Kenya plans to offload an undisclosed portion of its 34.9% stake in Safaricom, the region’s most profitable company, as part of a privatisation push to raise $1.1 billion (KES149 billion) to plug a hole in public finances and avoid imposing new taxes amid a tough economy.
The planned transaction, expected before the end of the 2025/26 fiscal year, would mark the government’s biggest divestiture in nearly two decades and a reversal of its previous reluctance to part with shares in the telecom giant. The sale could open doors to Africa-focused institutional investors or private equity funds, many actively scouting African telecoms assets for their stable cash flows and strong margins.
“There is talk that if we could offload more of our ownership of Safaricom, where we are likely to get the Sh149 billion through privatisation in the 2025/26 financial year,” John Mbadi, Treasury Cabinet Secretary, told Business Daily.
Safaricom, whose growth in recent years relied on its dominant mobile money platform M-Pesa and data services, posted an 11% rise in net profit to $540 million (KES 69.8 billion) in 2024, including returns from its Ethiopia subsidiary. It declared a total dividend of $0.009 (KES1.20) per share, delivering $130.5 million (KES16.8 billion) in earnings to the Kenyan government.
Kenya last sold a 25% stake in Safaricom during its heavily oversubscribed 2008 IPO, raising $400.5 million (KES51.75 billion). The current stake is valued at $2.1 billion (KES280.5 billion) at the prevailing share price of $0.15 (KES19.9). While the Treasury has not revealed how to offload the stake, it could opt for a secondary public offering or an off-market block sale to private investors.
Privatisation has long stalled in Kenya due to political meddling and bureaucratic inefficiencies. Since 2013, the Treasury’s attempts to divest from parastatals, including hotels, sugar companies, and airlines, have faltered, as losses and debts plague many of the firms targeted due to decades of mismanagement.
With fewer financing options, rising debt repayments squeezing the budget, and a possible taxation revolt from Kenyans, the government has limited choices.
The urgency behind the Safaricom stake sale is rooted in the country’s mounting debt costs. In the first eight months of the 2015/2016 financial year, Kenya spent $5.5 billion (KES 722 billion) on interest payments alone—more than half of the $10.8 billion (KES 1.4 trillion) it raised in tax revenue over the same period.
Domestic debt was the biggest drain, consuming $4.3 billion (KES 565.8 billion), while $1.2 billion (KES 156.5 billion) went to external creditors. Currently, interest costs are on track to exceed $7.7 billion (KES 1 trillion) by year-end—a huge figure highlighting how much room debt repayments are taking up in the national budget.
Kenya’s total public debt now stands at $88.5 billion (KES 11.4 trillion), up from $67.3 billion (KES 8.7 trillion) when President William Ruto took office less than three years ago. The rapid growth—$20.8 billion (KES 2.7 trillion) in under 36 months—has left the Treasury with few painless options.
With tax revenues underperforming and little political appetite for more tax hikes, selling stakes in profitable state assets like Safaricom is now a fiscal necessity.
