Government Plans to sell its stake in Safaricom Plc

*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*

On Mon, 26 May 2025, 12:23 A Mutheu, <[email protected]> wrote:

> Dear Victor,
>
> 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*
>>