Central Bank of Kenya (CBK) Governor Dr. Kamau Thugge has defended the government’s plan to sell a 15% stake in Safaricom PLC, describing it as a key strategy to fund national infrastructure without increasing debt.
Speaking to lawmakers, Dr. Thugge said the proposed divestiture would have a positive impact on Kenya’s economy, boosting foreign exchange reserves, stabilizing the exchange rate, and creating fiscal space to reduce domestic borrowing and interest rates.
The plan, detailed in Sessional Paper No. 3 of 2025, would see the government reduce its shareholding in Safaricom from 35% to 20%, while Vodafone Kenya Limited (VKL) would increase its stake from 40% to 55%, becoming the majority shareholder. The deal is expected to generate around Sh244.2 billion ($1.88 billion), including upfront payments and future dividends.
Dr. Thugge highlighted the government’s fiscal pressures, noting that revenue continues to fall short of targets and that opportunities for new taxes are limited. Traditional funding from multilateral lenders is declining, while commercial debt is costly.
“We welcome this innovative way of financing our infrastructure needs in roads, energy, water, and transport without adding to our already high debt,” the governor told parliament.
The move is also expected to help Kenya achieve its debt anchor goal of 55% of GDP, down from 68.9% recorded in September 2025. Additionally, the proceeds would strengthen the country’s foreign exchange position, raising reserves from $12.39 billion (5.3 months of import cover) to $14.28 billion (6.2 months of import cover). This is expected to stabilize the exchange rate and provide a buffer against external shocks, helping contain imported inflation.
Dr. Thugge assured lawmakers that the CBK’s regulatory oversight of Safaricom would remain strong, even after the ownership change. He emphasized that M-Pesa’s systemic importance and the increased concentration of ownership would require enhanced reporting and supervision.
“CBK’s authority is not diluted by the change in ownership. We will continue to apply enhanced oversight on Safaricom,” he said.
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