By Martin Plaut BBC News Is the credit crisis about to send Africa into yet another downward spiral? Perhaps not. In fact it is possible that the continent could fare better than the rest of the world. This is at least in part because most African economies have been so marginal to the international economic system that they have been less affected than other regions of the globe. Many countries have regulations which prevented them from investing in the so-called 'toxic' financial products Davinder Sikand, managing partner for the Aureos Africa Fund, which has $400m (£236m) invested in the continent, says that Africa's banks have been so conservatively managed that they have almost no exposure to the sub-prime market that has caused such havoc elsewhere in the world. "Most of our financial institutions are not directly impacted," he says. "Many countries have regulations which prevented them from investing in the so-called 'toxic' financial products." The International Monetary Fund (IMF) takes a similar view and says there is no systemic risk to any African country in terms of banking. But if most African states have been relatively insulated from the credit crunch, the same cannot be said of the most developed economy on the continent - South Africa. South Africa is affected in at least two ways: The rand has been severely hit, experiencing record falls as international investors claw back their money to meet more urgent needs at home. South Africa has run a sizeable balance of payments deficit in recent years, financed by foreign investment and this has been flowing out of the country Unlike many other African countries, South Africa has relied on raising large sums on international markets. The state's electricity supply company, Eskom, needs to raise more than $30bn (£17bn) over the next five years, but had to delay issuing bonds in the current market conditions. But the rest of Africa does not get off scot free. Growth rates If the world goes into a slump, demand for Africa's commodities will fall, taking export earnings with them. China has an insatiable appetite for Africa's resources Oil prices have halved from $147 (£87) a barrel to $70 (£41). Although this will hit countries like Angola, Chad, Nigeria, and Sudan, most based their budgets on conservative oil prices and will not be too severely affected. Nigeria's budget - for example - is based on a benchmark price of $62.50 (£37) a barrel. Copper has also fallen, which will have a substantial effect on Zambia and the Democratic Republic of Congo. But these are likely to be short-term effects, as China has an almost insatiable appetite for minerals. It is likely to dent growth rates, which have averaged around 5% a year over the last 10 years. Before this autumn's financial meltdown, the IMF was predicting growth of 6.6% this year; now it is predicting a 3% growth. Mr Sikand agrees. "There is likely to be a slowdown in African economies, but instead of talking about a 6% or 7% growth rate, you are talking about 3%, 4% or 5% growth." 'Hopeless continent'? Economists believe Africa's growth is more solidly based than it has been in previous years. If you are a direct investor... then political risk affects your every waking hour Farouk Soussa Standard and Poor's And it is not just the obvious oil-producing countries that have been benefitting. Countries like Botswana, Ghana, Mozambique, Tanzania, Uganda and Zambia have all done well in recent years. So what has really improved Africa's economic prospects? Major injections of foreign aid have helped, as have the billions sent back in remittances. But probably the most important factor has been the improvement in economic management. Razia Khan heads Standard Chartered Bank's African research effort. "In recent year's we've seen improved macro-economic management; bringing budget deficits down, not having high rates of inflation, bringing interest rates down," says Ms Khan. "This has helped change the prospects in Africa." But if the future looks brighter in some countries, the same cannot be said right across the continent. Democracy reduces risk, say investors Africa still has its fair share of instability. There is Sudan's western region of Darfur, Somalia and eastern DR Congo for a start - and that is before anyone mentions Zimbabwe. Farouk Soussa deals with Africa for the international credit rating agency, Standard and Poor's. For someone like him - advising international investors on whether to put their cash into African projects - risk is a constant headache. "If you are a direct investor, and you are going to buy up a company, then political risk affects your every waking hour - from corruption, to changes in rules, to violence and crime," he says. "But with the push for democratisation, there has been a reduction in risk." Once the dust settles from the current credit crisis, the prospects for African growth look distinctly promising. It may just be that it can - at last - shrug off its label once given it by the Economist magazine as "the hopeless continent".