Kenya is considering splitting Safaricom into telecom, M-Pesa, and tower units. CEO Peter Ndegwa says the board hasn’t been engaged on the proposal yet.
Kenya’s government has not yet opened formal discussions with Safaricom Plc about a potential plan to split the company into separate units, according to Chief Executive Officer Peter Ndegwa.
The remarks come after Treasury Secretary John Mbadi said last month that the state— which owns a 35% stake in Safaricom— is weighing options to raise revenue. These include breaking up the company into three parts: its telecoms business, the mobile-money service M-Pesa, and a tower operator, or alternatively offloading part of its stake.
“There hasn’t been any engagement with the board yet,” Ndegwa told journalists in Nairobi, emphasizing that the company continues to run as a single entity.
Government Eyes New Revenue Streams
Mbadi’s comments highlighted the pressure the government faces to boost revenues amid rising debt repayments and widening fiscal gaps. He suggested that splitting or partially privatizing Safaricom could unlock fresh resources for the exchequer.
Safaricom is not only Kenya’s most valuable listed firm but also a crucial source of government dividends. Any structural changes would have major implications for investors, regulators, and millions of customers.
M-Pesa at the Center of the Debate
Analysts say the M-Pesa platform, which dominates Kenya’s mobile-money market, is likely the most attractive unit if a split occurs. The service processes nearly half of Kenya’s GDP annually through mobile transactions, making it a key driver of financial inclusion and government tax receipts.
Separating M-Pesa into a standalone business could allow more direct regulation by the Central Bank of Kenya, which has previously voiced concerns over systemic risks linked to its size.
Beyond Kenya, Safaricom has also expanded into Ethiopia, where it launched mobile services in 2022 and already counts millions of subscribers. Analysts believe this regional growth makes the company a strategic asset not just for Kenya but for East Africa as a whole.
A breakup could complicate Safaricom’s regional ambitions by fragmenting decision-making and slowing expansion plans.
What Happens Next?
For now, Safaricom’s board and management remain uninvolved in the government’s deliberations. Market watchers expect any concrete proposal to face scrutiny from regulators, Parliament, and investors at the Nairobi Securities Exchange.
Despite the uncertainty, Ndegwa struck a measured tone. “Our focus remains on serving customers and creating value for shareholders,” he said.
Whether Kenya chooses to split, sell, or keep its stake in Safaricom, the decision will shape the future of the country’s largest corporate taxpayer and its role in the wider African digital economy.