The Kenyan government has announced plans to divest a significant portion of its 34.9% stake in Safaricom PLC, aiming to raise KSh149 billion ($1.16 billion) during the 2025/26 fiscal year. This move is part of a broader strategy to fund the national budget and reduce public debt without introducing new taxes.
Strategic Divestment to Support Budgetary Needs
Treasury Cabinet Secretary John Mbadi stated that the sale of Safaricom shares represents a “big-ticket” opportunity to generate substantial revenue. The government is considering various methods for the divestment, including a secondary public offering or direct sales to institutional investors. A 5–10% stake sale at the current share price of KSh19.90 could yield between KSh39.8 billion and KSh79.7 billion.
Safaricom remains a highly profitable entity, reporting a net profit of KSh69.8 billion ($540 million) in 2024, bolstered by its mobile money platform M-PESA and data services. The company declared a dividend of KSh1.20 per share, resulting in earnings of KSh16.8 billion ($130.5 million) for the government.
The planned sale is part of a wider privatization initiative targeting several state-owned enterprises, including the Kenya Pipeline Company and the Kenyatta International Convention Centre. The government aims to enhance efficiency, attract private investment, and reduce the fiscal deficit through these divestments.
Recent amendments to Kenya’s privatization laws have streamlined the process, granting the Treasury greater autonomy in executing asset sales without requiring parliamentary approval for each transaction. This legal framework is expected to expedite the divestment process and attract credible investors.
The government’s decision to sell a portion of its stake in Safaricom reflects a strategic approach to addressing fiscal challenges while maintaining investor confidence. As the privatization process unfolds, stakeholders will closely monitor its impact on the telecommunications sector and the broader economy.
