Kenya’s Parliament has intensified scrutiny of the government’s plan to sell a 15 percent stake in Safaricom Plc to Vodacom Group, raising questions about transparency, valuation, and public participation.
Lawmakers, banks, and lawyers have called for broader involvement, while dealers warn the sale could disrupt Safaricom’s grassroots distribution model.
NSE Position
The Nairobi Securities Exchange (NSE) has backed the sale but insists the transaction must go through the Block Trading Board. In a memorandum to Parliament, the bourse warned that bypassing the exchange for an off‑market deal would undermine price transparency and investor confidence.
The NSE argued that the Block Trading Board offers a regulated framework with real‑time reporting, price governance, and settlement controls. It said the agreed price of Sh34 per share, a 23.6 percent premium over the six‑month average to December 2, 2025, represents optimal value for the State. The exchange added that executing the deal on its platform would signal Kenya’s ability to manage large equity transactions under strong regulation.
To safeguard long‑term interests, the NSE proposed a 10‑year lock‑in for Vodacom, preventing any transfer or encumbrance of the acquired stake without parliamentary approval.
Regulators endorse Safaricom stake sale, boosting investor confidence
Treasury Defence
The National Treasury has defended its decision to pursue a direct sale to Vodafone Kenya, rejecting calls for competitive bidding. Officials argued that an open process could yield lower offers and weaken the government’s negotiating position.
Treasury dismissed private equity participation, citing concerns over operational expertise and lower premiums, referencing challenges with Helios Investment Partners at Telkom Kenya. It also ruled out a public offer through the NSE, warning of market saturation and costly underwriting if multiple state listings coincided.
Officials maintained that Vodafone Kenya’s role as an existing shareholder reduces execution risk and justifies a continuity premium.
ICPAK Concerns
The Institute of Certified Public Accountants of Kenya (ICPAK) has questioned whether the Sh34 per share valuation delivers maximum value for taxpayers. Appearing before Parliament, ICPAK argued that the absence of competitive bidding limits price discovery and may prevent higher offers from emerging.
Dealer Warnings
The Safaricom Dealer Association has cautioned that the sale could weaken the dealer‑based model that underpins Safaricom’s nationwide distribution. Dealers said Vodacom’s centralised approach in other markets contrasts with Safaricom’s shared prosperity model, which relies on local partners as long‑term stakeholders.
The association warned of possible contract reviews, management changes, and job losses. It urged the government to safeguard existing agreements, provide legal protection or compensation, and ensure dealer representation in Safaricom’s governance structures.
Outlook
If approved, the government will sell 6 billion shares at Sh34 each, raising about Sh204.3 billion. The parliamentary committee continues to review the transaction, balancing fiscal objectives, market integrity, and stakeholder concerns.
