The Kenyan government has agreed to sell a 15 percent stake in telecom operator Safaricom to South Africa’s Vodacom in a transaction valued at approximately USD 1.6 billion, as part of efforts to raise funds through the sale of state assets.

The move comes amid pressure from high public debt levels, constrained options for increasing tax revenue, and debt servicing costs that consume a significant share of government income. Asset divestment has become one of the administration’s key financing strategies.

Safaricom, Kenya’s largest company by market capitalization, accounts for a substantial portion of daily trading on the Nairobi Securities Exchange. Vodacom, which already holds 39.9 percent of Safaricom through a joint holding structure with Vodafone, will acquire the additional shares at a price of 34 Kenyan shillings per share. This represents a premium compared to the company’s recent trading averages.

Upon completion of the transaction, Vodacom’s shareholding will rise to 55 percent, giving it effective control of the company. The Kenyan government’s ownership will decrease from 35 percent to 20 percent, while it retains a level of influence in strategic matters.

Proceeds from the sale are expected to support the establishment of a national infrastructure fund and a sovereign wealth fund intended to finance projects in transport, energy, irrigation, and aviation without adding to public debt. The government is also pursuing divestments in other state owned enterprises.

The transaction remains subject to parliamentary and regulatory approvals. Safaricom has operations across the region, including in Ethiopia, where it began providing services in 2022.

Source: Reuters