By Kirmi Mbogo<\/em><\/p>\n\n\n\n A little over six weeks after Safaricom’s shareholders approved a total dividend of KSh2.00 a share, KSh80.1bn in all, a Nairobi court ruled against the sale that made Vodacom the company’s controlling owner. The High Court, on 15 September, called the government’s 15 per cent sale “a camouflage merger or acquisition and takeover”. Vodacom remains the registered holder of the shares while an appeal proceeds. <\/p>\n\n\n\n Peter Ndegwa, Safaricom’s chief executive since April 2020, has therefore ended his best financial year inside an ownership dispute he did not start and cannot settle. A fair test of his tenure asks which results came from his decisions and which from conditions he inherited or could not control. This profile relies on his public statements and published accounts.<\/p>\n\n\n\n What he inherited<\/strong><\/p>\n\n\n\n The board appointed him from Diageo, where he ran continental Europe. He had been finance director of East African Breweries and chief executive of Guinness Nigeria. He began his career at PwC. His predecessor, Bob Collymore, had built Safaricom into East Africa’s most profitable company, thanks to M-Pesa.<\/p>\n\n\n\n That inheritance still dominates the numbers. M-Pesa brought in KSh182.7bn in the latest year, 45.6 per cent of Kenyan service revenue. Safaricom holds 66.8 per cent of Kenya’s GSM market. Neither is Mr Ndegwa’s creation, and any account of his record that credits him with Kenya’s profits should be read with that in mind.<\/p>\n\n\n\n The strategic choice: Ethiopia<\/strong><\/p>\n\n\n\n The Ethiopian decision was not his alone. Before he took over, Michael Joseph, who ran Safaricom on an interim basis, had framed the choice as buying into state-owned Ethio Telecom or seeking a licence. What fell to Mr Ndegwa was the price and the execution.<\/p>\n\n\n\n In May 2021 a Safaricom-led consortium bid US$850m (KSh91.8bn) for Ethiopia’s first private national licence. It beat a group led by MTN, whose US$600m offer Ethiopian officials judged too low. That is a 42 per cent premium over the loser, by the Ledger’s calculation. Safaricom holds an effective 55.7 per cent of the consortium, with Sumitomo, CDC Group (now British International Investment) and Vodacom as partners. Investors approved: Safaricom’s market value rose by KSh90.1bn on the first trading day after the award.<\/p>\n\n\n\n The promised returns were large. Mr Ndegwa spoke of at least a million jobs in the first few years and support for three to four million small businesses. Ethiopian media reported that the consortium had pledged US$8bn of investment over ten years. The Ledger has not found a published figure for what has actually been spent.<\/p>\n\n\n\n The costs arrived first.<\/p>\n\n\n\n Sources: Safaricom’s chief executive for FY24; company results for FY25 and FY26. Accounting for hyperinflation affects comparability across years.<\/em><\/p>\n\n\n\n Adversity: the birr and the missed target<\/strong><\/p>\n\n\n\n The middle row of that table is the setback. In May 2024 management had guided to an Ethiopian operating loss of KSh43bn to KSh46bn for the coming year. Then Ethiopia floated the birr. The currency fell 51.5 per cent in the half-year to September 2024. That forced Safaricom to revalue foreign-currency borrowings and leases, a hit of KSh17.5bn, and half-year profit fell 17.7 per cent. The break-even target moved from the year to March 2026 to the year to March 2027. Management also cut its full-year earnings guidance, to KSh94bn to KSh100bn from KSh103bn to KSh109bn.<\/p>\n\n\n\n The float was Ethiopia’s decision, not Mr Ndegwa’s. The size of the hit, however, reflects how the unit was financed: dollar-denominated obligations set against birr revenue. Mr Ndegwa’s response was to hold the line, saying “we remain confident in the long-term commercial success of our Ethiopian business”. The Ledger has not found a public explanation of what currency hedging was considered.<\/p>\n\n\n\n A second test came on 25 June 2024, during protests against the Finance Bill. Mr Ndegwa apologised for a network outage and blamed reduced bandwidth on cables carrying internet traffic. He rejected claims on social media that Safaricom had cut the internet on purpose. Civil-society petitioners later alleged in court that the shutdown was unlawful, and in May 2025 the High Court barred the government and operators from disrupting internet access until the case is heard. The Communications Authority had defended past actions as necessary for national security. The allegations are unproven, and the Ledger has found no final judgment.<\/p>\n\n\n\n The capital-allocation decisions<\/strong><\/p>\n\n\n\n Three choices show where the money went.<\/p>\n\n\n\n Capex.<\/em> Ethiopian capital spending fell 52.2 per cent to KSh18.7bn in FY26, and guidance for FY27 is KSh6bn to KSh9bn. The network is built, or nearly so. Ethiopia’s EBITDA loss fell from KSh12.4bn in the first half to KSh2.7bn in the second.<\/p>\n\n\n\n Funding.<\/em> Safaricom raised its Ethiopian stake to 54.1 per cent from 51.67 per cent in a funding round restricted to the Vodacom family, diluting Sumitomo, BII and IFC. The shareholders’ agreement lets those partners reclaim the lost stakes. Whether they chose not to match the cash call or were not offered the chance is a question for Safaricom.