Last big cheque: State to earn Sh11.2b Safaricom dividend as share sale nears
Business
By
Brian Ngugi
| Feb 06, 2026
The cash-strapped National Treasury is poised to receive a roughly Sh11.92 billion payout after Safaricom declared a record interim dividend, providing a timely cash infusion ahead of the state's sale of a major stake in the company to South Africa's Vodacom Group.
Safaricom said in a regulatory notice that its board had approved an interim dividend of Sh0.85 per share for the year ending March 2026.
With 40.065 billion Safaricom shares issued, the total interim payout for all Safaricom shareholders will amount to approximately Sh34.06 billion.
The substantial award is consistent with Safaricom's policy of returning a portion of earnings to its shareholders but marks a significant increase from recent years.
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The Sh0.85 per share dividend however sets a new record for an interim payout, surging more than 50 per cent from the Sh0.55 per share paid in both 2025 and 2024. The interim dividend was Sh0.58 per share in 2023.
For the cash-strapped President William Ruto Government, the dividend is a much needed fiscal relief.
Based on its current 35 per cent shareholding, the Treasury's portion of the payout amounts to about Sh11.92 billion.
The funds will arrive as the Ruto government contends with high public debt and repayment obligations that absorb an estimated 40 per cent of state revenues.
The dividend announcement comes just weeks before the expected first-quarter closure of a landmark Sh244 billion deal that will see South Africa’s Vodacom acquire a 15 per cent stake in Safaricom from the Kenyan government.
Vodacom will acquire the shares for a cash consideration of Sh204 billion and five per cent from Britain’s Vodafone for a cash consideration of Sh68 billion.
As a key term of the sale, Vodacom is also paying the Treasury an upfront Sh40.2 billion for the rights to future dividends on the state's remaining shares according to Treasury officials.
Following completion of the acquisition, Safaricom will be owned by Vodacom (55 per cent ), the Government of Kenya (20 per cent) and public investors (25 per cent) and will be consolidated by both Vodacom and Vodafone.
The deal is subject to regulatory approval in Kenya, Ethiopia and South Africa. Safaricom will remain listed on the Nairobi Stock Exchange, while the Kenyan government retains a 20 per cent stake and its board representation.
Vodacom will pay Sh34 per share, lifting its total ownership to a controlling 55 per cent.
The record interim dividend underscores Safaricom's robust financial performance.
The dividend comes as the decision to sell a controlling stake for what is considered Kenya's corporate crown jewel has drawn criticism from some economists and financial analysts.
They argue that the government is trading long-term, recurring revenue for a one-off capital gain, potentially sacrificing future strategic influence and financial returns.
Safaricom contributes an estimated Sh150 billion annually to the exchequer through taxes, fees and dividends. Its MPesa mobile money platform is a critical piece of national financial infrastructure.
"From Vodacom’s perspective, it’s a great deal. It gives them full control of a cash-generative subsidiary. It's an instant boost," said Deepak Dave of Riverside Advisory, commenting on the stake sale in December. "It's a bad deal for the Government of Kenya. They're getting an amount that barely closes any deficit gaps this year and closes off very lucrative future valuation uplifts."
The Treasury has however strongly defended the divestiture as part of a broader strategy to unlock capital for investment in public infrastructure without raising taxes or additional debt.
"This transaction is one of the first steps to unlock capital innovatively, to allow additional investment in critical infrastructure," Treasury Cabinet Secretary John Mbadi said in a statement following the sale announcement.
The interim dividend will be paid on or about March 31 to shareholders on the register as of the close of business on February 25, said Safaricom.