Vodafone has acquired the Government of Kenya’s (GoK) 15 percent stake in Safaricom for KSh 244.5 billion, reshaping the shareholding structure of East Africa’s most profitable company and injecting substantial capital into Kenya’s long-term development plans.
Under the new structure, Vodafone now commands a 55 percent majority stake, while the Government retains 20 percent and the public, through the Nairobi Securities Exchange (NSE), holds 25 percent.
While the sale sparked immediate public debate—especially given Safaricom’s status as a national corporate icon—analysts and government officials insist the transaction is not only sound but also strategically aligned to Kenya’s urgent fiscal and development needs.
A Premium Deal That Strengthens Kenya’s Fiscal Position
The KSh 244.5 billion payout represents a premium purchase, with Vodafone buying the shares at KSh 34 apiece—23.6 percent above Safaricom’s six-month volume weighted average price. For the Treasury, this premium signals strong investor confidence in Kenya’s telecom and fintech future.
Since Safaricom’s inception, the Government has already made more than KSh 540 billion in dividend earnings. Offloading 15 percent of its stake allows GoK to unlock immediate capital without increasing taxes or accumulating new debt—a crucial consideration in an economy navigating global shocks, tightening fiscal space, and rising development demands.
“This is a shareholder-level adjustment, not an operational takeover,” Treasury Cabinet Secretary Mbai emphasized. “Government retains a strategic 20 percent stake, ongoing dividend rights, and influence in governance. National interests remain firmly protected.”
Vodafone’s Added Value Beyond Capital
Beyond the financial premium, the transaction is expected to deepen Safaricom’s capacity to compete globally. Vodafone brings extensive experience in telecom innovation, regional market integration, and digital infrastructure—strengths that analysts say will position Safaricom for its next phase of growth in mobile money, 5G, enterprise solutions, and future technologies.
With Vodafone now the clear majority shareholder, Safaricom gains an anchor investor capable of mobilizing capital, transferring knowledge, and accelerating the company’s expansion strategy. “It is not just money,” a senior official noted. “It is strategic value—deep expertise, stability, and global competitiveness.”
Importantly, Safaricom’s management and Board retain control of day-to-day operations, with no changes to the company’s governance structure.
Proceeds Ring-Fenced for the Sovereign Wealth Fund and Infrastructure Fund
Perhaps the most consequential element of the deal is what the Government plans to do with the money.
Unlike previous privatisation proceeds—which Presidents, economists, and auditors say were often absorbed into recurrent expenditure—the KSh 244.5 billion will be ring-fenced and invested through the National Infrastructure Fund and the Sovereign Wealth Fund.
In his recent State of the Nation Address, President William Ruto underscored why this shift is historic.
“For decades, Kenya has privatised major public assets—from Kenya Airways and KenGen, to Kenya Re and Safaricom. Yet we cannot point to enduring national assets built from privatisation proceeds, because the funds were absorbed into budgets and spent,” he said.
He stressed that the new funds will be protected, preserved, and reinvested into wealth-creating assets. “For every shilling invested from privatisation proceeds, we aim to attract ten shillings from long-term investors—pension funds, sovereign partners, private equity, and development finance institutions.”
Additionally, Vodafone Kenya will make an upfront dividend compensation payment to the Government instead of future dividends on the remaining 20 percent shareholding. This provides short-term fiscal relief while safeguarding long-term returns.
Why Not Sell to Kenyans?
The Government clarified that selling locally was considered but not viable for three reasons:
Vodafone’s premium offer made it the most financially prudent option.
Kenyans are already represented, collectively holding 45 percent through GoK and public investors, almost matching Vodafone’s 55 percent.
Strategic value outweighed sentiment, with Vodafone offering technology leadership and global capability.
Safeguarding National Security and Strategic Assets
Despite concerns from some quarters, officials emphasized that critical infrastructure—including M-Pesa operations, emergency communication networks, and national data systems—remains under existing contractual safeguards. Government influence through its 20 percent stake ensures continued oversight on strategic matters and preservation of national heritage.
“This is not a loss of control,” CS Mbai reiterated. “It is a strategic rebalancing that protects Kenya’s interests while delivering maximum value.”
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