The Central Bank of Kenya (CBK) has escalated demands for separating M-Pesa from Safaricom, citing risks from intertwined telecom and financial operations. Safaricom CEO Peter Ndegwa denied receiving formal proposals for the split, arguing integration supports financial inclusion and operational efficiency.
The CBK’s National Payments Strategy, launched this year, aims to enhance interoperability, transparency, and corporate governance in digital finance. Governor Dr. Patrick Njoroge emphasized structuring telecom firms like banking groups, where subsidiaries operate independently to isolate risks. "We want to prevent transfer pricing issues and ensure transparent pricing for services like tower rentals," he stated during a 2022 Senate briefing.
Safaricom maintains M-Pesa relies on its telecom infrastructure, particularly for feature phone users. "Keeping the two businesses integrated ensures broader financial inclusion," Ndegwa said. The telco points to its agile structures, which it claims already separate business units. However, the CBK insists stricter oversight is needed as digital financial services expand.
Legislative efforts to force Safaricom’s separation date back to 2017, when MP Jakoyo Midiwo proposed splitting telecom and fintech operations. Similar moves resurfaced in 2019 under Elisha Odhiambo, though neither gained traction. The Bank of Uganda’s 2020 National Payment Systems Act, mandating mobile money separation, has accelerated similar trends across Africa.
Recent industry shifts highlight growing pressure on telcos to restructure. Airtel Africa spun off its mobile money arm in 2022, valuing it at Sh265 billion, and now targets an IPO by 2025. MTN Group is exploring a Sh575 billion mobile money division, while Safaricom argues it already operates M-Pesa as a distinct entity. "Our priority remains serving customers, and keeping M-Pesa integrated aligns with that goal," Ndegwa said.
The CBK reiterated its stance, noting existing legal frameworks permit such measures. "We have the tools to implement these changes," Njoroge said. "The focus now is on execution and long-term stability in the digital financial sector." Safaricom’s 2020 M-Pesa Africa joint venture with Vodacom Group, now operating in seven countries, illustrates its diversification efforts.
