Kenya to Sell Part of Its 35% Stake in Safaricom to Raise Part of $1.16bn

Kenya is planning to sell part of its 35% stake in Safaricom, the country’s biggest telecom company, to raise part of the $1.16bn it needs in the 2025/26 financial year. This is part of a bigger plan by the government to sell shares in several state-owned companies to get more money without raising taxes.

Right now, the government owns 35% of Safaricom. It first sold some shares to the public back in 2008, and now it wants to sell even more. The main reason for this is that Kenya is paying a lot of money just to cover its debt. From July 2023 to February 2024, the government spent about $5.5 billion on interest payments alone. That’s more than half of all the taxes collected during that time. Experts say these payments could go over $7.7 billion by the end of the year, which leaves less money for other important things. So, the government needs to find new ways to raise cash, and selling part of its stake in Safaricom is one way to do that.

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Safaricom is a strong company and many investors want to buy its shares. It has millions of customers and is famous for its mobile money service, M-PESA, which many people in Kenya use every day. In 2024, Safaricom made $540 million in profits, which was 11% more than the year before. The government earned about $130 million from dividends because of its current shares.

By selling part of its 35% stake in Safaricom, Kenya hopes to get a good chunk of the $1.16 billion it needs. The government might sell between 5% and 10% of its shares, which could bring in tens of billions of Kenyan shillings depending on the price of the shares when they sell. This sale could be open to the public or to big investors who want to put money into Kenya’s telecom sector.

Selling some of its shares could also be good for Safaricom. With less government ownership, more private investors might come in. This could help the company become even better and more innovative. But it might also change how Safaricom is run and how it works with other businesses in Kenya.

This plan to sell part of the government’s stake in Safaricom is the biggest move like this in almost 20 years. It shows how serious the government is about dealing with its money problems. In the past, selling shares in other state companies has been hard because of political and management issues, but Safaricom is different because it is so successful.

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Many people in Kenya and across Africa will be watching closely to see what happens. Safaricom is very important for Kenya’s digital world, and changes in its ownership could affect the whole tech and telecom industry.

Kenya selling part of its 35% stake in Safaricom is a smart way to raise part of the $1.16bn it needs to handle its debt. It could also bring in new investors and help the company grow even more in the future.

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