Kiharu MP Ndindi Nyoro has raised strong concerns over the government’s plan to sell its 15% stake in Safaricom, warning that the country risks undervaluing its most valuable asset.
In a detailed memorandum to the National Assembly, Nyoro challenged the valuation method, the urgency of the deal, and the decision-making process, calling for public participation, competitive bidding, and exploration of alternative options to ensure Kenyans get full value.
In the memorandum addressed to the Clerk of the National Assembly, Nyoro said the sale “should be subjected to thorough public participation and debate, given that it is the largest in both size and quantum that our country has handled since independence.”
He argued that only an open and robust discussion could guarantee value for money, urging the National Treasury to approach the transaction “with the demeanor of a seller” instead of justifying what he described as “an inferior transaction.”
Nyoro also questioned the identity of those involved in negotiating the sale, noting a lack of clarity on who officially represented the government. “It is apparent that some of the people who participated in the negotiations ostensibly representing the people of Kenya are not public officers or servants and are not officially contracted to act on behalf of the government,” he stated.
On valuation, Nyoro dismissed reliance on the stock market as “incorrect and naïve,” pointing out that Safaricom shares had reached Sh45 in 2021, before its Ethiopia expansion. “The correct valuation should be much more, given that the investment in Ethiopia is almost breaking even operationally,” he added, highlighting that profits are likely to rise once the venture contributes fully to the bottom line.
To support his argument, Nyoro cited other listed companies trading below their intrinsic value due to market trends.
He pointed to Kenya Power, valued at roughly Sh27 billion despite earning Sh24 billion in profit and owning assets worth over Sh400 billion, and KenGen, which has assets above Sh500 billion but a market valuation of about Sh60 billion. “This exposes the vagaries of the markets… and therefore cannot be the benchmark for valuation,” he said.
Nyoro further noted that block transactions often attract premiums, referencing past deals such as REA Vipingo and Bamburi Cement. He questioned why the Safaricom stake sale seemed to bypass competitive bidding, asking, “Was there a competitive process? Competitive bidding would definitely unlock value.”
He also cautioned against selling to existing dominant shareholders, warning that this could distort board decisions and reduce public influence.
As alternatives, Nyoro suggested demerging Safaricom into separate telecom, financial services, and tower businesses, listing the company on a global exchange like London, and then opening the sale to international bidders.
Finally, the MP demanded transparency on how dividends would be securitized, any borrowing plans linked to the sale, and the intended use of the proceeds. He urged the government to clearly specify the projects that would be funded through the transaction.
