Nairobi — Community and professional association GEMA has urged Parliament to prioritise local investors in the planned divestiture of the government's stake in Safaricom, warning against selling the shares directly to Vodacom Group.
In a submission to a parliamentary committee reviewing the proposal, the GEMA Cultural Association, through its professional arm Ndari Kirimaini, said Kenyan retail investors, pension funds, insurance firms and other local institutional investors should be given first priority in acquiring the state's 15 percent shareholding in the telecoms firm.
"Prioritising Kenyan investors ensures that dividend income and long-term value remain within the domestic economy rather than flowing abroad, strengthening our national capital base," the association said.
"It is not anti-foreign investment; it is pro-Kenyan economic empowerment and sustainable wealth creation."
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GEMA cited data showing excess liquidity among local institutional investors, pointing to frequent oversubscriptions in Treasury bond auctions as evidence that domestic capital markets have the capacity to absorb the Safaricom shares.
The group argued that wider participation by ordinary Kenyans and local institutions would deepen capital markets, broaden ownership and retain future dividend flows for domestic reinvestment.
The submission is among several views being considered as Parliament conducts public hearings and receives memoranda on the proposal to partially divest the government's holding in Safaricom--a process that is constitutionally required before any sale can proceed.
The government currently holds a 35 per cent stake in Safaricom and plans to sell 15 per cent to Vodacom Group in a transaction expected to raise about Sh204 billion.
Under the proposed deal, the government would retain a 20 per cent stake, Vodacom's shareholding would increase to about 55 per cent, while the remaining 25 per cent would continue to be held by public investors.
The proposed sale follows earlier divestments, including the 2008 initial public offering (IPO), in which the government sold 25 per cent of Safaricom to the public, significantly broadening local ownership.
The divestiture forms part of the government's wider strategy to raise non-tax revenues, ease borrowing pressures and fund priority development projects, including infrastructure, energy and water systems.
However, the plan has attracted mixed reactions, with petitions and legal challenges raising concerns over transparency, valuation and process, and sparking debate among lawmakers, investors and civil society.
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Parliament is expected to factor in public submissions as committee deliberations continue ahead of any final decision on the proposed sale.
