Kenya's National Assembly has approved the Government's plan to sell a 15% stake in Safaricom PLC to Vodacom Group, clearing the largest divestiture in the country's post-independence history, with regulators now set to review the deal.
- •The House adopted the report of the Joint Departmental Committee on Finance and National Planning and the Select Committee on Public Debt and Privatization on 10 March 2026, resolving to approve Sessional Paper No. 3 of 2025.
- •The transaction, valued at KSh 204.3 billion (USD 1.576 billion), will raise Vodacom's shareholding from 40% to 55%, giving the South African telecoms group majority control of Safaricom.
- •The effective date for completion is 1 April 2026, or later, contingent on obtaining all regulatory approvals listed as conditions precedent in the Share Purchase Agreement.
The Joint Committee found that the KSh 40.2 billion upfront payment in lieu of future dividends on the government's residual 20% Safaricom stake represents a net financial advantage to the state. Although the government will repay KSh 55 billion over six years, the present value of that obligation discounted at prevailing market rates is approximately KSh 29.3 billion, leaving a net present value advantage of approximately KSh 10.9 billion in favor of the government.
The Committee also found that the KSh 34.00 per share negotiated price for the Safaricom partial divestiture to Vodacom represented a premium of 17 to 19% above the six-month volume-weighted average price of approximately KSh 27.50 at the time the agreement was executed in December 2025. The committee noted the price also exceeded the high-end valuation range implied by trading multiples, dismissing concerns of undervaluation.
That conditionality is where the transaction's immediate risk lies.
- •CBK Governor Kamau Thugge told the Committee that the Bank was still assessing Vodacom's fitness and propriety as a controlling shareholder, governance structures post-transaction, ring-fencing of KSh 250 billion in customer funds, and cross-border supervisory arrangements with Vodafone's home regulators.
- •The Competition Authority of Kenya had not been formally notified of the transaction.
- •The Communications Authority has only issued a preliminary position.
M-Pesa processed KSh 83.7 trillion in transactions in 2025, equivalent to roughly four times Kenya's GDP, and commands 95% of retail digital payments.
CBK's approval is not procedural but substantive, and it carries conditions of its own. Parliament attached six binding conditions to its approval.
- •The transaction must be executed through the NSE Block Trading Platform.
- •The Government must receive KSh 40.2 billion as an upfront payment in lieu of future dividends on its residual 20% stake.
- •All proceeds, totaling an estimated KSh 244.2 billion including the upfront dividend, must be deposited into the National Infrastructure Fund.
- •There shall be no acquisition-related redundancies.
- •The shared prosperity business model supporting Safaricom's dealers, agents, and business partners must be preserved for 10 years.
The redundancy and dealer protection conditions are materially stronger than what the original Sessional Paper proposed. The paper offered a three-year no-redundancy window. Parliament removed the time limit entirely and extended business model protection to a decade.
The National Infrastructure Fund
The legal home for those proceeds now exists. President William Ruto signed the National Infrastructure Fund Act into law on 9 March 2026, one day before Parliament approved the Safaricom divestiture. The National Assembly had passed the legislation on 6 March after weeks of debate and amendments aimed at strengthening oversight and governance.
Structured as a body corporate, the fund can own property, enter contracts, and invest in projects, but is barred from borrowing or taking credit against its balance sheet. A Governing Council chaired by the Treasury Cabinet Secretary, and including the CBK Governor, the Attorney-General, and six independent members, will oversee operations.
What remains open is time with the Government having until 1 April 2026 to obtain regulatory clearances across four agencies and close a transaction worth USD 1.88 billion.
