Vodacom Group is in discussions with the Kenyan government about acquiring part of its stake in Safaricom, according to people familiar with the talks. The South African operator already owns nearly 40% of Safaricom, Kenya's largest listed company, and is considering increasing its holding. No final decisions have been reached, and none of the parties commented publicly on the negotiations.
Safaricom, valued at about 1.19 trillion Kenyan shillings, controls around two-thirds of the country's mobile market. For Kenya's government, selling a portion of its profitable shareholding could provide fresh revenue as it works to manage rising debt-service costs and a widening fiscal deficit.
Vodacom has increased its exposure to Safaricom before. In 2017, it raised its stake through a share swap with UK parent Vodafone. Both companies are now focused on accelerating the expansion of M-Pesa, the region's dominant mobile-money platform.
Kenya's Treasury Secretary John Mbadi recently said the government had considered splitting Safaricom into three units as part of its wider review of state assets. That proposal would have reduced the state's 35% holding, but Vodacom has ruled out any spin-off of M-Pesa.
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The talks underscore Safaricom's importance to both Kenya's public finances and Vodacom's regional strategy.
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Key Takeaways
Vodacom's interest in expanding its Safaricom stake highlights the central role the Kenyan operator plays in East Africa's telecom and fintech landscape. Safaricom's scale, profitability and control of M-Pesa make it one of the most strategic assets in the region. For Vodacom, increasing ownership offers deeper exposure to a high-growth mobile-money ecosystem that continues to outperform traditional telecom revenues. For Kenya, a partial sale would serve a more immediate purpose: unlocking revenue to ease fiscal pressure. With debt-service costs rising and limited room for tax increases, selling minority positions in state-owned or state-linked assets has become a key option. The talks also come amid debate over whether Safaricom should be restructured. While the Treasury floated the idea of splitting the firm into separate units, Vodacom's opposition to carving out M-Pesa signals the platform's value and the importance of keeping telecom and financial services integrated. Any eventual transaction will signal how Kenya balances revenue needs, regulatory ambitions and investor confidence around its most important corporate asset.
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