Kenya Torn Between Smart Deal Or Risky Gamble In Safaricom Sale Debate
Kenya is on the cusp of one of its biggest-ever financial decisions; selling a 15% stake in Safaricom, the company that powers its digital economy. The deal would hand control of Kenya’s most valuable company to a foreign entity and put a colossal USD 1.6 B into state coffers. But a heated debate is raging over whether the price is right, or if Kenya is selling its crown jewel on the cheap. The differences have found its way to parliament where debates formally kicked off last week and remains ongoing.
The government is in advanced talks to sell 6 billion shares to South Africa’s Vodacom at KES 34.00 each, which would give the South African firm a commanding 55% ownership. The National Treasury insists this is a fair price and a necessary move to raise money for roads, dams, and power projects without taking on more debt.
However, critics from accountants to lawyers argue the math is flawed. They say the government is using a questionable calculation and, in doing so, risks giving up long-term income and control over an asset as vital as the nation’s digital waterworks for a short-term cash fix.
How Do You Price a National Champion?
The heart of the controversy is how to value a company like Safaricom, which has outgrown a mere mobile network as the engine behind M-Pesa, the mobile money service handling over 100 million transactions a day. Its operations underpin a vast ecosystem of dealers and agents employing hundreds of thousands.
The Treasury says the KES 34.00 price is a 23.6% premium over Safaricom’s average share price from the last six months. Yet critics, like the Institute of Certified Public Accountants of Kenya (ICPAK), point out that this method looks backward at old market trades rather than forward at Safaricom’s future potential.
They note the price is far below Safaricom’s peak of 44.70 shillings in 2021. An independent valuation commissioned by the Treasury itself produced a wide range of values, with one method suggesting a price as low as KES 18.50 and another indicating up to KES 33.50. Settling at KES 34.00 shillings, critics argue, lacks transparent justification.
Cash Today vs. Income Tomorrow
Beyond the share price, a second deal is bundled in. The government will also get an upfront payment of KES 40.2 B shillings from Vodacom in exchange for future dividends on its remaining 20% stake.
The Treasury frames this as “cheap financing,” but financial analysts see it differently. They argue it’s effectively selling the next three years of dividend income at a steep discount—a rate of over 16%. The Kenya National Chamber of Commerce warns that trading a steady annual dividend stream (KES 4 B to KES 6 B) for a one-off lump sum could mean losing an equivalent amount of income within 10-15 years.
More Than Money
The debate extends beyond shillings and cents to questions of national interest. If Vodacom’s stake rises to 55%, Kenya’s influence shrinks from being the largest shareholder to a 20% minority owner.
The Law Society of Kenya has voiced strong objections, arguing the deal threatens Kenya’s strategic leverage over its own mobile money system and the vast troves of sensitive citizen data Safaricom holds. In response, the Treasury has pledged to retain two seats on Safaricom’s board and secure commitments on job security and local management.
The deal now rests with Kenya’s parliament, which must decide whether the immediate need for infrastructure cash outweighs the long-term risks of selling control of a company that has become synonymous with Kenya’s modern economy.
