Government Plans to sell its stake in Safaricom Plc

Thanks for sharing this issue about *Safaricom Stake Sale – Risking Digital
Sovereignty for Short-Term Relief.*

While the government’s urgency to raise KSh 149 billion to plug the 2025/26
budget deficit is understandable, the plan to sell part of its 35% stake in
Safaricom PLC raises serious concerns, not just fiscal, but legal,
cybersecurity, and crisis management-related.

Safaricom is far more than a profitable parastatal. It is one of Kenya’s
most strategically significant digital infrastructure assets. Its reach
extends deep into government services, mobile money platforms, national
emergency communications, and citizen data systems. It is, in essence, the
backbone of Kenya’s evolving digital state.

For context, Safaricom posted a net income of KSh 69.8 billion for the full
year ending March 31, 2025. It declared a dividend of KSh 1.20 per share,
amounting to a total payout of KSh 48.08 billion. This means the
government’s 35% stake yields over KSh 16.8 billion annually, i.e. reliable,
recurring income with no new taxes or debt involved. That is revenue
stability we cannot afford to compromise.

>From a cybersecurity and legal standpoint, divesting such a stake, particularly
through a block sale to private or foreign investors, introduces
significant risks:

–

*Digital sovereignty threats*: Safaricom operates critical
infrastructure that supports e-citizen services, law enforcement, health
messaging, and mobile payment systems like M-Pesa. Transferring
control or influence
to private or foreign entities exposes the nation to strategic
vulnerabilities.
–

*Data governance and privacy issues*: Safaricom handles sensitive
citizen data governed by the Data Protection Act, 2019. A change in control
must be preceded by a rigorous Data Protection Impact Assessment and
clear legal safeguards to prevent misuse or transborder data compromise.
–

*Crisis response implications*: Safaricom plays a crucial role in
disseminating emergency alerts and coordinating national crisis responses.
Weakening government control over this channel could diminish Kenya’s
ability to manage emergencies, including public health and security threats.

The economic argument for the sale also falls short when examined more
closely. Kenya’s fiscal pressure stems largely from recurrent expenditures
and unsustainable debt servicing and not a lack of valuable public assets.
Cutting discretionary spending on non-priority projects like
refurbishments, inflated travel budgets, and excessive administrative costs
would send a stronger message of fiscal discipline than selling strategic
revenue-generating assets.

We must consider alternative approaches including :

–

*Targeted public IPO*: A carefully structured secondary offering,
limited to domestic institutional and retail investors, could raise funds
while preserving national control. Clauses such as golden shares or
national interest protections could be built in.
–

*Expenditure reform*: Rather than liquidate profitable assets, a
line-by-line review of non-critical government spending should be conducted
to reduce wastage.
–

*Digital revenue expansion*: Safaricom’s infrastructure could be used to
broaden Kenya’s tax base through digital compliance and informal sector
inclusion thus generating revenue without compromising sovereignty.

Ultimately, this proposal sets a troubling precedent. We are contemplating
the sale of an asset that generates predictable income, supports over 60%
of GDP in mobile money transactions, and undergirds our national
e-governance agenda, all in the name of short-term budget relief???

This is not just a financial decision; it is a question of long-term
national resilience.

Stay happy,

Mutheu.

On Mon, May 26, 2025 at 10:53 AM Victor Kapiyo via KICTANet <
[email protected]> wrote:

> Dear Listers,
>
> The Kenyan government plans to sell a significant portion of its 35% stake
> in Safaricom PLC as part of a broader strategy to raise KSh 149 billion
> (about $1.16 billion) during the 2025/26 financial year to finance the
> national budget.
>
> Two main approaches are being considered: a secondary Initial Public
> Offering (IPO) on the Nairobi Securities Exchange, or a block sale
> targeting high-net-worth investors, potentially attracting regional and
> international buyers.
>
> Safaricom, whose estimated value is at around KES 280.5 billion, is the
> largest and most valuable state-owned enterprise capable of generating
> substantial revenue compared to other parastatals. The government receives
> healthy dividends of about KES 16 billion annually from the company, which
> now has operations in neighbouring Ethiopia.
>
> Read more:
> www.businessdailyafrica.com/bd/economy/treasury-to-sell-safaricom-stake-in-sh149bn-plan-5056992
>
>
> Is this a smart move? What say you?
>
>
> *Victor Kapiyo*
> Partner | *Lawmark Partners LLP*
> *Nine Planet Apartments, Nairobi | **Web: www.lawmark.co.ke
> <www.lawmark.co.ke/> *
> ====================================================
>
> *“Your attitude, not your aptitude, will determine your altitude” Zig
> Ziglar*
>