Kenya`s government, a major shareholer of Safaricom Plc is considering splitting the company into three firms to boost revenue. However, the plan has not yet been discussed with Safaricoms board.
According to the treasury secretary, John Mbadi, the government, which has a shareholding of 35%, is considering to roll out a plan to split up the company into three firms: mobile money service (M-Pesa), telecommunications firm and a tower operator or even releasing part of its shares so as increase its revenue gain. However, this contrasts with the firm`s view as Safaricom`s Chief Executive Officer (CEO), Peter Ndegwa stated that the government is yet to reach out to the company`s board.
“The Kenyan government and south Africa`s Vodacom group limited, together own about 70% of Safaricom. Still any plan for the reorganization of the Kenyan firm would be led by its board,” CEO Ndegwa said in an interview with Bloomberg TV in New York.
Mr. Ndegwa also mentioned of how talks had been ongoing on whether M-Pesa should split from Safaricom and vice versa but he said, “from a management perspective and from a board perspective, I always said the reason why Safaricom has been successful is because the two are joined.” He further pointed out that the company is not involved in any of the state’s plan to finance its fiscal budget.
Safaricom`s impact on Kenyan government.
Safaricom`s impact on Kenyan government has been signicicant. to date it remains a major source of revenue, having paid KES. 16.8 billion in dividends in 2024. The company has had both financial and economic impact to the state.