<\/p>\n\n\n\n Dividend.<\/em> The company held its dividend flat for three consecutive years while absorbing Ethiopian costs. It then raised the annual payout to KSh2.00 a share, up 66.7 per cent. That is about 84 per cent of the KSh95.6bn of reported profit attributable to shareholders, by the Ledger’s calculation. If Vodacom’s 55 per cent stake survives the appeal, about KSh44bn of the payout goes to it. None of this is improper. But the company is paying out most of its profit while its biggest investment has yet to earn a return.<\/p>\n\n\n\n Testing the account<\/strong><\/p>\n\n\n\n The headline figure needs care. Mr Ndegwa told investors that net income attributable to shareholders grew 67.3 per cent to KSh100bn. That is a normalised figure, excluding hyperinflation accounting. Reported profit was KSh95.6bn, up 37 per cent. Both are strong, but they are different claims.<\/p>\n\n\n\n Break-even also needs a definition. Safaricom targets EBITDA break-even in Ethiopia in FY27, yet guides to an operating loss of KSh12bn to KSh15bn even if it gets there. Positive EBITDA means the unit covers its running costs, not the cost of the network or its debt. The finance chief, Dilip Pal, says the unit is “geared for positive EBITDA breakeven in FY27”.<\/p>\n\n\n\n Credit and luck are hard to separate. The operational progress is real and plausibly his: Ethiopia now contributes about 15 per cent of group service-revenue growth, which Mr Ndegwa calls “a material part of our group”. The shares have also more than doubled, from KSh15.65 in November 2024 to the KSh34 block price in June 2026. But that price was negotiated between two shareholders, and the Ledger has not measured how much of the gain reflects the wider Nairobi market.<\/p>\n\n\n\n The control question<\/strong><\/p>\n\n\n\n The ownership dispute is the sharpest test of his public statements. In January 2026 Mr Ndegwa told lawmakers the sale would not “result in a transfer of operational control” or dilute Kenyan regulatory authority. He also told a committee that management was “not involved in determining or seeking what the right share price should be”. The two claims are narrower than the court’s finding. His statement concerned operations and regulation, while the court ruled on ownership control. The reported findings concern the Treasury’s alleged concealment of material information. The reports the Ledger has seen do not say the court made findings against Safaricom’s management.<\/p>\n\n\n\n What to watch<\/strong><\/p>\n\n\n\n Three things will settle the verdict. The Court of Appeal decides whether Vodacom keeps control. The government has told it that the KSh204.3bn it received is non-refundable. The FY27 results, due around May 2027, will show whether Ethiopia reaches EBITDA break-even, and what the operating loss looks like beneath it. And a longer test remains: whether Ethiopia ever earns more than the capital it consumes. The data cannot answer that yet. For now Mr Ndegwa has shown he can execute a difficult build and absorb a shock. Whether the bet repays its cost is the part of his record still unwritten.<\/p>\n","protected":false},"excerpt":{"rendered":" Safaricom’s chief executive has halved the losses on a costly Ethiopian bet and raised the dividend. The return on that bet, and who controls the company, remain open. […]<\/p>\n","protected":false},"author":1,"featured_media":7359,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[228],"tags":[],"ledger_sector":[],"class_list":["post-7358","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-leadership"],"_links":{"self":[{"href":"https:\/\/theledgerafrica.media\/index.php?rest_route=\/wp\/v2\/posts\/7358","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/theledgerafrica.media\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theledgerafrica.media\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theledgerafrica.media\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/theledgerafrica.media\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7358"}],"version-history":[{"count":1,"href":"https:\/\/theledgerafrica.media\/index.php?rest_route=\/wp\/v2\/posts\/7358\/revisions"}],"predecessor-version":[{"id":7360,"href":"https:\/\/theledgerafrica.media\/index.php?rest_route=\/wp\/v2\/posts\/7358\/revisions\/7360"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theledgerafrica.media\/index.php?rest_route=\/wp\/v2\/media\/7359"}],"wp:attachment":[{"href":"https:\/\/theledgerafrica.media\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7358"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theledgerafrica.media\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7358"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theledgerafrica.media\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7358"},{"taxonomy":"ledger_sector","embeddable":true,"href":"https:\/\/theledgerafrica.media\/index.php?rest_route=%2Fwp%2Fv2%2Fledger_sector&post=7358"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Ethiopia unit, year to 31 March<\/th> Operating loss (EBIT)<\/th><\/tr><\/thead> FY2023\/24<\/td> KSh45bn<\/td><\/tr> FY2024\/25<\/td> KSh61.1bn<\/td><\/tr> FY2025\/26<\/td> KSh30.1bn<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n