The Central Bank of Kenya (CBK) has formally supported the government’s plan to divest a 15% stake in Safaricom, a move valued at $1.6 billion, framing it as a strategic measure to reduce the country’s rising public debt.

The backing, announced in January 2026, positions the sale as a key source of non-debt financing for priority infrastructure projects.

Under the plan, the government will sell part of its 35% holding to South Africa’s Vodacom Group, raising capital without adding further pressure on domestic credit markets.

CBK Governor Kamau Thuge emphasized that the decision reflects Kenya’s current macroeconomic realities, noting that public debt stood at 68.9% of GDP as of September 2025, up 67.7% of GDP in June 2025.

“By avoiding a further build-up of debt, this innovative financing will help us move towards a sustainable debt position, and to our debt anchor of 55% NPV-of-debt relative to GDP,” Governor Thuge said.

CBK expects the transaction to increase foreign exchange reserves, stabilize the exchange rate, reduce domestic borrowing, and support lower interest rates.

The deal includes Vodacom paying roughly $0.27 per share for 6.01 billion shares, representing a 23.6% premium over the six-month volume-weighted average price as of December 2025.

The government will also receive $314 million upfront via a dividend-secured loan, accelerating liquidity for immediate needs. Total potential inflows, including dividend monetization, could reach approximately $1.9 billion.

Additionally, the government will receive an upfront payment of approximately $314 million (Sh40.2 billion) as a dividend-secured loan, pulling future income into the present to meet immediate liquidity needs.

Despite the CBK's endorsement, the sale has faced political friction. Some lawmakers have labelled it a sovereign surrender of Kenya’s digital ecosystem.

However, Safaricom CEO Peter Ndegwa reassured a joint parliamentary committee on January 19, 2026, that the telco’s operational core remains in Nairobi.

"Safaricom remains subject to oversight by the Communications Authority of Kenya, the Central Bank of Kenya, and the Capital Markets Authority," Ndegwa stated, emphasising that the deal is a shareholder-level restructuring that won't change management.

To protect national interests, the agreement includes strict conditions intended to preserve the Kenyan identity of the firm.

The Chairman and CEO must remain Kenyan citizens, and the government will retain a 20% strategic stake along with two board seats. Furthermore, the CBK maintains full authority over M-Pesa, ensuring that its role as a national utility is not compromised by the change in shareholding levels.

The transaction is moving into its final stages following the conclusion of public participation on January 8, 2026. Before the final share transfer, the deal requires a green light from other regulators, including the Central Bank for M-Pesa oversight, the Competition Authority of Kenya, and the COMESA Competition Commission. The government expects to finalize the transfer by mid-2026.