The government has now formally begun selling its 15 percent stake in Safaricom to Vodacom of South Africa—a transaction that, once combined with the sale of future dividend rights, will raise approximately Sh244.5 billion for the exchequer.
Two statutory notices—one issued by Vodafone Kenya under the Takeovers Regulations, and another by Safaricom PLC under the Public Offers and Disclosures Regulations—set out the architecture of the deal.
What I find most revealing is not the headline valuation or even the politics around it, but the silent transformation happening beneath the surface: the foreign investor is taking 100 percent control of Vodafone Kenya.
Anyone familiar with Safaricom’s early history will appreciate the significance. Vodafone Kenya—the entity through which Vodafone Group long held its shares—was once the vessel that accommodated the infamous Mobitelea.
It was incorporated in 1998 with company number C79550 and registered to a lawyer’s office in Lonrho House. In many ways, this new transaction sterilises that dark and obscure chapter.
For years, Kenya has sat on immense value. Safaricom is the region’s most profitable company, boasting impressive margins and unmatched dominance in mobile money through M-Pesa. Yet the State has maintained its 35 percent stake largely out of sentiment, political pride, and the symbolism of holding equity in the country’s corporate crown jewel.
But the cold reality is unavoidable: the exchequer is now in a tightest fiscal position. Debt servicing is consuming the budget. Development spending has been crowded out. Cashflow pressures are acute. In such a context, raising Sh244.5 billion without borrowing is not just attractive—it is financially rational.
Critics will inevitably ask whether Kenya is surrendering too much influence over its national champion. They will argue the Vodacom will now effectively control the region’s most important telecoms and fintech infrastructure. But this claim is, at best, debatable.
The disclosures show that the chairman will remain Kenyan. A good number of independent directors will remain local.
There will be no merger-related redundancies for the first three years. The government retains a 20 percent stake and the right to appoint two directors, alongside safeguards around national interest, security, and data sovereignty.
Beyond that, Vodafone, with its 39.9 percent stake, already exercised effective operational control over Safaricom. This transaction merely formalises a structure that has existed de facto for years. The idea that Kenya is “losing” Safaricom is more political rhetoric than economic substance.
Still, critics will dismiss the deal as a fire sale disguised as portfolio optimisation. But what is the alternative? A fiscally distressed state clinging to the illusion of control while the economy suffocates under debt? What is the value of holding on to “prestige equity” when the exchequer is starving for liquidity? When you are under pressure to meet debt obligations, cutting development budgets, and borrowing domestically at punitive rates, then control—mere control—becomes a luxury.
Seen from a wider lens, the government has been forced by circumstances to behave like a portfolio manager rather than a sentimental, long-term holder of assets. Mature, high-value state investments are precisely the assets that should be monetised to reduce fiscal pressure and fund productive investment.
Consider the ongoing process to sell a stake in Kenya Pipeline, where the state hopes to raise up to Sh600 billion. I am reliably informed that the transaction adviser has been directed to put the deal “on the road” by December 19—an indication of the urgency gripping Treasury.
We have entered an era where the State will increasingly rely on asset sales, securitisation, and strategic divestiture to plug widening fiscal gaps.
The evidence is everywhere. The other day, the government securitised part of the Road Maintenance Levy and raised Sh178 billion to pay contractors. It securitised the Sports Fund to raise Sh40 billion for the Chinese-built Talanta Stadium.
Tourism Levy receivables were securitised to raise billions more for the construction of the new Bomas of Kenya complex. And the Nairobi–Nakuru–Mau Summit road is being delivered through a PPP model, shifting financing and operational risks to private partners.
This Safaricom transaction must be understood within this broader paradigm shift. Kenya is being nudged—quietly but decisively—into an era where the state survives not by taxing or borrowing, but by monetising assets and optimising the balance sheet.
If done transparently and strategically, this could mark the beginning of a more disciplined era in state asset management.
The writer is a former Managing Editor for The EastAfrican.
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