Under an agreement signed by Kenya’s National Treasury in late 2025, the government set out to sell 6 billion Safaricom shares representing 15% of the company to South Africa’s Vodacom Group at KES 34 per share, a direct transaction worth KES 204.3 billion. On top of that, Vodacom agreed to pay a KES 40.2 billion upfront dividend backed by the government’s remaining 20% stake, bringing the total payout to the Treasury to roughly KES 244.5 billion.
If the deal closed, Vodacom’s total holding in Safaricom would rise from approximately 40% to 55%, securing absolute majority control of East Africa’s most profitable corporate asset, while the government’s equity holding would drop from 35% to 20%. Public investors would maintain their 25% free float on the Nairobi Securities Exchange.
The strategic rationale for the government was clear. The stake sale is not just a corporate transaction; it is central to how President William Ruto’s government plans to fund a significant chunk of public spending. With limited room to borrow more or raise taxes further, Kenya turned to selling stakes in state-owned assets, including Safaricom and Kenya Pipeline Company, to finance infrastructure projects under Ruto’s $39 billion development plan, which covers railways, airports, roads, power lines, dams, and irrigation.
How the High Court Froze the Deal
From the moment the deal became public, it attracted fierce opposition. The transaction was frozen when petitioners Tony Gachoka and Fredrick Ogola sued several State agencies, Safaricom, and Vodacom, questioning the legality of the government’s plan to reduce its stake in the telecoms giant. Two other petitions were filed by Paul Maina and a litigant identified only as Mr Samuel, and the two cases were later merged. Former Vice President Kalonzo Musyoka also filed a separate petition and joined proceedings as senior counsel.
On March 23, 2026, Kenya’s High Court issued conservatory orders a judicial freeze blocking any party from taking steps to complete the transaction. The proposed deal, one of the largest telecom transactions in East African history, was left suspended in legal limbo.
The petitioners raised three core arguments: that the proposed sale price was substantially below Safaricom’s estimated market value, that public participation was inadequate, and that the transaction raised broader concerns about the management of state assets and national digital infrastructure. The judges recognised that the sale of a 15% government stake in Safaricom raises critical constitutional issues related to national security, data sovereignty, public participation, and responsible management of public resources. In their ruling, the judges stated, “Court process is not a mere inconvenience, and the proposed sale isn’t immune from judicial review and supremacy of the Constitution.”
A particular focus was M-Pesa, Safaricom’s mobile money platform. Petitioners warned that ceding majority ownership to Johannesburg-headquartered Vodacom risked surrendering sovereign control over the financial data of more than 30 million active Kenyan users.
The Block Deepens: May 2026 Ruling
Far from easing, the legal pressure intensified in mid-May 2026. A three-judge bench appointed by Chief Justice Martha Koome extended the status quo orders that had been in force since March 23, 2026, after petitioners argued that allowing the sale to proceed before the case was fully heard would render any later ruling meaningless. The orders prohibited the National Treasury, Safaricom, and Vodacom from executing any part of the transaction while the constitutional petitions were pending.
The court also rejected an application by Vodafone, Vodacom’s parent company, to be removed as respondents in the case.
The stakes for the government were mounting. The Treasury had originally expected the funds in March 2026. With the freeze still in place, Treasury Cabinet Secretary John Mbadi said the budget would be implemented “in the usual way” with or without the proceeds. But the longer the deal sat in court, the more pressure built on all sides: the government wanted the cash for its infrastructure fund, Vodacom wanted to consolidate Safaricom into its accounts which would more than double its reported EBITDA and Safaricom itself was operating with strategic uncertainty over its majority shareholder.
A side battle also erupted over legal representation. In a ruling delivered on June 9, 2026, the High Court dismissed applications seeking to disqualify lawyers representing the Attorney General and Safaricom PLC. The court held that the applicants had not established any valid legal basis to remove Senior Counsel John Ohaga and advocate Andrew Mukite Musangi from the proceedings, and dismissed all three applications for lack of merit
The Turning Point: Court of Appeal Lifts the Ban
Then came the decisive development. On June 26, 2026, Kenya’s Court of Appeal stepped in and overturned the High Court’s conservatory orders.
The Court of Appeal lifted the conservatory orders that had temporarily halted the government’s planned sale of a 15% stake in Safaricom to Vodacom. The appellate court found that the government had met the legal threshold required for the grant of a stay and concluded that public interest considerations favoured lifting the suspension.
A three-judge bench comprising Patrick Kiage, Lydia Achode, and Aggrey Muchelule ruled in favour of the National Treasury, following an application to unblock the deal. The Treasury had argued that the public interest demanded the sale move forward without further delay.
In the words of the Court of Appeal judges themselves: “Having fully and thoroughly considered this application, we come to the conclusion that it satisfies the two limbs of arguability and nugatory (meaningless), and that the public interest compellingly demands that the stay sought be granted. We accordingly grant it.” The appellate judges ruled that the National Treasury had met the necessary statutory requirements for asset disposal, determining that the economic benefits of the sale outweighed the speculative security concerns.
The Treasury had warned in court filings that a prolonged delay risked the buyer reconsidering, re-pricing, or abandoning the deal entirely a risk now removed by the court’s ruling.
What Happens Next
With the court’s stay lifted, the deal can now proceed, pending final regulatory approvals from Kenyan authorities. Vodacom does not intend to acquire the remaining Safaricom shares and is seeking a regulatory exemption from Kenya’s Capital Markets Authority to avoid that obligation. It is important to note that the underlying constitutional petition has not been dismissed. The Court of Appeal’s ruling lifts the freeze and allows the transaction to close but the full legal challenge continues to be heard by the High Court. This means the saga may not be entirely over.
The broader significance
This case cuts to the heart of a tension every African government face: how do you attract foreign investment and fund development without giving up control of the infrastructure your citizens depend on? Safaricom is not just a phone company it runs M-Pesa, the financial lifeline for tens of millions of Kenyans, which is why courts, opposition leaders, and ordinary citizens treated this like a national security question, not a routine share sale. The Court of Appeal ultimately sided with economic pragmatism, but the constitutional petition lives on, and its outcome will set a powerful precedent for how Kenya and the continent handle foreign acquisitions of critical digital infrastructure for years to come.
