Govt to appeal nullification of Safaricom stake sale to South Africa’s Vodacom

Nairobi, Kenya (Sept 16, 2024) – The Government plans to challenge a High Court ruling that deemed the sale of its 15 percent stake in Safaricom to South Africa’s Vodacom Group as unconstitutional. Treasury Cabinet Secretary John Mbadi affirmed that the Treasury adhered to proper procedures, securing approval from Cabinet and Parliament before the partial shareholding sale.

Mbadi expressed confidence that the process conformed to the law and financial management practices suitable for the country’s fiscal circumstances. He emphasized that the divestiture aimed to unlock value for the government while preserving the strategic significance of Safaricom, which serves over 50 million Kenyans. The National Treasury is currently reviewing the judgment and intends to raise legal objections to the court’s decision.

Following the ruling on Tuesday, a three-judge High Court panel ordered the 15 percent stake to be returned to the State, citing constitutional concerns such as data sovereignty, public involvement, and other issues. Vodacom has also announced its intention to appeal the judgment at the Court of Appeal and seek a temporary injunction to prevent the sale’s enforcement until the appeal concludes.

The transaction, valued at approximately Sh204 billion, has been subject to multiple legal challenges. Initially, High Court Judge Lawrence Mugambi suspended the sale in March 2024 after receiving complaints from Fredrick Ogola and Tony Gachoka, who questioned aspects of the deal. The Court of Appeal subsequently overturned the High Court’s orders, enabling the sale to go ahead.

Mbadi stated that the revenue generated from the sale would be utilized to provide initial funding for the proposed National Infrastructure Fund and Sovereign Wealth Fund.