Broke Treasury eyes Sh244b boon as Safaricom sale deal concludes
Business
By
Brian Ngugi
| Jul 02, 2026
The National Treasury will get a Sh244.2 billion cash injection after the sale of a 15 per cent stake in Safaricom to South Africa’s Vodacom Group, a transaction that hands the telecom giant’s majority control to foreign investors and ends an era of State dominance in it.
The deal, which became effective on June 30, saw Vodacom acquire 6,009,814,200 ordinary shares from the government through a block trade on the Nairobi Securities Exchange, increasing its effective stake in East Africa’s most profitable company to 55 per cent from 35 per cent.
The government’s shareholding has been reduced to 20 per cent, while public investors retain 25 per cent.
For the cash-strapped Treasury, the sale represents a much-needed financial lifeline at a time when public debt consumes about 40 per cent of annual revenues.
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The government will receive Sh204.3 billion from the sale of its 15 per cent stake, plus an additional Sh40.2 billion upfront payment for future dividend rights on its remaining 20 per cent shareholding, structured as a loan backed by the state’s residual stake.
The transaction, first announced in December 2025, had been stalled by court challenges before Kenya’s Court of Appeal lifted orders blocking the sale on June 26, clearing the way for the deal to proceed.
The court ruled that public interest outweighed the need to halt the deal, noting that delays were costing the country up to Sh70 million per day.
A day before completion, Vodafone Kenya secured an exemption from the Capital Markets Authority from making a mandatory takeover offer to minority shareholders, removing a key regulatory hurdle.
The exemption, granted under Regulation 5(1) of the Capital Markets (Take-overs and Mergers) Regulations, 2002, treated the transaction as a negotiated share acquisition and internal group restructuring rather than a conventional takeover.
Treasury Cabinet Secretary John Mbadi has said the proceeds would support infrastructure investment, including roads, energy, water systems and airports.
Parliament had previously mandated that all proceeds be ring-fenced into a newly created National Infrastructure Fund, a condition that became binding after lawmakers approved the contentious divestiture.
The sale was priced at Sh34 per share, representing a premium of 23.6 per cent above the six-month volume-weighted average price as of December 2025 according to the Treasury.
At the time of the announcement, Safaricom shares were trading at around Sh29.50 on the Nairobi Securities Exchange.
The transaction comes with strict parliamentary conditions aimed at protecting the telecom’s vast ecosystem, which supports more than 1.3 million jobs across Kenya through direct operations, supply chain, and economic ripple effects.
M-Pesa alone serves over 35.8 million active customers and processes transactions valued at more than Sh83 trillion annually, equivalent to nearly four times Kenya’s GDP.
For Vodacom, the acquisition strengthens its East African position, adding majority exposure to Safaricom’s Kenyan business, M-Pesa franchise, and Ethiopia expansion, where Safaricom has built a customer base of about 14 million.