Kenya moves to split Safaricom as debt pressures mount

August 21, 2025

Kenya moves to split Safaricom as debt pressures mount

Kenya is considering splitting Safaricom, its largest listed company, into three separate units.

The potential structure would see Safaricom operate as an independent telecommunications firm, a tower operator, and M-PESA, its widely used payments platform.

The move follows an assessment carried out by regulators.

Kenya’s National Treasury holds a 35% stake in Safaricom, which is also partly owned by South Africa’s Vodacom Group Ltd. Safaricom is currently estimated to carry a debt of 75 billion shillings ($580.5 million) linked to a tax situation that is gradually approaching conclusion.

Treasury Secretary John Mbadi revealed the plan during an interview in Nairobi, according to Bloomberg.

In May 2025, the government also announced plans to reduce its ownership in Safaricom as part of a wider divestment strategy. It expects to raise KSh 149 billion ($1.16 billion) during the 2025/26 fiscal year through the sale of stakes in state-owned enterprises.

The move comes as debt servicing costs weigh heavily on public finances. Between July 2023 and February 2024, Kenya paid $5.5 billion (KES 722 billion) in interest, which amounted to more than half of total tax revenues for the period.

Projections suggest interest payments could rise above $7.7 billion (KES 1 trillion) by the end of 2025, pushing the government to explore alternative revenue options.

Safaricom remains one of the country’s most valuable assets, largely driven by the strength of M-PESA. In 2024, the company recorded an 11 percent rise in net earnings, reaching $540 million (KES 69.8 billion), supported by growth in Ethiopia.

Additionally, the government received a dividend payout of KES 16.8 billion ($130.5 million) from its shareholding.

The company has continued to post strong results in 2025. In May, its revenue crossed the $3 billion mark for the first time in Kenya and the wider region.

Safaricom has also expanded its 5G network across all 47 counties, covering 14 percent of the population. It recently launched M-PESA Go and entered into collaborations with leading retailer partners and iXAfrica Data Centres to enhance its service offerings.

While its Ethiopian operations have faced early challenges, Safaricom remains optimistic. According to CNBC Africa, the company expects losses in the market to decline significantly soon.

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