Zimbabwe's recent political and economic problems have turned off the tap of foreign investment, the country's central bank has admitted.

In 2001 Zimbabwe attracted just $5.4m of direct investment, the Reserve Bank of Zimbabwe said.

In contrast, 1998 - the best year on record - produced investments totalling $436m.

"Resource flows to Zimbabwe - a critical component of investment finance - have been declining over the past five years, reflecting an unfavourable domestic macro-economic climate," the RBZ said.

Tough times

The land seizures and, more recently, assaults on industrial plant when owned by Zimbabweans suspected to be backing the opposition by gangs armed and trained by the government have turned the economy on its head.

The drain of the long-running war in Congo has also taken its toll.

Inflation is now at 116.7%, and the currency is officially pegged at 55 Zimbabwe dollars to the US dollar but trades on the "parallel market" at about six times that.

Meanwhile, interest rates are kept artificially low, meaning Zimbabweans are investing in buildings, other concrete assets and the stock market to try to retain the value of what money they have.

That has driven a surge on the Zimbabwe Stock Exchange, up more than 250% in 2001.

But the surge disguises massive disinvestment by foreigners.

According to RBZ figures, the capital account was $424m in deficit in 2001, after a $298m deficit the year before, as foreign investors deserted the ZSE.