To sell or not to sell? Ruto pushes ahead with public asset sales

Cabinet Secretary for the National Treasury and Economic Planning John Mbadi.[FILE,Standard]

The planned partial sale of the state’s stake in Safaricom has kicked up a storm on the government’s ambitious but controversial plan to sell what many Kenyans consider as strategic national assets.

Critics have sounded the alarm, arguing that transferring the 15 per cent stake to Vodacom, the South African telco owned by Vodafone, would severely compromise national sovereignty over critical digital infrastructure, data protection and the national payment system.

The controversy also resurrects memories of the shadowy Mobitelea deal, which once controversially held a five per cent stake in the telco.

Observers note that the government’s sale of its Safaricom stake is part of a wave of concurrent transactions, including the planned privatization of the Kenya Pipeline Company by March 2026 and the NSSF’s sale of its stake in East African Portland Cement (EAPC).

Several other government entities are slated for privatisation, signaling a broader, high-stakes shift in state ownership.

The government expects to raise Sh244.5 billion by selling its 15 per cent stake in Safaricom to Vodacom, which will in addition acquire a five per cent stake indirectly held by Vodafone Kenya, increasing the telco’s ownership to a controlling 55 per cent and diluting the government’s share holding to 20 per cent

The sale of Safaricom stake is part of government’s broader privatisation plan, with other state owned entities slated for sale in the short term including KPC, another firm that analysts argue is of strategic importance and called for disposal of other less strategic but also non-profitable entities. 

President William Ruto is charging ahead with his privatization agenda, undeterred by concerns that privatizing key assets trades long-term stability for short-term revenue.

He said that the sale of such assets is critical to the country’s plan to set up the much hyped National Infrastructure Fund (NIF) and that the proceeds would be used as seed capital for the Fund.

This is then expected to draw private sector money that will then be used for infrastructure building. This, he said, will partly cure the country’s need to borrow and refrain from hiking taxes to raise funds for development spending.

Without room to borrow and Kenyans resisting tax hikes, Ruto sold the Fund as the only alternative Kenya has for an economic take off, with the next option being “inaction”. 

“Choosing inaction would condemn our nation to stagnation,” he said, adding that leveraging on mature national assets and tapping into PPPs was an innovative alternative financing mechanism that would steer forward “this national development imperative”.

This would enable him to raise Sh5 trillion in infrastructure over 10 years that will then be used to dual key roads, extend the Standard Gauge Railway to Malaba and build dams.

Bad deal

In putting the proceeds of privatization in the infrastructure fund, Ruto said this would break a cycle where money received from sale of government assets has not had a major impact but instead been absorbed in budgets. Kenya has in the past raked in billions from partial sale of Kenya Airways, KenGen, Kenya Re and Safaricom.

This, he noted, ended up “paying salaries and debts, leaving no enduring national assets behind”.

“Our goal is simple: for every shilling in the NIF, we will attract ten more shillings from long-term investors, including pension funds, sovereign partners, private equity funds and development finance institutions, allowing us to develop without the constraints that come with debt and taxation,” the President said.

While analysts and politicians say the issues that the president has been raising are valid, they note the approach could be wanting.

Kiharu MP Ndindi Nyoro cautioned about NIF, noting that it would present more challenges than opportunities, including rushed sale of state entities at below market values while resting key projects in private hands for decades.

“There is a new jargon in town called infrastructure fund,” he said, “Infrastructure fund means two things, it is either sale of government assets at a discount and more borrowing.”

On the sale of Safaricom shares to Vodacom, Deepak Dave of Riverside Advisory criticised the sale, stating it gives Vodacom full control for potential lucrative spin-offs (like M-Pesa) and that the GoK is getting a valuation that ‘barely closes any deficit gaps this year’ while losing future value.

“It’s a bad deal for the Government of Kenya. They’re getting an amount that barely closes any deficit gaps this year and closes off very lucrative future valuation uplifts from spin-offs or other initiatives,” he said.

Stephen Mutoro, secretary general Consumers Federation of Kenya (Cofek), said if the state has to cede a stake in Safaricom, it should be to Kenyans even as he noted the regulatory complexities that would come with increasing Vodacom’s stake.

“If the State must exit, the only fair and constitutional route is broad public ownership, not handpicking a foreign giant. Kenya deserves markets, not monopolies,” he said.

It is not just the sale of the Safaricom stake that has roused Kenyans but also the planned sale of other State Owned Entities that many have argued are of a strategic nature. KPC is also up for sale through an Initial Public Offer (IPO). The government expects to raise Sh100 billion through the sale of 65 per cent stake. A proportion of the proceeds from this sale will also go into the NIF. 

