Court Keeps Block on Safaricom Stake Sale to Vodacom, Stalling KES 244.5B Treasury Windfall

Published: 2026-05-19T20:48:48 · Updated: 2026-05-19T18:48:48Z

The High Court of Kenya has extended its freeze on the state's controversial plan to offload a 15% stake in Safaricom to South Africa’s Vodacom Group. The decision keeps what would be one of East Africa's largest corporate transactions entirely deadlocked.

A three-judge panel, appointed by Chief Justice Martha Koome, maintained the status quo order originally issued on March 23, 2026. The judges agreed with petitioners that letting the multi-billion-dollar deal proceed before a full constitutional review would make any future court ruling completely redundant.

With the National Treasury, Safaricom, and Vodacom legally blocked from moving forward, Vodacom Group CEO Shameel Joosub recently acknowledged the reality to investors, noting that the telecom giant is essentially "in the court’s hands" for the foreseeable future.

The Blueprint of the Deal

Originally inked in late 2025, the proposed deal involves a massive transfer of equity and cash:

The Share Sale: The Kenyan government agreed to sell 6 billion Safaricom shares (a 15% stake) directly to Vodacom at KES 34 per share, totaling KES 204.3 billion.
The Dividend Payout: On top of the share purchase, Vodacom agreed to hand over an upfront dividend of KES 40.2 billion backed by the state's remaining 20% equity.
The Total Windfall: The transaction would inject roughly KES 244.5 billion into the National Treasury, which President William Ruto has earmarked for the newly minted National Infrastructure Fund to build roads, water, and energy systems.

If the transaction eventually clears, the state's ownership drops to 20%, while Vodacom's total holdings would climb to roughly 55%. This would give the South African firm outright majority control of Kenya's telecom kingpin for the first time since Safaricom went public in 2008.

Why the Transaction is Facing Aggressive Legal Pushback

The ongoing court battle consolidates three separate petitions led by high-profile figures, including Tony Gachoka, Professor Fredrick Ogola, and Wiper Party leader Kalonzo Musyoka acting as senior counsel. Former Nairobi Governor Mike Sonko has also petitioned to join the fray.

The legal challenge rests on three heavy-hitting arguments:

Severe Undervaluation: Critics claim the KES 34 per share price tag is a steal, arguing that Safaricom’s true intrinsic value sits closer to KES 70 or KES 80 per share.
Lack of Transparency: Petitioners argue the Treasury completely bypassed Article 10 of the Constitution by failing to conduct legitimate public participation, while also violating Article 227's strict rules regarding the disposal of public assets.
National Security Risks: The most serious concern involves data sovereignty. Activists argue that handed-over control of Safaricom—which manages M-Pesa and anchors crucial state platforms like e-Citizen—to a foreign multinational poses a direct threat to Kenya's national security.

In defense, Safaricom, the National Treasury, and the Attorney-General have urged the court to look at the deal as a standard commercial transaction, warning that prolonged delays risk tanking investor confidence and distorting the local stock market.

The Bottom Line: What Happens Next?

For everyday consumers, nothing changes. Safaricom's networks are up, M-Pesa is running normally, and the stock remains active on the Nairobi Securities Exchange.

The real pain point is financial and strategic. Treasury Cabinet Secretary John Mbadi has insisted that the national budget will move forward with or without the money, but the state is visibly eager for the infrastructure cash. Meanwhile, Vodacom is desperate to consolidate Safaricom into its books to nearly double its reported earnings.

Ultimately, the High Court faces a landmark question: Is Safaricom just another listed company up for sale, or is its role in Kenyan society so vital that selling it demands a much higher constitutional standard? Until the bench answers, the deal remains frozen.