Treasury's Safaricom Divestment Moves Forward After Appeal Win

The Court of Appeal has recently suspended High Court orders that had halted the Kenyan government’s planned sale of its 15% stake in Safaricom Plc, allowing the transaction to move forward as the legal battle over the deal continues.

In a ruling, the appellate court granted an application by the National Treasury, the Ministry of Information, Communications and the Digital Economy, the Attorney General and other state agencies seeking to lift conservatory orders that had frozen the proposed divestiture. The judges held that the government had raised arguable grounds on appeal and that maintaining the High Court orders could undermine the intended appeal.

The dispute stems from constitutional petitions filed by political commentator Tony Gachoka and other petitioners, who questioned the legality, transparency and public participation surrounding the government’s decision to dispose of its shares in Safaricom. In May 2026, the High Court issued conservatory orders preventing the state from selling, transferring or otherwise disposing of the shares until the petitions were fully heard and determined.

Further, the government argued before the Court of Appeal that the injunction had stalled a transaction with far-reaching economic consequences. According to court filings, the proposed sale is expected to generate about KSh204.3 billion from the share disposal, alongside an upfront payment of KSh40.2 billion in place of future dividend earnings.

State lawyers told the court that the proceeds are intended to support the national budget, finance infrastructure projects, strengthen fiscal stability and contribute to the Sovereign Wealth Fund. They also argued that the transaction would boost foreign exchange reserves by attracting significant foreign investment while improving investor confidence in Kenya’s economy.

The government further warned that continued delays could jeopardize the deal, saying the prospective buyer could seek to renegotiate the terms, postpone the acquisition or abandon the transaction altogether. It also claimed that the Treasury was losing an estimated KSh70 million daily in potential investment returns because of the suspended sale.

The petitioners, however, maintained that the proposed transaction raises constitutional concerns that should be resolved before any sale proceeds. They argued that the process lacked adequate public participation and transparency, while also claiming that the proposed price of KSh34 per share undervalued the government’s stake and could result in increased foreign ownership of a strategically important telecommunications company.

In its decision, the Court of Appeal acknowledged that the constitutional issues raised by the petitioners remain significant. However, the judges found that allowing the transaction process to continue would not permanently prejudice the case, noting that any completed sale could still be reversed through appropriate legal remedies if the petitioners ultimately succeed before the High Court.

The court therefore stayed the conservatory orders pending the hearing and determination of the government’s appeal, finding that the balance of public interest favored allowing the transaction to proceed while the constitutional challenges continue to be litigated.

The judges also directed that the costs of the application will be determined after the appeal is concluded.

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