Will Capitalism Really Solve Africa’s Problems?

Why Economic Freedom Creates Prosperity

I’m not alone in my mission to raise Africa out of poverty and create prosperity. 

But every time I talk on social media about the solution—focusing on economic freedom, supporting entrepreneurs, and creating better business environments—I get comments like these: 

“Capitalism has always been based on exploitation. Who are you going to exploit?”

“It’s like selling your soul. The cons outweigh the pros.” 

“Capitalism will make a bigger wealth divide. Africa needs to decolonize itself through Marxism.”

“The solution is worse than the problem.”

My first reaction is, “WHAT?!?!” 

But then I slow down and remember that many African leaders and intellectuals have been spouting the idea for generations that socialism is the moral path while capitalism is the root of all evil. No wonder so many people feel this way. 

Their concerns come from a real place, so it’s worth taking time to unpack the two big problems I see with this philosophy. 

The first has to do with success rates. My goal is for Africa to become prosperous. And by that I mean that I want our people—at all levels of society—to lead happy, healthy, and productive lives. If socialism could get us there, I’d be the first one on board. 

But it can’t. 

Show me a country that has become prosperous by having a government-controlled economy. You can’t find one because they all failed or became radically free-market (as with China). 

History shows us that prosperity follows economic freedom. Entrepreneurs create jobs; jobs create stability, wealth, and well-being.

The one consistent thing behind all prosperous societies is a free market (or at least the base requirements for entrepreneurs to create value). 
—Magatte Wade

The second problem has to do with a fundamental misunderstanding of what I mean when I say “capitalism.” 

I’ve seen so many anti-business, anti-capitalist people who point to the poverty in Africa and say, “See? Capitalism doesn’t work!” 

But what they don’t understand is that there is a HUGE difference between open markets (a.k.a., entrepreneurial capitalism) and crony capitalism, where your chances for success are based on who you know, especially in government. 

Crony capitalism creates corruption. It’s anti-competitive, exploitative, and keeps people stuck in poverty. 

Meanwhile, entrepreneurial capitalism goes hand in hand with conscious capitalism, which is a rising tide that lifts all boats. It’s based on voluntary exchange and encourages individuals to start businesses, create jobs, and engage in trade freely—all of which creates economic growth. 

Entrepreneurial capitalism offers the clearest path to African prosperity. 

If we want to have better lives, we need to be able to build houses and office buildings. We need the freedom to manufacture goods. We need the freedom to hire and fire freely. We need to be able to open businesses easily (instead of spending months gathering paperwork and the associated fees). We need access to diverse kinds of financing structures. We need access to fair and timely adjudication for addressing business disputes. 

None of that means selling our souls. None of that means taking advantage of other people. 

In fact, it promotes an environment with more equal access to opportunity where all Africans can prosper—not just the people who happen to know someone in power. 

If you’ve been led to believe that all capitalism is crony capitalism—a confusion between the value-creating aspect of entrepreneurial free enterprise, combined with the illegitimate combination of government and business—it makes sense why you would reject capitalism out of hand. 

But just because some people do operate that way, it doesn’t mean that their behavior defines capitalism. That’s like saying that because some foods make you sick to your stomach, all food will make you sick. Not only is it a simplification, but it’s flat-out WRONG. And sticking to that idea will only ruin your health. 

The one consistent thing behind all prosperous societies is a free market (or at least the base requirements for entrepreneurs to create value). 

Africa is ripe for economic prosperity if we can cut back nonsensical regulations, open up our markets, and support the many talented individuals we have waiting in the wings. 

I know how ready our people are for opportunities. And I know how much talent lies within our brains and hearts. We just need for people to see that entrepreneurial capitalism is our best avenue to success.

It only takes a small percentage of people who think for themselves to shift opinions on many issues. I invite you to be one of them.