Kenya’s announcement on 4 December 2025 that it would sell a 15% stake in Safaricom PLC to South Africa’s Vodacom Group for KSh 204.3 billion at KSh 34 per share has detonated one of the fiercest political and financial debates of the year.
With the Treasury bundling in an extra KSh 40.2 billion for upfront rights to future dividends on its remaining 20% shareholding, the state’s total take rises to KSh 244.5 billion, earmarked for roads, irrigation, and airport upgrades.
Treasury CS John Mbadi calls it fiscal innovation: unlocking capital for infrastructure “without raising taxes or borrowing.”
Yet critics from Parliament to social media argue the government has effectively sold off the crown jewel of Kenya’s digital economy at a steep discount, potentially short-changing taxpayers by KSh 66 billion or more.
With public participation hearings now underway until 8 January 2026, the stakes are as high as they are political.
The Deal: A Direct Sale That Raises Fast Cash but Also Red Flags
Safaricom is not an ordinary state asset. It is Africa’s most profitable telecom, delivering KSh 18–20 billion in annual dividends to the state and paying KSh 46 billion in taxes in FY 2024/25 alone.
Since the 2008 IPO, the government has maintained a 35% shareholding; this sale drops it to 20%, with two board seats preserved, while Vodacom climbs from 40% to a controlling 55%. The public float remains at 25%.
The process, a negotiated, one-to-one sale enabled by the new Privatisation Act 2025, skipped competitive bidding in favour of speed, a decision critics say leaves billions on the table.
Mbadi insists KSh 34 reflects a 23% premium over the six-month average. Shares briefly rallied to KSh 29.25 on the news. Yet the implied KSh 1.36 trillion valuation is far below Safaricom’s KSh 1.8 trillion peak in 2021, when shares traded at KSh 45.
That discrepancy drives the allegation that Kenya is effectively staging a fire sale.
The Valuation Fault Line: What KSh 34 Really Means
Analysts point out that Safaricom’s fundamentals, including M-Pesa’s dominance (handling transactions equivalent to 50% of Kenya’s GDP), Ethiopia’s early momentum, and steady double-digit revenue growth, could justify a valuation nearer KSh 40–50 per share.
At KSh 34, the government receives KSh 204.3 billion for its 15% stake. At KSh 45? It would have fetched KSh 270.4 billion.
The potential shortfall of KSh 66.1 billion is now the epicentre of the dispute. Opposition MPs call it a “24% haircut,” and some argue the total loss, once adjusted for underpriced dividend rights, could breach KSh 80 billion.
The Numbers Behind the Criticism
| Valuation Metric | Current Deal (KSh 34/share) | “Fair Value” Estimate (KSh 45/share) | Potential Shortfall for 15% Stake |
|---|---|---|---|
| Total Shares Sold | 6,009,814,200 | 6,009,814,200 | – |
| Proceeds from Shares | KSh 204.3 billion | KSh 270.4 billion | KSh 66.1 billion |
| Implied Full Market Cap | KSh 1.36 trillion | KSh 1.8 trillion | KSh 440 billion (full company) |
| Plus Dividend Rights | + KSh 40.2 billion | N/A | Adjusted shortfall: ~KSh 80B |
Economist-MP Ndindi Nyoro, a leading critic, brands the sale a “raw deal,” arguing that the premium provided by Treasury masks a valuation suited to a depressed market rather than underlying strength.
Why Undervaluation Fears Won’t Go Away
The arguments converge on three fronts. First, market lows are not a fair benchmark for a strategic asset whose value lies in nationwide infrastructure, a pan-African footprint, and a near-monopolistic payments platform.
Second, direct negotiation shuts out competitive bidding that could have driven the price higher, especially from local pension funds, SACCOs, or retail investors historically eager for Safaricom shares.
Third, dividend rights, one of the state’s most reliable fiscal buffers, are being partially foregone upfront, reducing long-term inflows at a time when debt servicing already consumes 40% of revenue.
On X, the backlash is intense. “Something is fishy… why the undervaluation?” one user wrote. Others accuse Treasury of “selling public assets at throwaway prices,” comparing the move to previous privatisation controversies.
READ ALSO:What Exactly Happens in Kenya’s “Direct Negotiated Sale” of Safaricom?
The Political Storm: Courts, Parliament, and a Nation on Edge
Opposition leaders have escalated the fight. Kalonzo Musyoka has mobilised over 100 lawyers for a constitutional challenge, arguing the process lacked early public participation.
Rigathi Gachagua accuses the state of “selling the country piece by piece.” Kenya’s historical scars remember the shadowy Mobitelea Ventures with its unexplained early Safaricom stake, adding fuel to suspicion.
Even centrist economists raise long-term alarms. Safaricom dividends cushion the budget; losing part of this stream weakens fiscal resilience.
Others warn that majority foreign control could tilt Safaricom’s strategy toward regional expansion rather than domestic innovation or job creation.
Mbadi counters that the deal preserves strategic safeguards: board representation, regulatory oversight, and no layoffs for three years while unlocking capital Kenya urgently needs. But that argument is running into a wall of scepticism.
The Bigger Picture: Debt, Sovereignty and the Price of Urgency
Kenya’s debt stands at KSh 10.5 trillion. The Treasury insists privatisation is the only way to plug the KSh 901 billion financing gap without raising taxes.
Yet opponents argue that selling high-performing assets below fair value only deepens long-term vulnerability.
Many see the deal as part of a wider pattern under “Project Marble,” the government’s privatisation pipeline seeking KSh 149 billion this fiscal year but now surpassing that target through a single controversial transaction.
With 1% of Kenyans controlling 78% of national wealth, critics fear this sale reinforces concentration rather than broadening ownership.
Verdict: A Sale That Demands a Second Look
As the public hearings begin, the central question is not whether Kenya should sell Safaricom but whether it should sell it this cheaply.
The evidence suggests taxpayers may be losing out on KSh 66–80 billion, potentially more when future dividends are discounted.
Safaricom is the backbone of Kenya’s digital economy, not just a balance-sheet line item. If a sale is inevitable, Kenyans deserve full transparency, competitive bidding, and a valuation worthy of a national asset, not a hurried discount dressed up as fiscal prudence.
Parliament has until January 8 to decide. For a deal of this magnitude, time may be short, but public scrutiny has only just begun.
Safaricom Shares Overview
The Safaricom share price continues to influence investor interest as more Kenyans explore Safaricom shares and learn How to buy Safaricom shares, including asking How much is 100 shares of Safaricom in today’s market?
Ongoing discussions around the Safaricom stake sale privatisation Kenya has revived memories of the historic Safaricom IPO, while the role of Government Safaricom shares remains central to debates on ownership, market stability, and future reforms.
Ronnie Paul is a seasoned writer and analyst with a prolific portfolio of over 1,000 published articles, specialising in fintech, cryptocurrency, climate change, and digital finance at Africa Digest News.
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