The National Assembly has approved the partial sale of government shares in Safaricom to Vodacom, paving the way for a transaction expected to raise about Sh240 billion for infrastructure development.

The House on Tuesday adopted a joint report by the Departmental Committee on Finance and National Planning and the Public Debt and Privatisation Committee, allowing the government to offload a 15 per cent stake in the telecommunications firm.

The approval sets the stage for the National Treasury to proceed with the transaction from April 1 or later once all regulatory conditions outlined in the share purchase agreement are met.

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The deal is expected to generate about Sh200 billion from the share sale and an additional Sh40.2 billion in upfront payments in lieu of future dividends.

The proceeds will be channelled into the National Infrastructure Fund to support key development projects.

The decision, however, was not without controversy, as Suba South MP Caroli Omondi raised concerns over an ongoing court case challenging the transaction.

He questioned whether Parliament could proceed with the approval while the matter was still before the courts.

National Assembly Speaker Moses Wetang'ula dismissed the concerns, ruling that Parliament was not a party to the case and could not be barred from executing its constitutional mandate.

“Parliament is not a party to those proceedings. The orders given, if authentic, are not directed at Parliament. This House has a constitutional responsibility to transact its business,” he said.

Majority Leader Kimani Ichung'wah also downplayed the objections, saying the issue had already been debated in the House.

“Caroli Omondi participated in the debate and opposed it; he should have raised those issues at that stage,” Ichung’wah said.

A joint parliamentary committee had earlier reviewed the proposal and endorsed the sale, subject to conditions aimed at safeguarding public interest.

Among the key recommendations was that the transaction should not result in job losses and that Safaricom’s existing business model should be preserved.

The committee also found that the agreed share price aligns with current market trends and includes measures to protect stakeholders.

MPs emphasised that employees’ jobs must be protected and that personal data would remain secure under existing cybercrime laws.

In addition, the committee recommended that part of the payment be made upfront in the form of dividends, with all proceeds ring-fenced for infrastructure funding.

Meanwhile, Safaricom has defended the transaction in court, arguing that it is lawful and subject to regulatory oversight.

Through its lawyers, the company warned that suspending the process could unsettle financial markets and weaken investor confidence.

It maintained that the dispute is largely commercial in nature and already under review by the relevant regulatory authorities.

If completed, the transaction will increase Vodacom’s stake in Safaricom from 40 per cent to 55 per cent, giving it majority control of the company, while the government’s shareholding will reduce from 35 per cent.