Kenya’s High Court has blocked Vodacom’s $1.6 billion purchase of a 15 % stake in Safaricom, the country’s largest listed company, overturning a deal that had been finalized only a few months earlier. The ruling declares the sale of the shares by the state unconstitutional and orders that the equity be returned to public ownership without delay.
The transaction was completed on June 30 after the Court of Appeal lifted an earlier injunction that had temporarily halted the process. That completion raised Vodacom’s effective control of Safaricom to 55 %. The state sold the 15 % stake for about KSh204 billion, while Vodacom also secured an additional 5 % from Vodafone. After the sale, authorities kept a 20 % holding.
This decision directly challenges President William Ruto’s drive to monetize state assets as a way to ease debt pressures that have grown amid fiscal deficits. Safaricom’s sale had been a cornerstone of the privatization program, intended to generate cash for public spending and lessen reliance on borrowing. The judgment now forces an unwinding of the arrangement, creating logistical and financial complications such as how to return the equity and manage the proceeds already paid by Vodacom.
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The High Court’s judgment focuses on constitutional breaches, notably the lack of sufficient transparency and public consultation during the sale. It raises broader questions about how Kenya can legally dispose of strategically important assets like Safaricom, which dominates the nation’s digital payments ecosystem through its M-Pay platform and accounts for a major share of trading on the Nairobi Securities Exchange.
The reversal could disrupt the state’s fiscal strategy, which increasingly depends on asset sales to fund infrastructure projects without adding to debt. Future privatizations may now face similar legal challenges, especially for transactions involving widely held or critical assets. For Vodacom, the order introduces uncertainty over its plans to strengthen its position in Africa’s leading mobile-money market.
While the authorities had argued that the Safaricom sale would unlock value and support debt management, the court’s decision highlights the risks of proceeding with major asset disposals without full constitutional compliance. The immediate financial and operational impact remains unclear, but the precedent set by the ruling could reshape Kenya’s approach to privatization for years to come.
