"Things have changed dramatically for the better in Africa...[It] is a continent on the move," Wolfowitz told African politicians, businessmen and international organisations at an economic conference in Abuja, Nigeria, on Tuesday.
"Fifteen countries in Africa have sustained about four per cent growth rate in the past 10 years. Two countries - Mozambique and Rwanda - have sustained between eight and 10 per cent growth rate," he said.
He said that both countries showed what good governance could achieve in Africa.
"These two countries have demonstrated what people can do to help themselves after civil wars," he said.
Wolfowitz said that African leaders were increasingly making tough reforms to improve their countries' economies - for instance by privatising state companies and tackling corruption.
But he also said that much work was still needed.
"That an average African lives on a dollar per day is a sad statistic. It is also terrible," he said, pointing out that corruption, disease and hunger still present major challenges for the continent.
"Africans face terrible health hazards such as malaria and HIV/AIDS. Millions of children - 3,000 a day - die every year of preventable diseases like malaria. This has to be eradicated here," he said.
He urged African leaders to learn from South Korea, which he said had become one of the world's most successful economies through free-trade, liberal laws and privatisation.
"South Korea is one of the success stories in the world. It is one of the 12th richest nations in the world," he said. "Government policies make all the difference."