MPs approve sale of Safaricom shares as new safeguards are introduced

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Lawmakers have given the nod to the government’s sale of its 15 per cent stake in Safaricom PLC to Vodacom Group, in a move expected to raise over Sh204 billion to bolster infrastructure projects in the country.

The National Assembly’s Public Debt and Privatization Committee jointly with the Finance Committee has recommended that the House adopt its report on the sale, further introducing new safeguards to ensure safeguards to guide the process.

This was, however, not without criticism from a section of lawmakers who were opposed to what they termed as the “hurried” sale of the shares and opaqueness on how the funds derived from the partial sale would be expended.

Key among the recommendations in the report on Safaricom’s partial divestment, the joint committee held that no current employees should be made redundant.

The joint committee, co-chaired by Molo MP Kimani Kuria and Mbalambala MP Shurie Abdi, emphasised the importance of protecting current staff jobs and assured that there will be no redundancies arising from Safaricom acquisitions.

It also indicated that the National Treasury Cabinet Secretary should also ensure that within 10 years of divestment, the current shared prosperity business model at Safaricom remains largely unchanged in a way that does not harm existing Safaricom dealers, agents, or other business partners.

“I beg to give notice of the motion that this House adopts the joint report of the departmental Committees on Finance and Public Debt on the consideration of Sessional Paper No 3 of 2025 of partial divestiture of Safaricom by the Government laid on the table of the House on March 10 and approves Sessional Paper No 3 of 2025 …,” the Balambala MP Abdi said.

He added that the House should decide on an effective date for approval, which could be April 1 or a later date once all regulatory approvals, forming the conditions precedent of Section 4.1 of the share purchase agreement, have been obtained.

Abdi stated that the report suggests that the National Treasury Cabinet Secretary will, upon receiving all the regulatory approvals required under paragraph 4.1 of the share purchase agreement, undertake and finalise the transaction via the block trade platform on the Nairobi Securities Exchange (NSE).

The House team also recommended that upfront payments be made in place of future dividends that the Government will receive, totaling Sh40 billion and Sh200 million, which sums to Sh40.2 billion, as an upfront payment for future dividends on the remaining 20 per cent shareholding, as detailed in the dividend share agreement.

Furthermore, the report states that, notwithstanding any provisions in the share purchase and dividend purchase agreements, the proceeds from the divestment will be directed into the National Infrastructure Fund (NIF).

During stakeholder engagement, Safaricom PLC had alleviated concerns about the company’s status if the partial divestment proceeds, confirming that it will continue to be a Kenyan corporation.