Kenya Targets KES 149 Billion in Historic Safaricom Share Sale
Kenya is preparing for what could become East Africa’s largest corporate privatization deal. The government aims to sell a significant portion of its 34.9% stake in Safaricom, East Africa’s most valuable telecom operator, to raise KES 149 billion (approximately $1.1 billion) before June 2026.
At the current market price of KES 19.90 per share, selling even 5% to 10% of its shares would net the government KES 39.8 billion to KES 79.7 billion. Yet, experts argue that Safaricom stock is undervalued, which poses both a challenge and an opportunity.
A Strategic Fiscal Move Amid Tax Constraints
With no new taxes introduced in the latest Finance Bill, the sale of Safaricom shares has become central to Kenya’s revenue-generation strategy. Treasury Cabinet Secretary John Mbadi emphasized its significance, stating, “There is talk that if we could offload more of our ownership of Safaricom, we are likely to get the KES 149 billion through privatization.”
The government last offloaded Safaricom shares in 2008 through an oversubscribed IPO that raised KES 51.75 billion. This time, however, analysts are recommending a different path—off-market transactions targeting institutional investors.
Analysts Favor Off-Market Sale to Maximize Returns
Market experts like Wesley Manambo from Standard Investment Bank advise against a traditional public offering. “The most prudent approach given the current market pricing would be an off-market transaction,” he said, pointing to recent premium-value share block deals in the banking sector as examples.
Private equity (PE) firms are reportedly circling Safaricom, drawn by its steady cash flows, predictable earnings, and its crown jewel—M-Pesa, a mobile money platform that revolutionized financial inclusion in East Africa.
Why Safaricom Is a Prime Target for Investors
Safaricom remains Kenya’s most profitable company. In the fiscal year ending March 2025, it posted a 7.2% net profit growth to KES 45.7 billion, despite absorbing operational losses from its Ethiopian expansion. A KES 1.20 per share dividend was proposed, meaning KES 16.8 billion in payouts—a sizeable revenue stream the government would forgo in a share sale.
M-Pesa, combined with strong data services and market dominance, make Safaricom an attractive long-term asset for global investors seeking exposure to African growth markets.
Ethiopia: Risk or Reward?
Safaricom’s entry into Ethiopia, Africa’s second-most populous nation, is a double-edged sword. Since launching in 2022, it has faced security concerns, inflation, and currency instability. Still, executives remain optimistic, projecting a 50% earnings boost as operations mature.
For potential investors, this expansion is either a growth catalyst or a red flag, depending on risk appetite. The Ethiopian story could heavily influence investor interest and sale valuation.
Privatization Beyond Safaricom: Limited Options
While Kenya’s KES 149 billion privatization target includes more than just Safaricom, viable alternatives are scarce. The Kenya Pipeline Company (KPC) is one of the few other profitable state-owned enterprises, but most others have turned into fiscal burdens due to years of mismanagement.
Safaricom thus represents the government’s best asset to unlock immediate capital without incurring new debt or increasing taxes.
Timing, Market Conditions, and Retail Interest
Timing the sale correctly is crucial. Rushing could lead to undervaluation, while delaying may force the government’s hand amid rising fiscal pressure. Kenya’s projected expenditure of KES 4.2 trillion demands creative financing, with privatization proceeds expected to supplement KES 3.3 trillion in tax revenue.
Analysts also highlight retail investor appetite. “With the right discount structure,” Manambo suggests, “retail uptake could be strong.” But flooding the market could depress prices, undermining the sale’s value.
Conclusion: A Defining Financial Decision
The planned Safaricom share sale represents a pivotal moment for Kenya’s economic policy. With high global investor interest, a strong corporate performer in Safaricom, and mounting fiscal pressure, the government faces a critical balancing act.
The success of this sale could reshape Kenya’s privatization blueprint and set the tone for future economic reforms—making it one of the most closely watched financial stories in East Africa.
