Original article Total Telecom:Read More
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The operator’s largest private shareholder, Vodacom Group, says the carve out would harm Safaricom’s value proposition for customrs
Kenya has a debt problem.
As of June 2025, the country’s public debt stood at KES 11.81 trillion (around $ 91.3 billion), roughly 67.8 % of the country’s GDP. As a result, debt servicing is regularly consuming a huge amount of public funds; in the 2025 financial year, debt servicing cost the country more than healthcare or education.
Loath to increase taxes, the government’s solution to this challenge has been to sell down its stakes in various enterprises, announcing plans earlier this year to raise KES 149 billion (around $1.1 billion) through this method. The most significant of these stake sales relates to Safaricom, the country’s most profitable business, in which the government holds a roughly 35% stake.
By August, the Kenyan government said it was considering a push to split Safaricom into three distinct entities: a telecoms operator, a tower company, and a mobile money business centred around Safaricom’s M-Pesa platform. This, the government said, would allow each unit to be evaluated separately, potentially driving up their value for a potential stake sale.
“We are discussing whether to offload more shares as an entity or split them and then get the fresh valuation, and then get to that direction,” said Treasury Secretary John Mbadi in a Bloomberg report.
The government’s suggestion of spinning off M-Pesa is nothing new. The mobile money platform is one of the world’s most successful, having grown over almost two decades to become a key economic enabler in Kenya. With nearly 38 million users, as of September 2025, and reportedly handling around 59% of the country’s GDP, M-Pesa is a huge moneymaker for Safaricom – and a regulatory headache for the country.
Kenya’s central bank has pushed for the nation’s telcos to separate out their mobile money units for regulatory clarity since at least 2022. Safaricom’s local rivals, Telkom Kenya and Airtel Kenya, have both complied with this directive, but M-Pesa’s carve out has been delayed by a disputed tax liability of around KES 75 billion ($580 million).
Safaricom itself has been reluctant to split off M-Pesa, which today represents almost half of its revenue. This week, the company’s largest private shareholder, Vodacom Group (35% stake), reiterated this sentiment, with CEO Mohamed Joosub highlighting M-Pesa’s synergistic value to Safaricom’s telecoms customers.
“We do not want to list the financial services companies separately because we believe they are closely related to the value proposition we offer to our clients,” he said. “Actually, we envision a closer connection between it and loyalty in the future. We position ourselves as having something quite distinct from a typical telecom company.”
Safaricom’s refusal to carve out M-Pesa underscores the platform’s centrality not only to the operator’s business model but also to Kenya’s wider digital economy. The Kenyan government has a difficult task ahead of balancing its urgent fiscal needs without negatively impacting a service that has become financial crucial infrastructure for millions of people.
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