A Kenyan High Court has extended a freeze on the proposed sale of a 15 percent government stake in Safaricom to South Africa's Vodacom Group, leaving one of the largest telecom transactions in East African history suspended in legal limbo. The ruling keeps in place conservatory orders first issued on March 23, 2026, meaning Kenya's National Treasury, Safaricom, and Vodacom are barred from taking any steps to complete the transaction until a constitutional petition against it is fully heard and decided.

What the Deal Involves

The proposed transaction would see Vodacom increase its effective ownership of Safaricom from roughly 35 percent to 55 percent, giving the South African operator majority control of the company behind M-Pesa, East Africa's dominant mobile money platform. The deal, valued at approximately $2.1 billion, also includes a $311 million upfront payment to the Kenyan government in lieu of future dividends. It had already secured parliamentary approval in March 2026 and cleared the COMESA Competition Commission before the court intervened.

Why the Court Intervened

A three-judge bench comprising Justices Francis Gikonyo, Roselyne Aburili, and Tabitha Ouya ruled that the petition raises significant constitutional questions that merit a full hearing. In their ruling, the judges stated that the shares being divested are not private holdings in the ordinary commercial sense, describing them instead as public assets held by the state on behalf of Kenyan citizens. The court rejected arguments that the dispute was a purely commercial matter and declined to remove Vodafone and Vodacom as respondents in the case.

Petitioners, including former Vice President Kalonzo Musyoka, have argued that the proposed sale price is substantially below Safaricom's estimated market value, that public participation was inadequate, and that the transaction raises broader concerns about the management of state assets and national digital infrastructure.




The Financial Fallout

The court freeze has delayed a KES 244.5 billion windfall the Kenyan Treasury had planned to channel into a National Infrastructure Fund created by President William Ruto in March 2026 to finance roads, energy, and other development projects. While the freeze continues, the government will keep collecting dividends on the full 35 percent stake. Based on Safaricom's recently declared payout of KES 2 per share for the financial year ended March 2026, the government stands to retain approximately KES 16.1 billion that would otherwise transfer to Vodacom under the revised ownership structure.

What to Watch

Vodacom Group CEO Shameel Joosub told investors in an earnings call on May 11 that if the conservatory orders are not lifted, the court case could take several more months. For Nigeria's telecom and investment communities, the case is a significant reminder that foreign acquisition of controlling stakes in nationally strategic digital infrastructure faces a different regulatory and legal terrain in Africa than it might elsewhere.