Treasury Cabinet Secretary John Mbadi has defended the government’s decision to forfeit future Safaricom dividends worth Sh15.5 billion in exchange for an upfront payment of Sh40.2 billion from Vodacom Group, describing it as a calculated and strategic choice.
He emphasized that the move allows the state to secure immediate revenue while accounting for the uncertainties of long-term dividend earnings.
Speaking on Friday, Mbadi urged critics to look beyond the headline figures and consider the timing of revenue. “The evaluation looked at all these factors. Don’t just look at it as a discount on the money, but also on the time we will get this revenue. The advantage is that we are getting money in advance, and there is value in that,” he said.
He highlighted that the government’s sale of a 15 per cent stake in Safaricom to Vodacom involves transferring the rights to future dividends amounting to Sh55.7 billion. While the move effectively offers Vodacom a 27.8 per cent discount on those future dividends, Mbadi insisted the transaction was properly valued.
Only Vodacom disclosed the discount to its shareholders through the Johannesburg Stock Exchange (JSE).
“Vodafone Kenya has agreed to buy the right to receive future Safaricom dividends amounting to Sh55.7 billion (7.4 billion rands), that would have accrued to the government of Kenya on its remaining shares in Safaricom for an upfront payment of Sh40.2 billion (5.3 billion rands),” said Safaricom’s parent company.
Mbadi explained that relying on projected future dividends assumes Safaricom will maintain its current profitability, which is not guaranteed.
“If you are getting money in advance, you must also forego a few things… the markets are dynamic; the dividend is not guaranteed,” he said. He described the deal as a strategic move to lock in guaranteed funds while mitigating future risks.
The CS also reassured that public participation will take place and he will defend the decision in Parliament. He stressed that the government considered both financial and market factors in approving the sale.
The transaction, expected to be completed in the first quarter of 2026, will reduce the state’s stake in Safaricom from 35 per cent to 20 per cent. At the same time, Vodacom is purchasing a five per cent stake held by UK-based Vodafone Group at the same price of Sh34 per share.
After both deals, Vodacom’s ownership will rise to 55 per cent, giving it majority control of the country’s largest telecom, with a total investment of Sh272.4 billion, including Sh68.1 billion for the Vodafone stake.
Mbadi concluded that the upfront cash inflow provides certainty for the Treasury, offering flexibility for funding other government priorities while avoiding dependence on uncertain future dividends.
