Kenya’s government has disclosed plans to divest a portion of its 34.9% stake in Safaricom,the country’s largest telco and East Africa’s tech juggernaut, aiming to raise KSh149 billion ($1.16 billion) to fund the 2025/26 national budget by offloading stakes in 11 state-owned enterprises. While this move is primarily a fiscal strategy, it carries significant implications for Kenya’s tech ecosystem, potentially reshaping the landscape of innovation, investment, and digital infrastructure in the region.
Safaricom is not just a telecom operator; it is a cornerstone of Kenya’s digital infrastructure. With its mobile money platform, M-PESA, Safaricom has revolutionized financial inclusion, supporting over 60% of the country’s GDP in mobile money transactions. The company’s robust performance, including an 11% increase in net earnings to $540 million in 2024, underscores its critical role in the economy.
Reducing the government’s stake could open doors for increased private investment, potentially leading to greater innovation and efficiency within Safaricom. Private investors may drive the company to diversify its services and expand its reach, fostering a more competitive and dynamic tech sector.
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However, the sale raises concerns about national digital sovereignty. Safaricom’s infrastructure is integral to Kenya’s e-governance and digital compliance systems. Critics argue that divesting from such a strategic asset could compromise the country’s control over essential digital services and data as it an anchor institution not just in Kenya but across East Africa, especially after its expansion into Ethiopia in 2022.
The government faces a delicate balancing act of addressing immediate fiscal needs without undermining long-term strategic interests in the tech sector. As Kenya navigates this transition, the decisions made will have lasting effects on the nation’s digital landscape and its position in the global tech arena.
