Kenya is gearing up to sell a portion of its 34.9% stake in Safaricom, the country’s most valuable corporate asset, in a bid to raise $1.1 billion and alleviate mounting debt pressures. This move comes as the government seeks to avoid imposing additional taxes on its citizens. The sale, expected to take place before the end of the 2025/26 fiscal year, marks the government’s largest divestiture in nearly twenty years and is poised to attract global investors looking to capitalize on Africa’s burgeoning telecom industry.
With debt servicing costs projected to surpass $7.7 billion this year and limited financing options available, Kenya views privatization as a crucial lifeline amidst economic challenges and public opposition to further taxation. Safaricom’s robust profitability, fueled by its popular mobile money platform M-Pesa, positions it as an ideal candidate to kickstart the government’s privatization strategy.
This strategic decision underscores the government’s proactive approach to addressing its financial woes while tapping into the potential of Safaricom’s success in the telecom sector. By selling a stake in the company, Kenya aims to unlock much-needed capital to shore up its finances and steer clear of imposing additional tax burdens on its citizens.
The impending sale of Safaricom’s stake is set to be a significant milestone in Kenya’s economic landscape, paving the way for increased investor interest and injecting fresh momentum into the country’s telecommunications industry. As the government navigates the complexities of debt management and fiscal sustainability, the privatization of Safaricom represents a pivotal step towards securing a more stable financial footing.
Stay tuned for more updates on this developing story.
Source: Techcabal
