Safaricom Chief Executive Officer Dr. Peter Ndegwa told Kenyan lawmakers that the telecoms firm played no role in setting the 34 shillings-per-share price for the government’s planned sale of a 15% stake to South Africa’s Vodacom, saying the valuation was agreed directly between the two shareholders.
- •The Kenyan government has agreed to sell part of its stake to Vodacom, Safaricom’s largest shareholder, a move that would lift Vodacom’s holding from about 40% to roughly 55% and give it majority control.
- •The proposed transaction still requires parliamentary approval, with lawmakers indicating they will continue to scrutinise both the pricing of the shares and the strategic implications of Safaricom’s exposure to the Ethiopian market.
- •Lawmakers and several stakeholders have questioned why the shares were not offered to the wider public, arguing that an open market process could have allowed Kenyans to participate and potentially discover a higher price.
“As management, we were not involved in determining or seeking what the right share price should be,” Dr. Ndegwa said while appearing before a parliamentary committee. “When two shareholders are undertaking a transaction, you leave it to them to decide how they want to conclude that transaction.”
Ndegwa said the transaction was structured as a shareholder-to-shareholder deal and that Safaricom’s role was limited to ensuring compliance with governance, disclosure and regulatory requirements.
“My understanding is that the price was determined based on market reference points and discussions between the shareholders,” he said, adding that Treasury officials and advisers were better placed to explain the detailed pricing methodology.
Government officials have separately argued that the agreed share price reflected prevailing market conditions and took into account both Safaricom’s strong Kenyan operations — including its dominant M-Pesa platform and the risks associated with regional expansion.
The Ethiopia Exposure
MPs also raised concerns about Safaricom’s expansion into Ethiopia, which has yet to break even and continues to require shareholder funding, questioning whether losses from the venture had weighed on the share valuation.
Ndegwa said the Ethiopia business was a long-term strategic investment and should not be viewed in isolation when assessing Safaricom’s value.
“Ethiopia is a growth market, not a short-term profitability play,” he said, noting that heavy upfront capital expenditure was expected in the early years. “It is still in the build phase, and that is consistent with how telecom investments typically mature.”
He added that Safaricom Ethiopia had made progress in network rollout, customer acquisition and mobile money infrastructure, and that the board and shareholders remained committed to the market despite near-term losses.
