The slump in foreign direct investment abated in May as global lockdown restrictions eased allowing investors to resume campaigns, particularly in the telecoms and renewables sectors.

The fDi Index – which tracks foreign investor sentiment – reversed its nosedive since the onset of the Covid-19 crisis in March. 


The index scored a reading of 511 in May, which marks a slight recovery from the record low of 439 touched in April, according to fDi Markets. However, the index remains well below the activity levels seen in 2019, and is down 42.8% from May 2019. 

“The World Bank and the World Trade Organisation expect a ‘V-shaped’ global recovery with trade getting going again in late 2020 or early 2021. But this is not the case for FDI, where even a ‘U-shaped’ recovery is optimistic,” James Zhan, who leads Unctad’s investment and enterprise division, told fDi

“I expect a gradual and moderate recovery in foreign investment starting at the end of 2021 or at the beginning of 2022.”

Telecoms buck trend  

Foreign investors announced 601 projects in May, down from 1,157 a year earlier, fDi Markets figures show. However, a handful of sectors have been laying the groundwork for post-Covid investment campaigns. 

Digitisation looks set to play a key role in the new normal that lies ahead, and companies in the tech sector stand out amid a generally lacklustre investment environment. 

Taiwanese contract chipmaker TSMC, for example, announced a huge new $12bn foundry in Phoenix in May. 

Digital and telecommunications infrastructure providers have also been swift to unveil new projects as countries have got to grips with the Covid-19 emergency. Microsoft announced multi-billion dollar investments in new cloud regions in Italy, New Zealand and Poland

China Mobile International, Facebook, MTN GlobalConnect, Orange, Saudi Telecom Company, Telecom Egypt, Vodafone and WIOCC joined forces to build a 37,000 subsea internet cable circumnavigating the African continent – the system is expected to go live in 2023/4, delivering more than the total combined capacity of all subsea cables serving Africa today 

Overall, investors in the telecoms sector announced 62 projects in May, from 37 a year earlier, fDi Markets figures show. In terms of capital expenditure, these projects represented $6.2bn of new investment in May, compared to $787.9m in May 2019.

Green energy drive

The renewable energy sector also sidestepped the global investment slump in May, continuing a trend

Oil companies have led the way as weak oil prices and the shift towards sustainability have forced them to reinvent their business models. 

In May, Norway’s Equinor launched an operations and maintenance base at Dogger Bank, the 3.6GW offshore wind farm joint venture with Germany’s SSE Renewables. Total investment is estimated at $9bn. 

Energy companies Engie and Enel Green Power also announced renewable energy investments in May. 

Overall, the sector generated 44 projects in May, against 27 projects a year earlier, fDi Markets figures show, while pledged investment almost doubled to $15.8bn. 

However, with the exception of telecoms and renewables, most other FDI sectors saw sizable falls, with investment all but drying up in oil and gas, tourism and electronic components.