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Kenya’s Treasury has confirmed plans to sell part of its 34.9% stake in Safaricom by June 2026, as it seeks to raise KSh149 billion (US$1.1 billion) through state-asset sales to support the 2025/26 national budget and reduce reliance on new taxes.
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Treasury Cabinet Secretary John Mbadi said the government’s holding in Safaricom PLC, the country’s most valuable listed company with a market capitalization of KSh280.5 billion, represents the only “big-ticket” option available to close the funding gap without introducing new levies.
Officials are currently evaluating two divestment options:
- A secondary public offering (SPO) on the Nairobi Securities Exchange (NSE)
- An off-market block sale to high-net-worth individuals or private equity investors
A sale of 5% to 10% of Safaricom shares at the current trading price of KSh19.90 could yield KSh39.8–79.7 billion, surpassing or matching the record KSh51.7 billion raised during Safaricom’s 2008 IPO.
Safaricom Financials Support Premium Valuation
Despite trading below analyst estimates of fair value, Safaricom posted a 7.2% rise in net profit to KSh45.7 billion in the fiscal year ending March 2025, and declared a KSh1.20 per-share dividend. Market analysts suggest that a private transaction would be more beneficial to the government, as it could command a valuation premium unavailable in public markets.
Fiscal Impact and Privatization Roadmap
The Safaricom stake sale is a central pillar of the KSh4.2 trillion 2025/26 national budget strategy. Proceeds are expected to ease debt-servicing obligations, even though the government will relinquish future dividend income from one of its most lucrative assets.
The move also revives Kenya’s stalled privatization programme, with the Kenya Pipeline Company (KPC) among the next parastatals slated for divestiture. This policy shift could attract global institutional investors, especially those seeking high-yield African telecom assets in a cash-generative sector.
Mixed Reactions from Economic Commentators
Reactions to the planned sale have been sharply divided:
- Ephraim Njega, policy analyst, supports strategic asset sales over expensive external borrowing and has long advocated for divestiture instead of issuing eurobonds.
- Kevin MK, a fiscal policy critic, warns the move may be futile if government spending and patronage networks remain unchecked.
- Amoroso Gomber views the divestment as ideologically sound, reflecting a long-overdue retreat of the state from market activity, but warns of systemic overreach in the public sector.
- Chege Mundia voices deeper concerns about sustainability, arguing that selling off strategic assets to plug short-term deficits could leave Kenya vulnerable in future crises.
This debate marks a pivotal moment where Kenya’s fiscal policy intersects with national identity, raising key questions: Is this a pragmatic step to raise capital—or a fundamental redefinition of the state’s role in the economy?
