The Kenyan government is evaluating a significant restructuring of Safaricom, the country’s largest publicly listed company, with plans to split it into three separate operational units. Under the proposed framework, Safaricom would be divided into:
- A core telecommunications company responsible for mobile and internet services.
- A tower infrastructure operator managing physical network assets.
- M-PESA, the mobile money platform that has become central to Kenya’s digital economy.
This strategic move follows a regulatory review aimed at enhancing transparency, improving operational efficiency, and potentially unlocking greater shareholder value.
Safaricom is currently 35% owned by Kenya’s National Treasury, with additional ownership held by South Africa’s Vodacom Group Ltd. The company is burdened by a debt of approximately KSh 75 billion (about $580.5 million), primarily linked to an ongoing tax matter that is nearing resolution. Treasury Secretary John Mbadi disclosed the restructuring plan during an interview in Nairobi, as reported by Bloomberg.
In a related development, the government announced in May 2025 its intention to reduce its stake in Safaricom as part of a broader privatization initiative. This divestment strategy aims to raise KSh 149 billion (around $1.16 billion) during the 2025/26 fiscal year through the sale of shares in various state-owned enterprises. The move is driven by mounting fiscal pressures, particularly the rising cost of debt servicing. Between July 2023 and February 2024, Kenya spent KSh 722 billion ($5.5 billion) on interest payments more than half of its total tax revenue for that period. Forecasts suggest that interest obligations could exceed KSh 1 trillion ($7.7 billion) by the end of 2025, prompting the government to seek alternative revenue sources.
Despite these financial challenges, Safaricom remains one of Kenya’s most valuable corporate assets, largely due to the success of M-PESA. In 2024, the company posted an 11% increase in net profit, reaching KSh 69.8 billion ($540 million), buoyed by its expansion into Ethiopia. The government also benefited from a dividend payout of KSh 16.8 billion ($130.5 million) from its shareholding.
Safaricom has continued to deliver strong performance in 2025. In May, it surpassed $3 billion in annual revenue for the first time across Kenya and the broader region. The company has aggressively expanded its 5G network, now available in all 47 counties and covering 14% of the population. It has also launched new services such as M-PESA Go and entered strategic partnerships with major retailers and iXAfrica Data Centres to enhance its digital offerings.
While its Ethiopian operations have encountered initial hurdles, Safaricom remains optimistic about the market’s long-term potential. According to CNBC Africa, the company anticipates a significant reduction in losses from its Ethiopian venture in the near future.
