The Law Society of Kenya (LSK) has opposed the government’s proposal to partially divest its shareholding in Safaricom PLC, warning that the move could undermine constitutional safeguards, data sovereignty, and long-term public interest.
LSK, while appearing before the National Assembly joint committee of Finance and National Planning and Public Debt and Privatisation, presented a memorandum signed by LSK President Faith Odhiambo and presented by LSK Vice President Mwaura Kabata, urged Parliament to reject Sessional Paper No. 3 of 2025 in its current form, citing concerns over valuation transparency, loss of future dividend income, foreign control of critical digital infrastructure, and inadequate public participation.
“The National Treasury, through the Sessional Paper, proposes a partial divestiture of approximately 15 per cent of the government’s stake to raise an estimated Sh240–244.5 billion for infrastructure financing, while retaining a 20 per cent strategic holding,” Kabata told the MPs.
“While the proposal offers short-term fiscal relief at a premium valuation, it raises concerns on long-term foregone dividend income, legal compliance, and constitutional requirements.”
Kabata argued that Safaricom, despite being a publicly listed company, remains a national asset due to its dominance in telecommunications and its central role in mobile money services through M-Pesa.
“Given Safaricom’s strategic location at the intersection of public finance, digital infrastructure, and capital markets, any reduction in government ownership constitutes a strategic national decision with fiscal, macro-economic, capital market, and sovereignty implications,” Kabata said.
“LSK does not support the proposed divestiture model due to its broader constitutional, governance, and long-term public interest concerns, including risks of undervaluation, absence of transparent valuation methodology, short-term revenue prioritisation over long-term sustainability, and inadequate clarity on proceeds utilisation.”
The society further said that the proposed transaction would result in majority foreign ownership of Safaricom, potentially exposing Kenya’s data infrastructure, mobile money systems and financial security to external influence.
The lawyers’ body also faulted the Sessional Paper for failing to disclose the valuation methodology, timing and structure of the proposed sale, raising the risk of undervaluation of a high-performing, dividend-yielding public asset.
Kesses Member of Parliament Julius Ruto challenged the lawyers’ body to propose an alternative methodology for evaluating the share sale, different from the government’s proposal. The body then affirmed before MPs that the deal should be done transparently, with independent verification and a clear definition.
“We propose the deferment of any divestiture of Safaricom PLC shares until a transparent, independently verified valuation and a clearly defined, competitive sale structure is established in full compliance with Article 201 of the Constitution,” Kabata added.
“Any proposed sale should be supported by publicly disclosed valuation methodologies, an assessment of optimal timing within the market cycle and a clear fiscal framework demonstrating that proceeds will be applied to debt reduction or productivity-enhancing capital investment rather than short-term budget support.’”
While acknowledging the government’s need for alternative infrastructure financing amid rising public debt, LSK warned against sacrificing a strategic national asset for short-term gains.
“The LSK agrees with the GOK on the need for debt-free infrastructure funding; however, the goose that lays the golden egg cannot be sacrificed to achieve this. The objective of securing Kenya’s future in the priority sectors by partial divestiture must guarantee future local availability of these entities that were built and sustained by Kenyans from the ground up,” Kabata warned.
Kabata called on the lawmakers to decline the proposal, citing a broader stakeholder engagement, saying that it requires comprehensive national security.
“We recommend this honourable house decline approval of the Sessional Paper in its current form, as consideration of multiple bidders requires the Sessional Paper be reviewed, revised, and subjected to wider stakeholder engagement before any implementation is undertaken and requires a transparent, competitive price discovery process, including disclosure of detailed valuation, financial, and market-risk analyses and a comprehensive national security, data sovereignty, and fiscal impact assessment,” Kabata concluded.
The lawmakers questioned LSK’s stance of categorically rejecting the Sessional Paper because it fails to recognise Kenya’s limited financial resources and the necessity of mobilising non-debt resources.
LSK also failed to suggest an alternative methodology for share price valuation.
