Safaricom stake in Kenya economy at $6bn

Friday October 06 2023

Alliance for Science Executive Director Dr Sheila Ochugboju, Safaricom CEO Peter Ndegwa and Safaricom Board Chairman Adil Khawaja during Safaricom's Sustainable Business Report launch, at Michael Joseph Centre, Nairobi, Kenya on October 5, 2023. PHOTO | BILLY OGADA | NMG


Safaricom grew its contribution to the Kenyan economy by 25 percent to move closer to the Ksh1 trillion mark ($6.7 billion) in the financial year ended March 2023, coming in the year it sustained over one million jobs.

The company’s latest annual sustainability report says its value in the economy grew by Ksh182.3 billion ($1.23 billion) to hit Ksh909.5 billion ($6.12 billion) compared with Ksh727.2 billion ($4.9 billion) a year earlier.

Safaricom says its economic activities sustained nearly 1.16 million direct and indirect jobs, deepening its impact in the economy where new job opportunities have failed to satisfy the demand from thousands of youths leaving colleges and universities.

Read: Safaricom adds 675 new jobs after Ethiopia entry

The telco was at the end of March sustaining 236,674 direct jobs while the rest were derived from indirect activities such as suppliers and users of the company’s various products.

“Our expenditure creates additional employment and benefits our suppliers’ employees. A proportion of the additional income generated in this way is spent on the consumption of goods and services,” says Safaricom.


“Through linkages and multiplier effects, this positively impacts the broader economy by stimulating additional demand for the products and services produced within the economy.”

At Ksh909.5 billion, Safaricom’s contribution to the economy was equivalent to 14.6 times the Ksh62.3 billion ($419.1 million) net profit it posted during this period. It is also equal to 5.1 per cent of Kenya’s gross domestic product (GDP).

Safaricom puts the economic impact of the Ksh311 billion ($2.1 billion) annual revenue generated from its operations at an estimated Ksh660.9 billion ($4.45 billion) contribution to the GDP.

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The economic value added through operations rose by 3.4 percent to Ksh542 billion ($3.65 billion) while social value from M-Pesa grew by 17.7 percent to Ksh325 billion ($2.2 billion), with the telco linking this to an increased number of users and the average number and value of transactions made per customer.

M-Pesa alone employs thousands of agents and is used by a large number of merchants to process payments, making it a key player in the national payments system.

The platform accounts for the bulk of the other direct jobs associated with Safaricom, including 270,360 M-Pesa agents countrywide.

Safaricom also supports 432 dealers, who sell data, devices and airtime on its behalf while the telco is also supported by a network of 720 suppliers.

It spent Ksh102 billion ($686.2 million) last year on procurement of goods and services from local and foreign suppliers, who in turn created a significant portion of the over one million jobs.

The telco started releasing its sustainability report 12 years ago, using this document to describe its actions, opportunities and challenges in powering the tech ecosystem in Kenya while following environmental, social, and governance (ESG) principles.

“For Safaricom, sustainability is not just a good thing to do, but the right thing to do. We have formalised this approach by prioritising nine of the 17 United Nations Sustainable Development Goals which we use as a framework to deliver our purpose, adopting a co-creation approach,” said Peter Ndegwa, the Safaricom CEO.

Read: Safaricom signs loan deal with lenders for sustainability growth

Safaricom, which has been in existence for over 25 years, is the largest listed firm on the Nairobi Securities Exchange (NSE), with a market capitalisation of Ksh586.96 billion ($3.95 billion), and Kenya’s most profitable.

The telco has since 2015 been using a structured impact modelling tool – the KPMG ‘True Value’ methodology – to quantify the positive and negative impact of the organisation on society, the environment and the economy.

“True value enables us to combine financial earnings data with monetised externality data and to quantify the likelihood and impact of the latter becoming the former,” says the telco.

Safaricom now targets deepening its sustainability agenda and growing into a purpose-led technology company by 2025.

The firm last month signed an agreement to raise Ksh15 billion ($100.91 million) worth of sustainability-linked loans from a consortium of local and foreign banks to fund its sustainable growth strategy.

The credit facility, which can be expanded to Ksh20 billion ($134.5 million), has been signed with KCB Group, Absa, Standard Bank of South Africa and Standard Chartered. The agreement will enable Safaricom to access funding based on its progressive achievement of set milestones across ESG areas.