Home » Safaricom to earn Ksh 1.5 billion from Kenya’s state budget in 2021

Safaricom to earn Ksh 1.5 billion from Kenya’s state budget in 2021

by Editorial Team

The Kenyan government has included Ksh 1.5 billion ($14.01 million) for Peter Ndegwa’s Safaricom in the 2021 national budget. 

The money is part of a Ksh 14.9-billion ($139.25 million) payment for installing security and surveillance systems in the country between 2014 and 2016.

Business Daily reported that the government should have paid a quarterly reimbursement over five years until the bill cleared. 

However, Kenya defaulted on the payments, forcing Safaricom to threaten the government that it would shut down the surveillance system in 2020. Kenya’s Budget and Appropriations Committee stated last year that Safaricom signaled that it would disable the surveillance system over the unpaid bill. 

So far, the government has paid Safaricom about Ksh 11.9 billion ($111.21 million), leaving a balance of around Ksh 3.2 billion ($30 million).

The breakdown shown in the report included payments of Ksh 9.27 billion in 2016, Ksh 881 million between 2017 to 2019 and Ksh 1.78 billion in 2020.

The deal

In 2014, Safaricom signed a deal with the government to construct a security system worth Ksh 14.9 billion (equivalent to $165.2 million at the time). The contract award sparked contention among MPs, as the bid was not open to other telecoms players. 

Reuters reported that Kenya’s Parliamentary Committee on Administration and National Security approved the project, citing its priority nature on the backdrop of the Westgate Shopping Mall attack in Nairobi and other attacks on the country’s coast.

It entailed 2,000 video surveillance cameras, video conferencing, digital radios and a mapping system into a central command center. It also involved street-level surveillance, including license plate readers, facial recognition technology and real-time tracking across major cities like Nairobi and Mombasa.

Safaricom remains Kenya’s largest telecom company, controlling about 64.5 percent of the Kenyan market as of 2020 with about 35.6 million subscribers. Peter Ndegwa, Kenyan businessman and C-suite executive, spearheads the multibillion-dollar company.

On April 28, the company’s share price experienced an all-time high of about Ksh 39.9 ($ 0.37) per share. News that the telecom operator is close to securing an operating license in Ethiopia triggered the bull run.

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