Kenyan Parliament Discusses Treasury Proposal to Sell 15% Stake in Safaricom

The National Treasury and Economic Planning  has launched the process of selling a 15 per cent stake in Safaricom PLC to the Vodacom Group, a move aimed at raising resources for development financing. Speaking before a joint committee of the National Assembly, Cabinet Secretary for the National Treasury, Hon FCPA John Mbadi, said the partial divestiture is expected to generate approximately KES 204.3 billion, with total proceeds projected at KES 244.5 billion when an upfront dividend monetisation component is included.

Under the proposal, the government plans to sell 6,009,814,200 shares, representing 15 per cent of Safaricom, at a price of KES 34 per share. This price represents a 23.6 per cent premium over the six-month volume-weighted average as at December 2025. Upon completion, the government will retain 20 per cent ownership, while Vodacom Group’s stake will rise to 55 per cent, consolidating ownership from both the government and Vodafone.

The proceeds are intended to provide seed capital for the proposed National Infrastructure Fund and the Sovereign Wealth Fund. Hon Mbadi explained that the approach reflects a shift toward alternative financing mechanisms at a time of tightening fiscal conditions, with private sector participation increasingly expected to meet the country’s development needs. The funds will be directed to priority sectors including energy, roads, water, airports, and digital infrastructure, while easing reliance on borrowing and taxation.

To protect public interest, safeguards have been incorporated, including the government retaining two board seats at Safaricom, commitments on employment stability, requirements on board leadership, and continued support for the Safaricom Foundation.

Legally, the transaction is being conducted under the Privatization Act, 2025, and Section 87A of the Public Finance Management Act, which requires parliamentary consideration within 28 sitting days. The proposal is also subject to approvals by the Capital Markets Authority, the Central Bank of Kenya, and the Competition Authority of Kenya.

Hon Mbadi emphasized that the divestiture aligns with broader reforms clarifying the government’s role in policy and regulation, while allowing the private sector to lead in commercial activity. He added that the scale of the transaction demonstrates confidence in Kenya’s capital markets, highlighting the Nairobi Securities Exchange’s ability to accommodate large transactions.