Kenya is preparing to sell part of its 34.9% stake in Safaricom as it seeks to raise $1.1 billion (KES 149 billion) through privatisation, aiming to shore up public finances without introducing new taxes in a struggling economy.

The planned divestiture is expected before the end of the 2025/26 fiscal year and would be the country’s largest in nearly two decades and a significant shift from its previous reluctance to reduce its holding in the region’s most profitable company. The move could attract interest from Africa-focused institutional investors and private equity firms seeking reliable telecom assets.

“There is talk that if we could offload more of our ownership of Safaricom, we are likely to raise the Sh149 billion through privatisation,” Treasury Cabinet Secretary John Mbadi told Business Daily.

Safaricom, buoyed by M-Pesa and data services, posted a net profit of $540 million (KES 69.8 billion) in 2024, including earnings from its Ethiopia unit. It declared a dividend of $0.009 (KES 1.20) per share, yielding $130.5 million (KES 16.8 billion) for the government.

Kenya’s last major Safaricom sale was a 25% stake in its oversubscribed 2008 IPO. Today, its remaining holding is worth around $2.1 billion (KES 280.5 billion), based on a share price of $0.15 (KES 19.9).

Privatisation efforts have long faltered due to political and bureaucratic hurdles. But mounting debt has heightened urgency. In just eight months of the current fiscal year, interest payments reached $5.5 billion (KES 722 billion), consuming more than half of total tax revenue.

Public debt has ballooned to $88.5 billion (KES 11.4 trillion), up $20.8 billion since President Ruto took office. With limited room for further borrowing or tax increases, selling profitable assets like Safaricom has become a necessary fiscal lifeline.