Kenyan Government to Sell Safaricom Stake as Part of KES 149 Billion Privatisation Push

The Business Daily reports that the Kenyan government is planning to sell a significant portion of its 34.9% stake in Safaricom, the country’s largest and most profitable telco, in a move aimed at raising the bulk of a targeted KES 149 billion from the ongoing privatisation of State-owned enterprises.

According to Treasury Cabinet Secretary John Mbadi, offloading part of the government’s stake in Safaricom could be the “big-ticket item” that helps Kenya meet its ambitious revenue targets before the close of the 2025/26 financial year. The move comes as the State seeks alternative funding sources, having pledged not to introduce new taxes in the current fiscal plan.

“There is talk that if we could offload more of our ownership of Safaricom, we are likely to get the KES 149 billion through privatisation,” Mbadi says.

Safaricom’s Financial Performance and Strategic Value

Safaricom recently posted a strong performance for its FY25 results, with revenues and profits climbing across key segments. The only notable drag came from its Ethiopian operation, attributed largely to hyperinflation and the steep depreciation of the Ethiopian Birr. Still, the company remains a financial powerhouse in the region.

At the centre of its profitability remains M-PESA, widely regarded as Safaricom’s crown jewel. The mobile money platform continues to dominate the digital payments space, contributing a significant portion of the firm’s revenues. Financial products like Fuliza, a short-term overdraft service, have particularly stood out, generating billions in interest and usage fees. Despite economic challenges, Safaricom’s financial products continue to be resilient sources of revenue.

Yet M-PESA’s success has also constantly ignited debates over whether to split M-PESA from Safaricom. Policy makers and politicians have raised concerns about market dominance and whether separating the financial service arm could foster competition in both the telco and fintech sectors. No formal decisions have been made, but discussions continue to gain traction.

Selling the Family Silver?

The government’s 34.9% stake in Safaricom is currently valued at around KES 280.5 billion, with the planned sale expected to be either through a secondary IPO or a targeted auction to high-net-worth investors. The last time the State offloaded shares in the telco, during its 2008 IPO, the sale was oversubscribed by 532%, raising KES 51.75 billion.

But while the Treasury views the planned sale as a viable fiscal tool, critics argue it reflects deeper issues within Kenya’s public finance management. The government has consistently faced criticism for rising recurrent expenditure, particularly on salaries, loan repayments, and persistent reports of corruption. Detractors question whether selling off a lucrative asset like Safaricom is a sustainable solution – or just a short-term fix to plug budget holes.

Barriers to Entry and Market Dynamics

Safaricom’s dominant market position has long been protected by high entry barriers for new telcos, largely due to stringent licensing requirements set by the Communications Authority of Kenya (CA). These include hefty license fees, and strict coverage obligations that make entry financially prohibitive for smaller or foreign competitors.

As a result, Safaricom has remained relatively unchallenged at the top, commanding the lion’s share of mobile subscriptions, data traffic, and mobile money transactions. This makes the State’s remaining shares in the company particularly attractive to investors looking for predictable returns and steady cash flows.

Looking Ahead

Whether the sale will achieve its intended fiscal goals remains to be seen. What’s clear is that the government is betting big on one of its most valuable assets – at a time when broader questions are being asked about its spending priorities, public debt management, and the future of the country’s digital economy.

If the sale proceeds as planned before June 2026, it will likely be the region’s biggest telecoms stake transaction in years and a litmus test for Kenya’s privatisation roadmap.