Safaricom CEO Peter Ndegwa spent Monday addressing concerns from Members of Parliament regarding the government’s plan to reduce its stake in the telecom giant. The government intends to lower its ownership in Safaricom from 35% to 20%, selling off 15% of its shares to Vodacom. Naturally, this has raised questions about the future of one of Kenya’s most profitable companies and whether it will remain as Kenyan as before.
In his address, Ndegwa sought to reassure lawmakers that the move would not affect the company’s Kenyan identity or operations. He emphasized that Safaricom would continue to operate under Kenyan law and remain regulated by local authorities such as the Communications Authority, the Central Bank, the Capital Markets Authority, and the Competition Authority. Ndegwa made it clear that the company’s listing on the Nairobi Securities Exchange, its management structure, and its board would remain unchanged.
“There is no transfer of operational control, no dilution of regulatory authority, and no weakening of governance standards arising from this transaction,” Ndegwa told the joint parliamentary committees reviewing the divestiture plan.
Clarifying the Nature of the Deal
Ndegwa also clarified that Safaricom itself was not involved in the sale. Rather, this was a shareholder-to-shareholder transaction between the government and Vodacom. Safaricom is simply a bystander in the process, with no direct involvement in the sale or pricing decisions. The company’s role in the transaction is merely to watch two of its major shareholders adjust their ownership stakes.
Concerns Over Sale Price and Undervaluation
Despite Ndegwa’s reassurances, some professionals, including accountants and technology experts, have raised concerns about the proposed sale. The price of KES 34 per share for the 6 billion government-owned shares is significantly lower than Safaricom’s all-time high of KES 44.7 in 2021, leading to fears that the company may be undervalued in this transaction.
Vodacom’s Long-Term Involvement in Safaricom
In response to concerns about Vodacom’s increased stake, Ndegwa pointed out that Vodacom is not a new investor. The company has been a Safaricom shareholder since its inception and has had representatives on Safaricom’s board for over two decades. Vodacom has also played a key role in helping Safaricom expand into Ethiopia, bringing valuable technical expertise and experience from other markets.
Currently, Safaricom serves over 60 million customers in Kenya and Ethiopia. While the government’s sale of shares may raise eyebrows, Ndegwa reassured MPs that the day-to-day experience for customers would remain unaffected.
