The National Treasury is walking a tightrope as professional accountants blow the whistle on the controversial single-bidder sale of the government’s 15% stake in Safaricom. The Institute of Certified Public Accountants of Kenya (ICPAK) has termed the valuation methodology "opaque," warning that taxpayers could be losing billions in a deal that smells of desperation rather than strategy.

At the heart of the storm is the Treasury’s decision to bypass competitive bidding and sell the stake directly to a strategic investor—widely understood to be the Vodafone/Vodacom consortium—at Sh34 per share. While the government expects to raise Sh204.3 billion to plug a gaping budget deficit, financial experts argue the price is a "discount sale" that ignores the telco’s historical performance and future dominance.

The "Optimal Value" Myth

"Why Sh34?" asked ICPAK Chairperson Prof. Elizabeth Kalunda during a heated session with the Parliamentary Finance Committee. [...](asc_slot://start-slot-3)"Safaricom shares traded at a high of Sh44.70 just a few years ago. By locking out other bidders and avoiding the open market, the Treasury has failed the basic test of price discovery. You cannot claim optimal value when you are only talking to one buyer."

Treasury Cabinet Secretary John Mbadi defended the move, arguing that dumping 6 billion shares on the Nairobi Securities Exchange (NSE) would cause a market crash ("Economics 101"), and that a strategic investor brings hard currency. However, MPs are skeptical, questioning why the sovereign wealth fund option or a gradual retail release was not explored.

Economic Implications

• Loss of Control: Critics warn that selling this stake to the existing majority shareholders (Vodafone/Vodacom) effectively cedes total control of Kenya’s most strategic asset to foreign entities, diluting the government’s say in national security and M-PESA infrastructure.
• Desperate Measures: The rush to sell suggests a government cash crunch so severe that it is liquidating "family silver" to pay recurrent expenditure. "This is like selling your dairy cow to buy milk," remarked one committee member.

As the debate rages, the shadow of past privatization blunders looms large. With the deal set to be fast-tracked, Kenyans are left wondering if their most profitable company is being sold for a song to satisfy immediate debt pressures.