NAIROBI, Kenya, Dec 10 – A petition has been filed urging Parliament to scrutinize the Government of Kenya’s proposed sale of a 15 percent stake in Safaricom, citing concerns over valuation transparency and potential long-term fiscal losses.
Lawyer Francis Wanjiku, in a memorandum to the National Assembly’s Finance and Privatization committees, highlighted financial and structural risks in the planned divestiture.
“The State may be forgoing material value upside that would otherwise accrue to the public balance sheet or future budgets without disclosing material facts to the public,” read the memorandum in part.
The divestiture proposes selling 15 percentage points of the government’s 35 percent Safaricom stake to Vodacom for an estimated Sh244.5 billion, which includes Sh204.3 billion from the share sale and Sh40.2 billion upfront for future dividend rights.
Wanjiku flagged concerns over the pricing methodology, noting that the proposed Sh34 per share represents a 23.6 percent premium over the six-month volume-weighted average price (VWAP) of Sh27.50, but lacks independent valuation or a fairness opinion.
“Without an independent validation, investors may interpret the transaction as opportunistic or fiscally pressured, potentially widening sovereign risk premia and reducing appetite for future asset sales.”
The petition also questioned the monetization of future dividend rights, which is projected to forgo Sh15.5 billion compared to the estimated Sh55.7 billion in cumulative dividends.
Wanjiku suggested alternative structures, such as staged monetization or revenue participation, to safeguard long-term fiscal inflows.
The advocate recommended immediate public disclosure of all valuation models, assumptions, and advisor credentials, along with negotiation of protective clauses to preserve potential upside from Safaricom’s future earnings.
The Finance and Privatization committee are now expected to review the memorandum as part of public participation on the proposed divestiture.
