Vodacom Group is in talks with the Kenyan government to acquire part of its stake in Safaricom, Africa’s largest listed telecom company. Currently, Vodacom owns nearly 40% of the company and is exploring ways to increase its share by taking part of the government’s 34.9% holding. While discussions are ongoing, no final decision has been made.

Vodacom and Safaricom have not released any statements regarding these discussions. The National Treasury of Kenya has also not yet issued a public response.

Safaricom, the largest mobile provider in Kenya with about two-thirds of the country’s subscribers, has an estimated value of 1.19 trillion Kenyan shillings (about $8.9 billion). This makes it one of the most valuable companies in East Africa.

The Kenyan government is considering selling a portion of its shares in Safaricom. This is because it wants to increase its income, handle growing debt, and reduce budget deficits. Selling part of its Safaricom shares, which generate a profit, could provide a large amount of money at once to help improve the country’s financial situation.

Strategic importance for Africa’s digital market

For Vodacom, increasing its stake in Safaricom would strengthen its control over M-Pesa, Africa’s largest and fastest-growing mobile money platform. M-Pesa is a key financial service in East Africa, providing payments, loans, and transfers to millions. Increased ownership could enable Vodacom to expand M-Pesa’s reach and shape the mobile money landscape in Africa, potentially influencing services as well.

This would not be Vodacom’s first stake increase in Safaricom. In 2017, it raised its holding through a share swap with its UK parent company, Vodafone. The move now reflects a continued strategy to secure long-term influence over Safaricom and its digital finance operations.

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Following Kenya’s Treasury Secretary John Mbadi’s suggestion to split Safaricom into three units, potentially reducing the state’s stake, Vodacom affirmed its commitment to maintaining M-Pesa by ruling out any spin-off of the mobile money platform.

Sale could diminish govt control

While selling a government stake could generate immediate revenue, it would also diminish control over a key national asset. Regulatory review would be necessary to ensure compliance with ownership and competition laws.

Acquiring additional Safaricom shares obligates Vodacom to manage increased ownership, striking a balance between operational and strategic objectives. This move may impact share value, investor confidence, and Safaricom’s regional expansion rate.

Across Africa, this deal may set precedents for telecom investment in regional leaders and mobile money platforms. Its impact on digital finance, telecom ownership, and cross-border investment in East Africa will be closely monitored.