By Kepher Otieno - Reporter
Kenya, 4 July 2026 - Kenya's latest partial sale of its stake in Safaricom PLC has become far more than a financial transaction. It has evolved into a test of investor confidence, fiscal policy and political trust.
Treasury Cabinet Secretary CPA John Mbadi has mounted an uncompromising defence of the government's decision to divest part of its shareholding, dismissing critics as political opportunists attempting to undermine a carefully structured economic programme rather than interrogate its commercial merits.
Speaking in Kisumu, Mbadi argued that the sale was not designed to finance recurrent government expenditure but to unlock capital for long-term infrastructure investment. He maintained that proceeds would be channelled into commercially viable national projects through a National Infrastructure Fund, creating productive assets instead of financing day-to-day spending.
His argument strikes at the heart of an enduring challenge confronting many developing economies. Governments often sit on valuable commercial assets while struggling to finance roads, airports and strategic infrastructure. The question is no longer whether states should monetise public assets. It is whether they can convince investors and citizens that the proceeds will generate greater economic value than the shares being sold.
Mbadi insisted that extensive public participation preceded parliamentary approval, describing the exercise as both constitutional and transparent. He argued that the transaction complied with the law and that the government respected judicial authority by suspending implementation after conservatory court orders before proceeding once the appellate process allowed it.
The Treasury chief reserved his strongest criticism for opposition leaders challenging the transaction. He questioned why previous administrations also reduced the government's stake in Safaricom without provoking similar political resistance.
According to Mbadi, the present debate reflects political expediency rather than economic principle.
Yet beyond the political exchanges lies a more significant market question.
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Investors will judge the transaction not by political rhetoric but by execution. Capital markets reward certainty. They punish inconsistency. If the proceeds are invested transparently in infrastructure capable of generating long-term economic returns, confidence in Kenya's fiscal management could strengthen. If not, scepticism surrounding future privatisation programmes will deepen.
Safaricom remains one of East Africa's most profitable listed companies and a cornerstone of the Nairobi Securities Exchange. Any adjustment in government ownership inevitably attracts scrutiny from domestic investors, pension funds and international markets monitoring Kenya's fiscal direction.
Mbadi has therefore tied the government's economic credibility to measurable outcomes. Roads, airports and other public investments funded through the divestiture will ultimately become the benchmark against which this decision is judged.
The controversy also reflects Kenya's broader economic transition. Governments facing constrained revenues increasingly seek innovative financing mechanisms instead of relying solely on taxation and borrowing. Strategic asset recycling has emerged as one such option. Success depends less on ideology than on governance.
For now, the debate has shifted beyond Safaricom's share register. It has become a referendum on how Kenya intends to finance its future growth while balancing public ownership with private capital.
The markets will be watching closely. So will taxpayers.