The state’s fiscal desperation has triggered fierce resistance in Parliament. Embakasi East MP Babu Owino’s vocal Safaricom sale opposition is raising political hurdles for President William Ruto’s administration as it seeks to monetize lucrative parastatal stakes to bridge a gaping budget gap. Under the proposed sell-off plan, the National Treasury aims to offload portions of its 35% holding in Safaricom PLC (SCOM) and the Kenya Pipeline Company (KPC) to raise over Sh100 billion. However, critics argue that sacrificing cash-generating national jewels for short-term fiscal relief is a structural mistake.
The fiscal math behind the state's shareholding is compelling. The Treasury holds approximately 14.02 billion shares in Safaricom, representing its 35% stake. With the board declaring a dividend payout of Sh0.62 per share—closing books on July 31, 2026, and paying out on August 31, 2026—this equity asset yields Sh8.69 billion in direct non-tax revenue. Forfeiting this recurring stream for a one-off asset sale highlights the short-sighted nature of current fiscal planning.
At the center of this battle is Embakasi East MP Babu Owino, who has emerged as the most vocal opponent of the transaction. His resistance represents a broader parliamentary consensus that views privatization as a surrender of national sovereignty. This political friction comes at a delicate time when the Central Bank of Kenya is dealing with elevated domestic borrowing costs, with 364-day Treasury bills yielding 16.5%.
THE Q&A PROFILE: Examining the Anti-Privatization Rhetoric
To understand the depth of the resistance, we dissect the public statements and parliamentary strategy of the Embakasi East legislator, focusing on the financial and political arguments driving the debate.
Q: What is the core economic objection to offloading the state's stake in Safaricom?
"Safaricom is a highly profitable commercial enterprise that funds our national budget. Giving up this asset to settle short-term domestic debt is equivalent to selling land to buy groceries. The Sh8.69 billion dividend stream we expect this August is sustainable long-term revenue that we cannot afford to lose."
Q: The National Treasury argues that privatizing blue-chip state assets will unlock immediate liquidity. Is this not a valid stabilization strategy?
"It is a lazy fiscal cop-out. The government is struggling with debt service because of high-interest rates, with T-bills pushing past 16%, but you do not solve a structural debt crisis by selling your most valuable revenue generator. Once Safaricom is gone, what will they sell next year?"
Q: Safaricom’s market capitalization on the Nairobi Securities Exchange (NSE) has faced headwinds. Could a strategic private investor revitalize the stock?
"Any foreign investor coming in under these clouded privatization deals is buying into a legal and political minefield. We will challenge any attempt to bypass public participation or the strict provisions of the Privatization Act in court. If the government forces this sale through, they must prepare for protracted litigation."
Q: Beyond the dividend payouts, are there systemic risks to reducing state ownership in Safaricom?
"Safaricom is the backbone of Kenya's financial inclusion, powered by the M-Pesa ecosystem. Allowing foreign private equity to gain a dominant, unchecked footprint in our national payment system is a severe national security risk. We cannot hand over the keys to our digital economy to profit-driven multinationals."
Political Stakes: Why Safaricom Sale Opposition is Gaining Traction
The resistance spearheaded by Babu Owino is not occurring in a vacuum. It capitalizes on deep-seated public anxiety over tax compliance, rising cost of living, and the implementation of controversial statutory deductions. With inflation anchored at 4.8%, the public has little appetite for seeing lucrative state assets offloaded to foreign entities while domestic taxation intensifies. For a populace already feeling squeezed, the sale of highly profitable public assets to foreign buyers is a highly emotive issue that easily unifies opposition and government-allied backbenchers alike.
From an investment standpoint, the political noise introduces a risk premium on Safaricom’s stock. Institutional investors at the Nairobi Securities Exchange (NSE) closely watch these developments, as prolonged political battles can depress equity valuations and complicate capital-raising efforts. The prospect of legal gridlock under the Privatization Act could stall the Treasury's monetization timeline, forcing the exchequer to rely even more on expensive domestic debt auctions where 182-day T-bills currently demand a 16.2% yield.
For the broader economy, the debate highlights the limits of fiscal adjustment through asset sales. If the Treasury cannot execute its parastatal privatization program due to sustained Safaricom sale opposition, it will have to resort to aggressive tax enforcement or deeper spending cuts. For foreign portfolio managers, the unfolding drama is a stark reminder that in Kenya's vibrant democracy, macroeconomic policy is never purely a technocratic exercise—it is always subject to the loud, unpredictable forces of local politics.
