The National Treasury has initiated the process of selling a 15 per cent stake in Safaricom PLC to the Vodacom Group in a transaction aimed at raising funds for development financing amid tightening fiscal conditions.
Appearing before a joint committee of the National Assembly, Cabinet Secretary for the National Treasury John Mbadi said the proposed partial divestiture is expected to generate about Sh204.3 billion from the share sale.
The total proceeds are projected at Sh244.5 billion when an upfront dividend monetisation component is included.
Under the proposal, the government plans to sell 6,009,814,200 Safaricom shares at a price of Sh34 per share.
The price represents a 23.6 per cent premium over the six-month volume weighted average price as at December 2025.
Once the transaction is completed, the State’s shareholding in Safaricom will reduce to 20 per cent, while Vodacom Group’s stake will rise to 55 per cent, consolidating ownership from both the government and Vodafone.
Mbadi, who was accompanied by Principal Secretary Chris Kiptoo, told lawmakers the proceeds would be used as seed capital for the proposed National Infrastructure Fund and the Sovereign Wealth Fund.
“The proposed partial divestiture is expected to generate approximately Sh204.3 billion, with total proceeds projected at Sh244.5 billion when an upfront dividend monetisation component is included,” he said.
The Treasury said the move reflects a shift towards alternative financing mechanisms as public resources come under pressure.
Mbadi noted that private sector participation would play a bigger role in financing development projects as the government seeks to reduce reliance on borrowing and taxation.
“Private sector participation will play an increasing role in meeting the country’s development needs as public resources come under pressure,” he said.
According to the Treasury, funds raised from the transaction will be channelled to priority sectors including energy, roads, water, airports and digital infrastructure.
Mbadi said safeguards had been built into the transaction to protect public interest, including the State retaining two board seats at Safaricom, commitments on employment stability for a defined period, requirements on board leadership and continued support for the Safaricom Foundation.
On the legal framework, Mbadi said the transaction is being undertaken in line with the Privatization Act, 2025 and Section 87A of the Public Finance Management Act, which requires parliamentary consideration within 28 sitting days.
“The scale of the transaction reflects confidence in Kenya’s capital markets and the ability of the Nairobi Securities Exchange to accommodate large transactions,” he said.
He added that the proposal remains subject to approvals by the Capital Markets Authority, the Central Bank of Kenya and the Competition Authority of Kenya, and aligns with broader reforms aimed at separating the government’s policy and regulatory role from commercial activity.
