Nairobi, June 27, 2026 — In a significant legal victory for the Kenyan government, the Court of Appeal has lifted conservatory orders that had temporarily blocked the planned sale of a 15% government stake in Safaricom Plc to Vodacom Group Ltd.
The three-judge bench, comprising Justices Patrick Kiage, Lydia Achode, and Aggrey Muchelule, ruled on or around June 26, 2026, that the government had met the threshold for a stay of execution. They cited public interest considerations, including fiscal stability, infrastructure financing, and investor confidence, while noting that the transaction remains reversible if the main petitions ultimately succeed.
This decision paves the way for the multi-billion-shilling deal to proceed, subject to the outcome of ongoing constitutional challenges and any further appeals to the Supreme Court.
Background of the Deal
The Kenyan government, which holds approximately 35% of Safaricom, announced plans in late 2025 to divest 15% of its shares to Vodacom, Safaricom’s strategic partner. The transaction involves about 6 billion shares at KSh 34 each, valued at roughly KSh 204.3 billion (approximately €1.36 billion or around $1.5–2 billion, depending on exchange rates).
Vodacom is also acquiring an additional 5% stake from its parent company, Vodafone, which would increase Vodacom’s overall holding in Safaricom to 55%. The government’s stake would reduce to 20%, with the remaining 25% held by public investors.
Proceeds from the sale are earmarked for the National Infrastructure Fund, budget support, debt reduction, and long-term national savings. The deal received Cabinet approval, underwent public participation exercises across counties, and was approved by the National Assembly in March 2026 under relevant provisions of the Public Finance Management Act and the Privatization Act.
Safaricom, East Africa’s largest telecommunications company and home to the transformative M-Pesa mobile money platform, generates substantial revenue and dividends for the state. The transaction has been positioned by the government as a strategic move to unlock value from a public asset while retaining significant influence through its remaining 20% stake and board representation.
High Court Halts the Sale
The process faced legal hurdles when petitioners, including broadcaster Tony Gachoka, Prof. Frederick Ogola, and others, filed constitutional petitions challenging the sale. They argued that it violated key constitutional provisions on public participation (Article 10), prudent management of public resources (Articles 201 and 227), transparency, accountability, and national sovereignty.
Key concerns raised included:
- Alleged undervaluation of the shares (petitioners claimed intrinsic value was significantly higher, potentially around KSh 70–80 per share, leading to a substantial loss to the public).
- Inadequate public participation and transparency in the valuation and disposal process.
- Risks to national security, data sovereignty, and control over critical infrastructure (telecommunications, mobile money, and digital payments serving millions of Kenyans).
- The sale to a foreign-controlled entity potentially diluting Kenya’s strategic influence over a national asset.
On May 18, 2026, a three-judge High Court bench (Justices F. Gikonyo, R.E. Aburili, and T.W. Ouya) issued conservatory orders restraining the government, Safaricom, Vodacom, and other respondents from proceeding with the sale pending the full hearing and determination of the petitions. The court found a prima facie arguable case and determined that the balance of convenience and public interest favored preserving the status quo to prevent the petitions from being rendered nugatory.
Court of Appeal Lifts the Freeze
The government appealed to the Court of Appeal, arguing that the High Court orders were overly broad, threatened fiscal planning and infrastructure projects, risked damaging investor confidence, and could lead Vodacom to renegotiate or abandon the deal. They emphasized that the transaction had followed statutory processes, including parliamentary approval, and that any adverse ruling could be remedied through reversal or compensation, as the shares are traceable listed securities.
Safaricom’s counsel supported lifting the orders, highlighting costs to the exchequer and the public benefit of accessing funds promptly.
In its ruling, the Court of Appeal found the government’s appeal arguable on both merits and the risk of nugatory outcome. It concluded that public interest compellingly favored granting the stay, allowing the sale to move forward while the substantive petitions continue. The bench noted that the transaction could still be unwound if the petitioners prevail in the end.
Petitioners’ advocates have indicated plans to challenge the decision at the Supreme Court, citing procedural issues such as service of documents.
Implications and Next Steps
The Court of Appeal’s decision represents a major boost for President William Ruto’s administration’s fiscal consolidation efforts amid budget pressures. It allows the government to access significant funds for priority projects while the legal battle continues on the merits of the constitutional challenges.
For Safaricom and Vodacom, it reduces uncertainty around the deal’s completion, originally eyed for early 2026. The company remains a Kenyan-listed entity with strong local operations, though ownership shifts will alter governance dynamics.
Critics and petitioners maintain that core issues of valuation, transparency, public participation, and strategic national interest deserve full judicial scrutiny. Supporters argue the process was lawful, commercially sound, and in the broader public interest.
The main constitutional petitions remain pending before the High Court. Any Supreme Court intervention could further influence timelines. Regulatory approvals (including from the Capital Markets Authority and Communications Authority of Kenya) were already in advanced stages or secured prior to the court interventions.
This case highlights the tension between government efforts to monetize state assets for development and public demands for rigorous oversight of strategic national resources. As proceedings continue, all eyes remain on Kenya’s judiciary, the National Treasury, and the future ownership structure of one of Africa’s most iconic companies.