By benadeta mwaura - Reporter
Kenya, January 22, 2026 - Kenya’s foreign exchange reserves, the money the country keeps in foreign currencies to pay for imports, could rise sharply if the government goes ahead with selling part of its stake in Safaricom PLC to the Vodacom Group.
The Central Bank of Kenya (CBK) told Parliament that the planned sale could push reserves to about Sh1.84 trillion by 2026, enough to cover 6.2 months of imports, up from the current 5.3 months (Sh1.6 trillion). This level is comfortably above the statutory minimum of four months and the East African Community threshold for macroeconomic stability.
“The increase in reserves will help support a stable exchange rate, which in turn will help contain imported inflation and support the Central Bank’s price stability mandate,” CBK Governor Kamau Thugge told lawmakers.
Forex reserves are not just numbers on a balance sheet, they have real-life impacts that touch everyday Kenyans.
One of the most important roles they play is in stabilizing the Kenyan shilling.
When reserves are healthy, the Central Bank can meet demand for foreign currency, preventing sudden drops in the shilling’s value.
This matters because a weaker shilling makes imported goods more expensive, from electronics to essential medicines, directly affecting household budgets.
Strong forex reserves also help control inflation, particularly for items Kenya relies on imports for, like fuel, medicines, and industrial machinery.
By ensuring the country can pay for these goods without depleting reserves, the Central Bank can maintain price stability and prevent rapid cost increases that often hit the poorest hardest.
Finally, robust reserves reduce the government’s reliance on borrowing from local banks. When the government borrows less domestically, it eases pressure on interest rates, which benefits businesses seeking loans to expand and ordinary Kenyans looking for affordable credit.
In essence, higher reserves create a buffer that protects both the economy and everyday life, providing stability in an otherwise unpredictable global market.
With the Safaricom stake sale, Kenya expects to earn over Sh240 billion, plus about Sh39.86 billion in upfront payments tied to future dividends.
Currently, the government holds 35% of Safaricom. The plan would reduce this to 20%, while Vodafone-Vodacom increases its stake to 55%.
Despite the inflows, the sale has faced criticism. The Consumer Federation of Kenya (COFEK) wants Parliament to block the deal, warning that it hands a strategic national asset, including the M-Pesa platform, to foreign control.
Treasury Cabinet Secretary John Mbadi dismissed these fears, saying that national interests are protected through regulation, not ownership.
More from Kenya
Safaricom CEO Peter Ndegwa assured lawmakers the company will retain its Kenyan identity, brand, and operational independence despite the shift in shareholding.
If the Safaricom stake sale goes through, ordinary Kenyans could feel its impact in several ways. First, it could lead to more stable prices on imported goods.
With increased foreign exchange reserves, the country can pay for essential imports like fuel, machinery, and medicines without putting pressure on the shilling, which helps keep everyday costs from spiking.
Second, the sale could contribute to a stronger Kenyan shilling, which directly protects savings and purchasing power.
A stable currency ensures that the money in people’s pockets and bank accounts does not lose value rapidly, making it easier for households to plan and manage their finances.
Finally, a larger forex buffer may allow the government to borrow less from local banks, potentially bringing down interest rates.
Lower rates would benefit both businesses and individuals, making loans for investment, education, or personal needs more affordable.
In short, the sale has the potential to strengthen the economy in ways that ripple down to everyday life, from the price of goods to the cost of borrowing.
But there are risks. Critics worry about foreign control of strategic assets and the precedent it sets for future sales of national companies.
The Safaricom divestment could be a win for Kenya’s macroeconomy, giving the country a bigger cushion to manage imports and maintain stability.
But it also raises questions about ownership, transparency, and long-term strategy, issues that go beyond balance sheets and into everyday life.
More from Kenya
Tea Factories Review Green Leaf Payments After Farmers’ Push for Higher Rates
Jan 22, 2026
Business
Read more →
Global Trade Patterns Shift at Davos as World Adjusts to U.S. Tariff Policies
Jan 22, 2026
Business
Read more →
World Bank Pledges Sh5.5 Billion for Kenya’s Green Projects as Climate Finance Momentum Builds
Jan 22, 2026
Business
Read more →