Kenya is cashing in on Safaricom to fix its debt mess

Kenya’s National Treasury is preparing to sell part of its 34.9% stake in Safaricom—the country’s most valuable company—as it seeks to raise $1.1 billion to plug a growing budget deficit and reduce the need for unpopular tax hikes.

Treasury Cabinet Secretary John Mbadi confirmed the move, marking the biggest divestiture since the 2008 Safaricom IPO. That IPO raised over $400 million and left the government with a sizable stake it has since been reluctant to touch—until now.

“If we offload part of our Safaricom shares, we could raise the Sh149 billion ($1.1 billion) needed through privatisation in the 2025/26 financial year,” Mbadi told Business Daily.

The motivation? A swelling public debt now standing at $88.5 billion (KES 11.4 trillion)—a $20 billion jump since President William Ruto took office three years ago. With interest payments alone expected to surpass $7.7 billion this year, Kenya is pressed to find revenue without pushing its already-taxed citizens over the edge.

Safaricom: Still Kenya’s crown jewel

Safaricom remains a rare national asset with reliable returns. In 2024, it recorded an 11% net profit jump to $540 million, driven by M-PESA and data revenues, including gains from its Ethiopian expansion. The telco declared $130 million in dividends to the state last year, showing why its shares are such hot property for institutional investors.

The stake currently held by the government is worth approximately $2.1 billion at current market rates. But Nairobi hasn’t disclosed whether it will go public with a secondary offering or opt for a private block sale—both of which are on the table.

Analysts believe this sale could reignite investor interest in East African telecoms, especially from Africa-focused private equity firms chasing stable cash-flow assets.

A history of failed privatization

Despite promising returns from assets like Safaricom, Kenya’s privatization track record is rocky. Attempts to offload underperforming parastatals—hotels, sugar mills, and even national airlines—have stalled under political interference and chronic mismanagement.

The current move signals a more pragmatic shift: selling off performing assets instead of bleeding ones. It also aligns with a broader pattern in African economies—rebalancing public portfolios amid debt concerns and global investor interest in African infrastructure and fintech ecosystems.

The bottom line

Kenya’s Safaricom sale isn’t just a fiscal maneuver—it’s a political test. With limited room to borrow more or squeeze taxpayers further, the Treasury is gambling on investor appetite for a blue-chip African telco. But the devil will be in the details: execution, transparency, and timing will determine whether this privatization reshapes the country’s fiscal future—or simply delays another reckoning.