Kenya is preparing to offload an undisclosed portion of its 34.9% stake in Safaricom—the region’s most profitable company—in a renewed privatisation effort aimed at raising $1.1 billion (Ksh.149 billion). The move is designed to plug a widening hole in public finances and ease pressure to introduce new taxes amid tough economic conditions.
The transaction, expected before the end of the 2025/26 financial year, would represent Kenya’s largest state divestiture in nearly two decades. It also marks a shift in government policy after years of reluctance to sell its holding in the telecoms giant.
The sale is expected to attract interest from Africa-focused institutional investors and private equity funds drawn by the telecom sector’s stable cash flows and healthy profit margins.
“There is talk that if we can offload more of our ownership in Safaricom, we could raise the Ksh.149 billion needed through privatisation in the 2025/26 financial year,” said Treasury Cabinet Secretary John Mbadi in an interview with Business Daily.
Safaricom has seen sustained growth, driven by its dominance in mobile money through M-Pesa and expanding data services.
In 2024, the company reported an 11% rise in net profit to $540 million (Ksh.69.8 billion), boosted by returns from its Ethiopia subsidiary. It declared a dividend of $0.009 (Ksh.1.20) per share, earning the government Ksh.16.8 billion in payouts.
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Kenya last sold part of its Safaricom stake during the 2008 initial public offering, which saw a 25% share floated and raised $400.5 million (Ksh.51.75 billion) in a heavily oversubscribed offering.
Today, the government’s remaining stake is valued at approximately $2.1 billion (Ksh.280.5 billion), based on a current share price of $0.15 (Ksh.19.9). While the Treasury hasn’t confirmed how the stake will be offloaded, options on the table include a secondary public offering or a private block sale.
Privatisation efforts in Kenya have struggled for years, hampered by political interference and slow bureaucratic processes.
Since 2013, the government has attempted to divest from various state-owned enterprises—including hotels, sugar mills, and airlines—but many of these efforts have stalled due to mismanagement, mounting losses, and legacy debts.
The renewed urgency behind the Safaricom stake sale stems from Kenya’s rising debt burden and shrinking fiscal space.
In the first eight months of the 2024/25 financial year, the country spent $5.5 billion (Ksh.722 billion) on interest payments—over half of the Ksh.1.4 trillion ($10.8 billion) it raised in tax revenues during the same period.
Domestic debt accounted for the bulk of these costs, absorbing $4.3 billion (Ksh.565.8 billion), while $1.2 billion (Ksh.156.5 billion) went to external lenders.
Projections indicate that interest payments could surpass $7.7 billion (Ksh.1 trillion) by year-end, underlining the growing pressure debt repayments are placing on the national budget.
Kenya’s total public debt has now reached $88.5 billion (Ksh.11.4 trillion), up from $67.3 billion (Ksh.8.7 trillion) when President William Ruto took office less than three years ago.
The Ksh.2.7 trillion increase in under 36 months has left the Treasury with limited and increasingly difficult choices.
With tax collections underperforming and public resistance to new tax hikes growing, the government now sees selling stakes in high-performing state assets like Safaricom as a necessary step to stabilise the country’s finances.
