Safaricom sale: Let State show its hand

Safaricom  headquaters, Nairobi.[FILE,Standard]

The proposed sale of 15 per cent of the government’s shares in telecom giant Safaricom has sparked a heated and emotional national debate.

Add politics of 2027, and it gets murkier. Let’s try to go through the fog of misinformation, pseudo-facts and truths to unveil a sale that could be a pace setter in privatisation and government disinvestment.  

One, the government needs money, and selling its stake in Safaricom makes economic sense.

Have we not said no to more taxes and debt? Leading Kenyans is not easy! When in need, you sell the cow that is easiest to sell, the healthiest or fattest one. Safricom is such a cow with its market dominance and innovations. 

Some will ask: “Why not sell the loss-making firms?”  Someone noted: “They could be run down to make them easy picks.”  

We should fatten them before selling. That is where the government’s managerial acumen and turnaround skills are needed.  Did I hear there is a plan to fatten these economic cows before selling them?  

What of the share price? Safaricom prices are always controversial. Remember the Initial Public Offering (IPO) price of Sh5?

Many argued the price should have been Sh100. It has not got there after two decades. The shares were too many to reach that value.  

History is repeating itself, with a price of over Sh70 being mentioned. Where are we getting that price from? Safaricom is listed, and the price reflects all the available information.

We must add that our capital markets are efficient. 

Some argue we should wait for the price to go up. A good argument, but are we sure it will go up? A bird at hand is worth two in the bush. 

Think of it: the telco market has matured. Competitors like Starlink could nibble into Safaricom’s key market data.

Could the Ethiopian market keep Safaricom’s growth on an upward trajectory?  Will Safaricom get another earthshaking innovation like M-Pesa? 

From a purely investment point of view, it makes economic sense to sell that stake now; the future is uncertain.

Would the price be higher? Maybe we could auction the stake to the highest bidder, with a reserve price.

Don’t we auction spectrum and other assets? Does Vodacom/Vodafone have pre-emptive rights on the sale of Safaricom? The Vodacom deal is too “friendly.” It’s like running a business with your in-laws. 

The sale is emotional. Kenyans widely own Safaricom; it’s our economic firstborn. If the sale goes through, South Africa-linked Vodacom will have a majority in Safaricom. 

Is that one source of emotions? Despite the stringent government conditions on a “new Safaricom” board composition and recruitment of CEO, many feel we shall soon lose control of our economic crown jewel.

After the transaction, the conditions could be easily relaxed or challenged in court.

Why can’t Kenya be given the first option to buy? Doesn’t charity start at home? What if Kenyans are willing to pay a premium? Are bonds by Kenya Breweries Ltd (KBL) or Safaricom, not oversubscribed later by up to 177 per cent? Pesa iko (money is available)! 

Some are boldly speculating the buyer’s target is not Safaricom; it’s M-Pesa. If you have lived in the West and used credit and debit cards, you appreciate why M-Pesa would be the target of anyone salivating for Safaricom. 

If you control M-Pesa, you will control Kenya’s financial system and adjoining political power.  

Others are more candid: South African firms have not traditionally done well in Kenya. Think of Castle, ShopRite, and Massmart.  

“New Safaricom?” Some even speculate the new majority owners could extract more value from Safaricom by spinning off M-Pesa into an independent firm.

Conspiracy theorists suggest killing M-Pesa would not lead to a flood of economic tears. Who shed crocodile tears? Speculation is a legitimate source of knowledge.  

More poignant in the proposed sale is the loss of trust between Kenya government and its citizens. It’s one of the fallouts from the Gen Z protests last year.

Kenyans are suspicious of any government decision, no matter how well-intended.

That is why we need all the information on this proposed sale.

Remember Mobitelea? We need more details on Vodacom shareholding. Do any Kenyans hold Vodacom shares, out of curiosity?  

The money, we are told, will be the seed fund for an infrastructure and sovereign wealth fund. Did you listen to  President William Ruto’s State of the Nation Address?

Many are not sure of that, more so when the government needs money to pay debt and provide other services.

They fear the money will go to recurrent expenditure. How about linking the proceeds of the Safaricom sale to a specific project like the Limuru-Mau Summit Road? Think of a plaque: “This superhighway was proudly sponsored by Safaricom.”  

Where do we go from here? Kenya’s dynamic financial sector is a goldmine. Noted, Nigerian laser focus on our banks? Who else has a foothold in our banking sector?  Now it’s telcos.

The sale of Safaricom is just a proposal, and it has a long way to go from Parliament’s approvals to public participation and shareholders’ involvement. 

Read the Privatisation Act, 2025, which commenced on November 4, 2025. The proposal gives us a glimpse into the forthcoming privatisation after the Act.  

Safaricom’s success will be a blueprint for other firms. It has been suggested that the government should divest from other firms and focus on its core mandate, governance, not business.

I would be happier if the hot debate on Safaricom were on how to tame corruption once and for all.  

We should also ask: why so much focus on a mature firm, should we not spend more time and energy on Small and Medium Enterprises (SMEs) and narture then to IPOs? 

Don’t we realise how lonely Safaricom is at the top? Should parents focus on children or adults?

Why focus on existing companies like Safaricom and not new ones? Was Safaricom driven by mobile phones? Which similar firm will emerge from quantum computing or Artificial Intelligence (AI)?  

Until we go through the whole process of selling off Safaricom, expect a heated debate on this transaction.

It will be peppered with politics, with an eye on the 2027 polls and beyond.