The Institute of Certified Public Accountants of Kenya (ICPAK) has raised concerns over the government’s proposal to partially divest its shareholding in Safaricom PLC, warning that gaps in valuation transparency, governance safeguards, and long-term fiscal planning could undermine public confidence and national interests.
Earlier, the National Treasury had indicated that the funds would be used to finance priority infrastructure projects in energy, roads, water, and airports at a time when budgetary pressures remain high.
Treasury CS John Mbadi said that if the deal sails through, the government will receive a fat cheque.
In a detailed submission before a joint sitting of National Assembly committees (Public Debt and Privatization and Finance and National Planning), ICPAK reviewed Sessional Paper No. 3 of 2025, where the transaction is expected to raise Sh204.3 billion, with an additional Sh40.2 billion from the sale of rights to future dividends, bringing total proceeds to Sh244.5 billion.
ICPAK Chairman Elizabeth Muvui, speaking before the legislators, cautioned that the proposed share price has not been supported by a clearly disclosed valuation methodology, where the institute noted that while the price reflects a premium over recent market averages, reliance on historical trading data does not adequately capture Safaricom’s intrinsic value, future earnings potential, or strategic importance to the economy.
”The proposed price of Sh34 per share has not been accompanied by a clear explanation of the valuation methodology, raising concerns over price discovery and accountability. If not addressed, this will fuel the perceived concern that the offer price is below Safaricom’s all-time high of Sh44.7 in 2021, reinforcing public perceptions that the asset may have been sold below its intrinsic value,’’ Muvui warned.
“Through the monetization of future dividends, future Government administrations lose discretion over a dependable revenue source that could have supported recurrent or development expenditure.”
Under the proposal, the government’s shareholding in Safaricom would fall from 35 percent to 20 percent, while Vodafone’s stake would rise to 55 percent, giving it majority control.
ICPAK warned that this shift could significantly reduce the government’s influence over strategic decisions, including those related to critical operations such as M-PESA, data governance, and financial inclusion.
“Vodafone’s shareholding increases to 55 percent, resulting in majority control and potentially reducing the government’s leverage in strategic decision-making,’’ Muvui said.
“The decision to pursue a private transaction rather than a public offering has attracted criticism, which may undermine public confidence in the privatization process. The perceived weaknesses in transparency and valuation may complicate future privatization efforts by intensifying political and public resistance.”
On the other hand, the institute further expressed firm concerns over the monetisation of future dividends, arguing that it would deprive future administrations of a stable and predictable revenue stream in exchange for a one-off capital injection.
Drawing comparisons with international practice, ICPAK pointed to India’s divestment framework, which prioritises public offerings, detailed valuation disclosures, and the allocation of proceeds to both infrastructure and social sector programmes.
”India has progressively developed a strategic disinvestment framework anchored in valuation procedures. According to the National Institute of Public Finance and Policy (2022), public offers were the most widely used method of disinvestment in India during the period from 2005 to 2014,” Muvui added
“Out of a total of 43 disinvestment transactions, 32 were conducted through public offers, including 13 transactions executed via stock exchange. Collectively, public offers contributed approximately 84 percent of the total disinvestment proceeds during the phase,” Muvui reminded the MPs.
“The proposed partial divestiture of the Government of Kenya’s stake in Safaricom PLC warrants comparison with international practice, particularly India’s experience.”
ICPAK recommended that, to strengthen Safaricom’s divestiture process, enhanced transparency in pricing, stronger governance safeguards, extended employment protections, and regulatory measures to protect sensitive national assets must be adhered to.
“The Government should ensure that the entire share sale process is guided by a balanced consideration of national strategic interests and fiscal requirements, so that revenue-raising objectives do not undermine long-term economic and developmental priorities,” Muvui recommended.
“There is a need for building institutional capacity within the Privatization Authority, and other government agencies are essential for effective implementation of the privatization program. This includes developing expertise in areas such as valuation and transaction structuring.’”
The institute further urged the government to prioritise public offerings through the Nairobi Securities Exchange in future divestitures to deepen capital markets and broaden domestic investor participation.
