The government’s sale of a 15% stake in Safaricom to Vodacom has been thrown back into uncertainty after the High Court declared the transaction unlawful, invalid, and without legal effect.
The case was brought by four petitioners, veteran journalist and activist Tony Gachoka, Prof. Fredrick Onyango Ogola, Paul Maina Mugo, and Samuel Kahara Macharia.
They challenged the Government’s plan to sell part of its Safaricom stake to Vodacom, arguing that the transaction raised constitutional questions around the disposal of a strategic national asset, valuation, public participation, and foreign control of critical infrastructure.
The High Court ultimately agreed with key parts of their challenge, quashing the Government’s actions connected to the sale and ordering that the 15% stake be restored to the government.
That does not mean the shares will immediately move back to the state.
The Next Battle Is Likely to Be in the Appeal Courts
Vodacom, the government, and other affected parties can challenge the judgment and seek a stay of execution while the appeal is heard.
Crucially, however, by the time of the High Court ruling, the sale had already gone through on June 30, 2026, after the Court of Appeal lifted orders that had stopped it.
Vodacom subsequently increased its effective Safaricom holding to about 55%, while the government’s stake fell to 20%.
A stay would allow the current ownership structure to remain in place while the appeal proceeds. It would not overturn the High Court judgment. If the appeal eventually succeeds, Vodacom would retain its majority position.
If the judgment survives the appeals process, the 15% stake would have to be returned to the government, potentially taking Vodacom’s effective holding back to about 40%, assuming the separate restructuring remains intact.
The Money Creates Another Problem
The government received about KES 204.3 billion for the 15% stake.
If the sale is ultimately reversed, the parties will have to work out how that money is returned and how other parts of the transaction are unwound.
That could include dividends, transaction costs, accounting entries, and the separate arrangement through which the government received an upfront payment in exchange for future dividend rights.
This is therefore no longer simply a question of who owns 15% of Safaricom. It could become a complicated exercise involving the government, Vodacom, Safaricom, regulators, shareholders, and financial advisers.
Why Public Participation Matters Beyond Safaricom
The ruling could have consequences well beyond this particular transaction. The court said the government did not follow the required process, especially on public participation and the disclosure of key transaction details.
It also raised concerns around valuation, national security, and the effective transfer of control of a strategic company. That places greater pressure on the government’s wider program to sell or restructure public assets.
It always comes back to public participation.
Kenya has seen several government projects and decisions run into trouble in court because citizens, affected communities, or other stakeholders argue that they were not properly consulted.
Public participation is therefore not simply a procedural step to complete before a project moves ahead. Courts can treat it as a constitutional requirement.
Safaricom’s Business Continues, but Ownership Is Unsettled
Customers should not expect the judgment to disrupt Safaricom’s mobile, M-Pesa, broadband, or enterprise services. The company remains operational.
The bigger question is control.
Vodacom’s 55% position gave it majority control and allowed it to consolidate Safaricom in its financial statements. If the 15% sale is reversed, that majority stake disappears.
That could affect board control, financial reporting, shareholder rights, and strategic decisions, although none of these changes should be assumed until the legal process is complete.
What to Watch Now
The immediate developments will be whether the affected parties obtain a stay, whether they appeal the judgment, and whether the Court of Appeal allows the current ownership structure to remain in place during that process.
The treatment of the KES 204.3 billion sale proceeds and the future-dividend arrangement will also matter.
For the government, the ruling is a major setback to its asset sale and National Infrastructure Fund plans. For Vodacom, the biggest risk is losing majority control of one of its most important African assets.
