MP Nyoro warns Safaricom shares offload could cost State billions

Addressing the press on Thursday, MP Nyoro said that the government's move to offload the shares is ill-advised and will only affect public coffers.

The stake, equivalent to 6,009,814,200 ordinary shares sold at Ksh.34 each, will reduce the State's retained ownership in Safaricom from 35% to 20%.

Nyoro believes the sale is a major financial red flag, pointing out that the government sold at Ksh.45 before investing in Ethiopia, which was licenced in 2021.

He described it as a move spearheaded by incompetent individuals or those seeking to serve their personal interests at the expense of plunging the country into a deep financial crisis.

""There is no way the government can purport to sell Safaricom at less than Ksh.2.5 trillion other than if there is self-interest or incompetence. The government has sided with the buyers and is going on a major loss," he noted.

"The government is underselling Safaricom and Kenyans are going on losses."

In the planned sale, the government will receive an upfront payment of approximately Ksh.40.1 billion for the right to receive Ksh. 55.7 billion in future Safaricom dividends that would have accrued to the government on its remaining stake.

Nyoro stated that the State is focused on receiving dividends without considering the outcome of the sale, arguing that it is a quick way to increase revenue to the exchequer.

"The government is lazy to grow the economy because that is when you get to support the growth of infrastructure and we are now looking for shortcuts. This is just the beginning," Nyoro opined.

He advised the government to first sell off subsidiary business interests or investments within Safaricom, as well as divestitures, and to create three entities that could be valued and sold separately if the need arose.

The acquisition, however, is subject to all necessary approvals from regulatory and governmental authorities in Kenya, South Africa, and Ethiopia, where Safaricom recently launched a new operation.

Kenya’s Capital Market Authority (CMA) needs to confirm that Vodacom is exempt from making a mandatory takeover offer to minority shareholders.