Nairobi — The Consumer Federation of Kenya (COFEK) has petitioned the National Assembly to halt the government's proposed sale of a 15 percent stake in Safaricom PLC, warning that the transaction risks handing over "systemic financial infrastructure" to foreign control without adequate public scrutiny.
In a submission presented today to the Departmental Committee on Finance and National Planning, the consumer watchdog argued that the sale, valued at approximately Ksh 244.5 billion, is not merely a fiscal adjustment but a constitutional violation that threatens national economic sovereignty.
COFEK Secretary General Stephen Mutoro told legislators that Safaricom's dominance in the mobile money sector through M-Pesa effectively makes it a critical national asset, rendering its privatization a matter of national security rather than standard commercial practice.
The Treasury, acting through Sessional Paper No. 3 of 2025, is seeking parliamentary approval to divest 6.01 billion shares to Vodafone Kenya--a subsidiary of South Africa's Vodacom Group--at Ksh 34 per share. This divestment would reduce the state's shareholding from the strategic 35 percent held since the 2008 IPO to a minority 20 percent, effectively consolidating majority control (55 percent) under Vodacom.
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COFEK's objection centers on what it terms the "opacity and foreign preference" of the deal. The Federation questioned why the shares were structured as a block sale to an existing foreign strategic partner rather than being offered to Kenyan retail investors, cooperatives, or pension funds. They argued this structure contradicts the "legitimate expectation" that strategic assets should remain domestically owned.
"Safaricom is Kenyan success. Let us not export our few successes for a song when we can easily retain them," the Federation stated in its submission.
Furthermore, the petition raised alarm over the valuation, specifically citing the "Ethiopia Factor". With Safaricom Ethiopia currently in a capital-intensive growth phase, COFEK submits that the government is selling at a discount, effectively socializing the risks while denying Kenyan taxpayers the future upside of the subsidiary's eventual profitability.
The committee has received conflicting testimony regarding the implications of the sale. Conversely to COFEK's position, Safaricom CEO Peter Ndegwa appeared before the joint committee on Monday, Jan 19, 2026, assuring lawmakers that the transaction is a "shareholder realignment" that would not alter the company's governance, identity, or regulatory oversight. Ndegwa emphasized that Safaricom would remain a Kenyan company subject to the Central Bank and Communications Authority, dismissing fears of "state capture" by foreign entities.
However, the Kenya Bankers Association (KBA) has offered a middle ground. In their submission, the bankers proposed a modification to the deal structure where 300.4 million shares would be reserved for the Kenyan public, with the remaining 5.7 billion going to Vodacom. The KBA argues this would deepen capital markets and broaden local ownership, addressing the very concerns raised by civil society regarding the exclusion of local investors.
COFEK's presentation also pivoted to a broader critique of the Executive's fiscal management, describing the sale as "asset stripping" intended to finance inefficiency and corruption. Referencing the "ill-fated Public Finance Bill 2024," the Federation argued that the country is navigating a severe trust deficit and that the Treasury has failed to conduct the mandatory public participation required under Article 10 of the Constitution.
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"Public participation is not noise... it is a constitutional requirement," the submission read, directly countering recent remarks by the Treasury Cabinet Secretary.
This stance mirrors arguments previously advanced by the Law Society of Kenya (LSK) and the Opposition coalition, Azimio la Umoja, who have consistently challenged the legality of the 2023 Privatization Act. The High Court had earlier declared sections of the Act unconstitutional for bypassing parliamentary oversight, a legal battle that continues to shadow the current disposal of assets like the Kenya Pipeline Company and KICC.
COFEK concluded its petition with a challenge to the National Assembly to avoid acting as a "conveyor belt" for Executive decisions, urging them to pause the transaction pending a forensic audit of the valuation.
