The Central Bank of Kenya (CBK) backed the government's proposal to sell a 15 percent stake in Safaricom, saying that the deal would not compromise the country’s financial stability.
CBK Governor Kamau Thugge said that Safaricom’s mobile money platform M-Pesa, which holds over Sh250 billion in customer funds, is well cushioned from risks.
“Formal CBK approval is still under assessment, but the proposed transaction will not compromise the integrity of the national payment system provided all prudential safeguards are enforced,” he told the National Assembly's joint committee on Finance and National Planning and Public Debt and Privatisation.
Dr Thugge also noted that proceeds from the sale could bolster foreign exchange reserves, reduce domestic borrowing, and support lower interest rates, creating fiscal space without adding to public debt.
The National Treasury signed a deal to sell a 15 percent stake in Safaricom to South Africa's Vodacom Group for Sh34 per share, amounting to a total of Sh204.3 billion.
The South African multinational currently owns a 35 percent stake in the telco, and will gain a controlling 55 percent interest if it concludes its proposed purchase of the government's stake and a separate five percent from its parent firm Vodafone Group. The government's ownership will drop to 20 percent.
Former Budget Committee chairman Ndindi Nyoro, however, opposed the deal and warned that short-term financial gains could compromise long-term losses.
“The day of the announcement, it came in wholesomely. Who determined that price? Who are these people that were hired?” he told lawmakers, cautioning that weak valuation benchmarks and generous conditions could cost Kenya billions.
“Safaricom is having blockbuster increments in profit. We are selling our cow just when it is coming out of the forest,” the Kiharu MP said calling for the deal to go global.
Mr Nyoro argued that focusing solely on headline proceeds obscures deeper value in the company. He highlighted that regulatory and commercial concessions embedded in the deal, such as extended licences and governance guarantees, could outweigh the cash raised from the sale.
