Dear Victor,

Thanks for sharing this issue about Safaricom Stake Sale – Risking Digital Sovereignty for Short-Term Relief.

While the government’s urgency to raise KSh 149 billion to plug the 2025/26 budget deficit is understandable, the plan to sell part of its 35% stake in Safaricom PLC raises serious concerns, not just fiscal, but legal, cybersecurity, and crisis management-related.

Safaricom is far more than a profitable parastatal. It is one of Kenya’s most strategically significant digital infrastructure assets. Its reach extends deep into government services, mobile money platforms, national emergency communications, and citizen data systems. It is, in essence, the backbone of Kenya’s evolving digital state.

For context, Safaricom posted a net income of KSh 69.8 billion for the full year ending March 31, 2025. It declared a dividend of KSh 1.20 per share, amounting to a total payout of KSh 48.08 billion. This means the government’s 35% stake yields over KSh 16.8 billion annually, i.e. reliable, recurring income with no new taxes or debt involved. That is revenue stability we cannot afford to compromise.

From a cybersecurity and legal standpoint, divesting such a stake, particularly through a block sale to private or foreign investors, introduces significant risks:

• Digital sovereignty threats: Safaricom operates critical infrastructure that supports e-citizen services, law enforcement, health messaging, and mobile payment systems like M-Pesa. Transferring control or influence to private or foreign entities exposes the nation to strategic vulnerabilities.

• Data governance and privacy issues: Safaricom handles sensitive citizen data governed by the Data Protection Act, 2019. A change in control must be preceded by a rigorous Data Protection Impact Assessment and clear legal safeguards to prevent misuse or transborder data compromise.

• Crisis response implications: Safaricom plays a crucial role in disseminating emergency alerts and coordinating national crisis responses. Weakening government control over this channel could diminish Kenya’s ability to manage emergencies, including public health and security threats.

The economic argument for the sale also falls short when examined more closely. Kenya’s fiscal pressure stems largely from recurrent expenditures and unsustainable debt servicing and not a lack of valuable public assets. Cutting discretionary spending on non-priority projects like refurbishments, inflated travel budgets, and excessive administrative costs would send a stronger message of fiscal discipline than selling strategic revenue-generating assets.

We must consider alternative approaches including :

• Targeted public IPO: A carefully structured secondary offering, limited to domestic institutional and retail investors, could raise funds while preserving national control. Clauses such as golden shares or national interest protections could be built in.

• Expenditure reform: Rather than liquidate profitable assets, a line-by-line review of non-critical government spending should be conducted to reduce wastage.

• Digital revenue expansion: Safaricom's infrastructure could be used to broaden Kenya’s tax base through digital compliance and informal sector inclusion thus generating revenue without compromising sovereignty.

Ultimately, this proposal sets a troubling precedent. We are contemplating the sale of an asset that generates predictable income, supports over 60% of GDP in mobile money transactions, and undergirds our national e-governance agenda, all in the name of short-term budget relief???

This is not just a financial decision; it is a question of long-term national resilience.

Stay happy,

Mutheu.