MP Ndindi Nyoro warns Kenya could lose Ksh.80 billion in Safaricom share sale

The controversy over the partial sale of Safaricom shares took a new twist after Kiharu Member of Parliament Ndindi Nyoro told the Joint Committee on Finance and Privatisation that the country stands to lose billions of shillings by not using a competitive international bidding process in the divestiture.

The Kiharu legislator, who urged the parliamentary watchdog not to adopt the government’s proposed process, faulted the Communications Authority for allegedly initiating an Ksh.80 billion loss through a controversial waiver on the renewal of licenses, via a conditional precedent, prior to the transaction.

MP Nyoro, while delivering his submissions, told the parliamentary watchdog that the country would have benefited more had the exercise been subjected to an international competitive bidding process.

"We would just cut corners, sell government assets for free, and purport to be the only buyers in the market… who said he is the only buyer?" Nyoro posed.

The former Chairman of the National Assembly Budget Committee stated that each of the 6 billion Safaricom shares being traded to Vodafone should retail at Ksh.45 per share and not Ksh.34.

"We should not be discussing anything below Ksh.45 per share, but we have been held hostage by the buyer that we are now running out of breath," he said.

The Kiharu legislator informed the joint parliamentary committee on Finance and Privatization that the Communications Authority should be held accountable for allegedly initiating a Ksh.80 billion loss through a controversial waiver on the renewal of licenses via a conditional precedent, prior to the transaction.

"On one license, we are losing Ksh.40 billion due to a discount given only by the management of the Communications Authority. They passed this before the board even met," said Nyoro.

Ndindi Nyoro alleged that parties who stand to benefit from the multibillion-shilling transactional costs in the partial divestiture of the government’s shareholding in Safaricom are private entities.

"What role are they playing for them to be paid 40% of the Ksh.3 billion?" he asked.

Other than the Kiharu MP, other stakeholders who submitted their memoranda included CBK Governor Kamau Thugge.

Thugge told the committees that the proceeds would go a long way in easing the country's debt burden. The sale also received a nod from COTU.