Privatization, Parliamentary Oversight, and the Politics of Infrastructure Financing: Lessons from Kenya’s Safaricom Share Disposal Controversy
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Abstract
Kenya’s decision to divest a 15 per cent government stake in Safaricom PLC to Vodacom Group for KSh. 244.5 billion, whilst simultaneously tabling the National Infrastructure Fund (NIF) Bill 2026, presents one of the most consequential public asset management questions in the country’s post-independence history. This paper critically examines the Safaricom share disposal controversy through three intersecting lenses: fiscal sustainability, institutional governance, and capital market integrity. Drawing on principal-agent theory, new institutional economics, and the literature on frontier market fragility, the paper argues that the transaction, as concluded, prioritizes short-term fiscal relief over long-term revenue sustainability, proceeds through a process insufficiently accountable to Parliament, and introduces systemic risks to Kenya’s fragile capital market ecosystem. The National Infrastructure Fund Bill 2026, whilst architecturally ambitious, contains critical institutional gaps particularly the concentration of performance evaluation, investment policy approval, and government support measures in a single executive office which risks replicating rather than reforming Kenya’s historically opaque infrastructure procurement culture. Drawing on comparative evidence from Nigeria’s NITEL privatization, Ghana’s telecommunications divestiture, and Tanzania’s TTCL experience, the paper situates Kenya within a broader continental pattern of executive-driven, politically timed asset disposals that frequently underperform on both fiscal and developmental objectives. The paper concludes with targeted policy recommendations for Parliament, the National Treasury, and the Capital Markets Authority
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