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By Victoria Fakiya
Lagos, Nigeria: Kenya’s plan to sell part of its prized telecom asset is hitting fresh scrutiny in parliament.
Lawmakers have ordered the government to renegotiate parts of its deal with Vodacom over future dividends from Safaricom, raising concerns that the original agreement may have given away too much value.
The directive comes as scrutiny grows around the arrangement that allows Vodacom to receive future dividend payments that would otherwise have gone to the Kenyan government.
The dispute stems from a broader transaction in which Kenya sold a 15% stake in Safaricom to Vodacom as part of a multi-billion-dollar deal that will eventually give the South African telecom giant majority control of the company.
Alongside the share sale, the government also agreed to give Vodacom rights to about KSh 55.7 billion in future Safaricom dividends in exchange for an upfront payment of roughly KSh 40.2 billion, effectively offering a discount on the future earnings.
For Kenya, the arrangement provided quick cash at a time when the government needed funds for infrastructure and other spending priorities.
But critics argue that selling future dividend income from one of the country’s most profitable companies could reduce long-term government revenue. Safaricom has historically been one of the biggest dividend contributors to the Kenyan Treasury.
The stakes are high because Safaricom isn’t just another telecom company. It dominates Kenya’s mobile market and runs the hugely influential M-Pesa mobile money platform, making it central to the country’s digital economy.
That’s why the government’s decision to sell part of its stake and the dividend rights tied to it has become one of the most closely watched corporate deals in East Africa.
