Finance Bill 2025: Govt to Sell Safaricom Stake after Foregoing Tax Increases in New Law
- President William Ruto's administration is seeking new avenues to finance the budget after foregoing tax increases in the Finance Bill 2025
- Treasury Cabinet Secretary (CS) John Mbadi revealed plans to offload most of the government's stake in Safaricom PLC
- The Treasury expects to raise KSh 149 billion from the privatisation of state enterprises before the end of the financial year starting July 2025
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Wycliffe Musalia has over six years of experience in financial, business, technology, climate, and health reporting, providing deep insights into Kenyan and global economic trends. He currently works as a business editor at TUKO.co.ke.
President William Ruto's administration is planning to sell the government's mega stake in Safaricom PLC.
Source: Facebook
The National Treasury plans to raise KSh 149 billion from the privatisation of state enterprises before the end of the financial year starting July 2025.
Why govt plans to sell Safaricom stake
Treasury Cabinet Secretary (CS) John Mbadi revealed plans to sell most of the state's stake in Kenya's leading telecommunications firm to raise part of the money.
According to Business Daily, Mbadi said the funds raised through the sale of shares in the telco will help finance the KSh 4.2 trillion budget for 2025/26.
Mbadi said the Finance Bill 2025 is friendly as it aims at putting money in the pockets of the common mwananchi.
In 2008, the government first sold 10 billion shares or a 25% stake in Safaricom via an initial public offering (IPO), raising KSh 51.75 billion.
The intended sale comes after former Budget and Appropriation Committee chair and Kiharu MP Ndindi Nyoro advised the Treasury to consider selling stakes in Safaricom and other state entities to manage public debt.
Source: Twitter
How much will government get from Safaricom sale?
If the Treasury plan goes through, it will be one of the biggest sales in the region, estimated to earn about KSh 79.7 billion for the sale of a 10% stake at the current share price of KSh 19.9.
On the lower side, if the state manages to sell 5%, the Treasury will pocket around KSh 39.8 billion.
The Treasury holds a 35% stake in Safaricom PLC, valued at about KSh 280.5 billion.
Which other firm will govt sell?
The proposal to sell Safaricom PLC shares comes after President William Ruto signed the Privatisation Bill 2023 into law.
About 11 firms were put on the privatisation list, with CS Mbadi confirming that the Kenya Pipeline Company (KPC) is ready for sale through an IPO.
Mbadi said the entity has been making a profit and is in the ranks of a private company, noting that the Treasury has signed some papers.
This is after KPC paid KSh 3 billion interim dividends to the National Treasury for the half year ended December 31, 2024.
The listing of the firm at the Nairobi Securities Exchange (NSE) via initial public offering (IPO) is expected to be the first since 2015.
KPC said the move will unlock greater value from its investments as it cements Kenya's position as a leading regional financial services hub.
Proofreading by Mercy Nyambura, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
