Former Senior Economic Adviser to
the President Moses Kuria has dismissed the growing debate over a possible
Safaricom share sale sparked by Kiharu MP Ndindi Nyoro, arguing that the focus
on the telco is misguided.
He said Nyoro’s remarks distract
from deeper structural problems affecting Kenya’s capital markets.
According to Kuria, the real issue
is the persistent undervaluation of listed companies at the Nairobi Securities
Exchange (NSE), which he described as a long-standing systemic failure.
“Whereas I find the debate on
Safaricom share sale started by my younger brother Ndindi Nyoro interesting, I
think it's the wrong discussion,” Kuria said on X.
“How come most listed companies at
NSE are undervalued by the market?”
He questioned why Safaricom’s share
price had fallen from Sh45 three years ago to Sh34 today despite the company’s
continued profitability.
“Safaricom is not the issue,” he
added, insisting that the bigger challenge is the state of the equities market.
Kuria raised concerns about
liquidity constraints across almost all counters, noting that the NSE—now 71
years old—hosts only 62 listed firms.
“Nothing much has changed for the 33
years since I first joined the trading floor as a trader,” he said.
He called for comprehensive reforms
to stimulate activity, restore investor confidence, and deepen Kenya’s capital
markets, which have faced declining foreign participation, currency volatility,
and subdued local investor appetite.
“The elephant in the room is that
our capital markets need a lot of work,” Kuria said, urging policymakers and
regulators to shift their attention from individual counters to the structural
factors inhibiting market growth.
The debate around Safaricom shares has
intensified following recent public comments by Nyoro, who has been critical of
the decision.
Addressing the press on Thursday,
Nyoro said the government’s move to offload the shares is ill-advised and will
harm public coffers.
The stake—equivalent to
6,009,814,200 ordinary shares sold at Sh34 each—will reduce the State’s
ownership in Safaricom from 35 per cent to 20 per cent.
Nyoro termed the sale a major
financial red flag, noting that the government previously sold shares at Sh45
before investing in Safaricom’s Ethiopia expansion, which was licensed in 2021.
He said the move appears to be
driven by personal interests “at the expense of plunging the country into a
deep financial crisis.”
“There is no way the government can
purport to sell Safaricom at less than Sh2.5 trillion other than if there is
self-interest or incompetence. The government has sided with the buyers and is
going on a major loss,” he noted.
“The government is underselling
Safaricom, and Kenyans are going on losses.”
Under the planned transaction, the
government will receive an upfront payment of approximately Sh40.1 billion for
the right to receive Sh55.7 billion in future Safaricom dividends that would
have accrued to the State on its remaining stake.