Ken Gichinga, Chief Economist at Mentoria Economics, noted that entities such as KPC and Safaricom remained strategic and should remain in government hands.

Instead, he said, the government should consider disposal of entities that would benefit from injection of private capital as well as expertise and efficiencies. Safaricom and KPC are unlike numerous other state firms that have for years survived on bailouts.

Strategic sectors

“The state ought to prioritise the privatisation of loss making entities that have been dependent on bailouts,” he said.

Gichinga added that in other markets, including developed countries, governments still retained ownership of critical areas such as monetary and energy infrastructure as they are important aspects of sovereignty.

“Countries that are sovereign maintain independence in four key areas: monetary, military, energy, and food. They usually safeguard these, even when transferring other sectors to the private sector,” he said.

Seeing its critical nature, MPs made an attempt to prevent a select group of investors from dominating the share sale and also insisted that the government retain at least a 35 per cent stake.

MPs directed the Privatisation Commission to “safeguard against excessive concentration of shares in a single entity or related parties” and to “set a maximum ownership limit for any one shareholder to help preserve broad-based ownership, promote market competitiveness and protect national and energy security interests.”

Safaricom’s M-Pesa platform functions as essential to Kenya’s national payments system, processing over 100 million daily transactions. 

Data corruption

The National Treasury has previously classified it as a potential systemic risk to Kenya’s economy. In the budget documents for the 2020/21 financial year, Treasury noted the surge in the number of mobile, internet and mobile money subscriptions, which has led to improved access to efficient financial services. 

“Owing to the success of mobile money, various financial products have been leveraged on this payment channel increasing the inter linkages between this technology and the banking sector,” said Treasury, explaining the Government is also using the technology to provide services and receive payments online using products such as the IFMIS, i-Tax, e-procurement, Huduma centres and e- citizen. 

According to the latest data from the Communications Authority of Kenya (CA) for the quarter ending September 2025, M-Pesa holds an 89.7 per cent mobile money market share.

“M-Pesa is an integral part of Kenya’s monetary systems. Ceding control places immense sovereign power in private foreign hands and could be unconstitutional,” said economist Ken Gichinga.

Treasury CS John Mbadi emphasised that the government should not be in business or rely on dividends from state-owned entities. Instead, it should create a conducive environment for businesses to thrive, which in turn would boost tax revenues.

“The government is not in the business of doing business. It should facilitate enterprises, generate taxes and implement projects. We need an economy where the private sector invests, makes profits and those profits yield taxes,” he said.

Mbadi added that the government still holds a strategic stake in Safaricom. However, concerns have arisen over the valuation of the shares, which critics argue does not reflect Safaricom’s growth potential, particularly in Ethiopia and its expanding fintech ecosystem, where M-Pesa revenue grew 14 per cent in the last six months. The sale price of Sh34 a share, although a premium on the current NSE price of Sh28, is undervalued compared to the Sh45 peak in 2021.

Wiper leader Kalonzo Musyoka termed the price a “throwaway,” saying: “An institution like Safaricom is being sold cheaply to themselves. This should be an inheritance for the next generation. They want to sell JKIA, KPC, all of them… we have to take a stand.”

An independent Deloitte audit deemed the valuation fair to all shareholders, including minorities. Vodacom had requested this review as required by the Johannesburg Stock Exchange. Treasury is yet to seek its own review, but Mbadi said the process is still in early stages.

Kiharu MP Ndindi Nyoro also criticized the valuation and suggested the government should open the sale to other telcos, inviting competitive bidding to ensure the highest price.

He warned Kenyans to monitor concurrent transactions closely, cautioning that many could escape scrutiny, risking transparency.

“We must be vigilant; otherwise, everything will be sold off, leaving no fallback position… this is a slippery path for our country,” he said.

Ndindi also flagged the sale of NSSF’s 27 per cent stake in EAPC. Kalahari Cement, a Kenyan subsidiary of Tanzania’s Amsons Group, recently acquired the shares, having earlier bought a 29 per cent Holcim stake. MPs questioned the low price of Sh27.30 per share, compared to Sh53 prevailing, which later rose to Sh93 on speculation. The National Assembly’s Departmental Committee recommended that EAPC buy back shares and offer them to the public, but the transaction had already been completed on December 8.

Nyoro criticised the process, asking why a Tanzanian firm could see value in EAPC when NSSF, investing workers’ resources, did not. The Committee noted cement’s strategic importance for Kenya’s infrastructure and housing agenda. “Cement and associated limestone deposits are a strategic sector with direct implications for national development, housing and industrial growth,” the report stated.

MP Caroli Omondi argued that broader Kenyans’ participation in state-owned assets like Safaricom could help reduce inequality.