NAIROBI, Kenya- The government has suffered a major setback after the High Court extended conservatory orders blocking the planned sale of its 15 per cent stake in telecom giant Safaricom to South Africa’s Vodacom Group.
The multi-billion-shilling transaction, estimated at more than Sh204 billion, had been seen as a key fundraising strategy by President William Ruto’s administration to ease fiscal pressure and finance development programmes.
However, the deal has now been stalled by an ongoing constitutional petition challenging the legality and transparency of the proposed sale.
A three-judge bench appointed by Chief Justice Martha Koome ruled that the status quo should remain in force pending the determination of the petition filed by activists and political figures opposed to the transaction.
The petitioners argue that the government’s move to reduce its stake in Safaricom from 35 per cent to 20 per cent threatens national interests and was undertaken without adequate public participation or transparency.
They also claim the shares were undervalued at Sh34 per share despite estimates suggesting a much higher intrinsic value.
Wiper leader Kalonzo Musyoka is among leaders who have moved to court seeking conservatory orders to stop the sale, arguing that Safaricom is a strategic national asset due to its dominance in telecommunications, digital payments and mobile money services through M-Pesa.
The delayed transaction is expected to affect Treasury projections, with reports indicating the government had anticipated receiving over Sh244 billion from the deal, including advanced dividends linked to its remaining shareholding.
The case has sparked heated national debate over whether Kenya should relinquish more control of one of its most profitable companies to a foreign entity.
Supporters of the deal argue the transaction was approved by Parliament and regulatory agencies and would help stabilise government finances.
Safaricom has maintained that the proposed shareholder changes would not affect its operations, governance structure or identity as a Kenyan company.
