Safaricom PLC has moved to soothe investor nerves and signal robust financial health by approving a higher interim dividend of Ksh 0.85 per share for the financial year ending March 31, 2026. The announcement, coming amidst a complex macroeconomic environment, represents a significant sweetener for shareholders, up from the Ksh 0.55 paid out in the previous interim period.

The decision by the telco giant’s board is a vote of confidence in its cash flow generation, despite the heavy capital expenditure required for its ongoing expansion into Ethiopia. For the millions of retail investors and the Kenyan government—which holds a 35% stake—this payout is a timely liquidity boost. The dividend will be payable on or about March 31, 2026, to shareholders on the register as of the close of business on February 25, 2026.

Navigating the "Dividend Trap"

This declaration comes at a critical juncture. Market analysts have been closely watching Safaricom’s payout strategy, especially with the looming divestiture of government shares which had raised fears of a "dividend trap"—where the state might lose out on billions if the sale concluded before the declaration. By announcing this payout now, Safaricom has ensured clarity. The higher payout ratio suggests that the company’s core business in Kenya—fueled by M-PESA and data services—remains a cash cow capable of subsidizing the Ethiopian growth engine.

CEO Peter Ndegwa has previously reassured the market of the company's commitment to returning value to shareholders. "We have delivered excellent group performance," Ndegwa noted in recent briefings, pointing to double-digit growth. This dividend is the tangible proof of that performance, defying skeptics who feared the Ethiopian venture would dry up the dividend tap for years.

• The Numbers: A payout of Ksh 0.85 per share translates to billions of shillings flowing back into the economy. For the government, this is non-tax revenue that is desperately needed to plug budget deficits.
• The Dates: Book closure is set for February 25, 2026. Payment date is March 31, 2026. Investors must buy before the book closure to qualify.
• The Trend: This increase from Ksh 0.55 (FY25) to Ksh 0.85 (FY26) signals a return to a more aggressive dividend policy as capex intensity begins to normalize.

Market Implications

The Nairobi Securities Exchange (NSE) is expected to react positively to this news. Safaricom is the bellwether stock of the bourse, and a higher dividend yield makes it an attractive defensive play in a high-interest-rate environment. As the company continues to evolve from a telco to a technology company (TechCo), this payout reinforces its status as a reliable income stock, balancing the risks of regional expansion with the rewards of domestic dominance.

For the average Kenyan investor, the message is clear: the giant is still profitable, and it is sharing the spoils. As the payment date approaches, all eyes will be on whether this momentum can be sustained into the final dividend declaration later this year.