests. The pursuit of one’s self-interests is an intrinsic factor of human nature that no central authority can change regardless of the goal of the common good.

Despite the collectivist nature of African culture, African culture is not exempted from that natural law of human nature. Coercing human nature to do something that is not in harmony with the nature of human understanding, will result in failure. That is why socialism, wherever it is tried, will always fail.