Kenya’s Treasury Targets $1.1 Billion by Selling Safaricom Stake

Kenya’s Treasury has announced plans to divest a portion of its 34.9% stake in Safaricom by June 2026, aiming to secure a substantial portion of the Sh149 billion (approximately $1.1 billion) projected from state-asset privatization initiatives.

Treasury Cabinet Secretary John Mbadi described Safaricom—valued at Sh280.5 billion on the Nairobi Securities Exchange—as the government’s most significant asset capable of addressing its fiscal deficit. This move comes as the government opts to avoid imposing new taxes in the 2025/26 Finance Bill, placing emphasis on alternative revenue sources.

The government is currently evaluating two primary options: a secondary public offering or an off-market block sale targeting high-net-worth individuals and private equity firms. A partial divestiture of 5–10% at the current share price of Sh19.90 is projected to yield between Sh39.8 billion and Sh79.7 billion. Should a larger stake be sold, the proceeds could surpass the Sh51.7 billion raised during Safaricom’s landmark 2008 initial public offering.

Analysts favor a private sale, citing the potential for a premium valuation, as Safaricom shares trade below their fair market value despite a robust 7.2% profit increase to Sh45.7 billion and a Sh1.20 per-share dividend for the fiscal year ending March 2025.

The funds raised are expected to support Kenya’s expansive Sh4.2 trillion budget, easing the pressures of debt servicing while mitigating the need for additional borrowing. However, the divestment will reduce the exchequer’s future dividend inflows from one of its most lucrative assets.

This initiative also signals a revival of Kenya’s privatization agenda, which has stagnated in recent years. The Kenya Pipeline Company has been identified as the next candidate in the government’s renewed push for privatization.

This move is likely to attract significant regional and global investor interest, particularly from funds seeking cash-generative assets in Africa’s rapidly growing telecommunications sector.

By leveraging Safaricom’s dominant market position and financial strength, Kenya not only addresses its immediate fiscal needs but also revitalizes its image as a competitive investment destination, potentially stimulating further economic growth and investor confidence across the region.