The Lower Eastern Times Opening The Third Eye
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The National Assembly has opened the public participation phase for the government’s proposal to offload a 15% shareholding in Safaricom PLC.
The plan, outlined in Sessional Paper No. 3 of 2025, aims to raise about Sh244.5 billion but has sparked widespread criticism over alleged undervaluation and concerns about transparency.
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A joint committee of the Finance and National Planning Committee and the Public Debt and Privatization Committee is now inviting submissions from stakeholders—ranging from shareholders and customers to employees, regulators, and members of the public.
According to the notice, the government seeks to sell 6 billion shares, equivalent to 15% of its current stake, while maintaining a 20% strategichold in the telecom firm.
Based on a proposed share price of Sh34, the sale is expected to generate Sh204.3 billion, with Vodacom Group projected to add Sh40.2 billion as an advance dividend payment, bringing the total proceeds to Sh244.5 billion.
The Treasury says the divestment will help mobilize non-tax revenue to finance key infrastructure projects in energy, transport, water, aviation, and digital sectors. It argues the move will relieve pressure on public borrowing and strengthen Safaricom’s competitiveness through more market-oriented ownership.
Despite the sale, the government says it will retain influence through two board seats and oversight provisions. Vodacom has pledged to keep Kenyan leadership on the board, continue support for the Safaricom Foundation, and avoid job cuts for at least three years.
Growing Concerns Over Valuation
The proposal has triggered political backlash, with critics claiming the government is moving too fast and selling a valuable national asset at a discount.
Kiharu MP Ndindi Nyoro blasted the deal as reckless, saying the Sh34 share price severely undervalues Safaricom compared to its Sh45 trading price in 2021. He noted that the plan places Safaricom’s value below Sh1.4 trillion—about 24% lower than the 2021 valuation of Sh1.8 trillion.
Former Deputy President Rigathi Gachagua also opposed the sale, accusing the government of offloading profitable state assets without adequate public input. He argued that Safaricom’s shares are worth Sh70–80 and suggested the sale would cost the country roughly Sh250 billion in value.
Gachagua likened the move to selling a productive cow that feeds a family, warning that short-term gains could leave the country worse off in the long term.
