Safaricom’s impact on Kenya’s economy up 7.4 percent to Sh909Bn

Telco giant Safaricom’s contribution to the Kenyan economy in the fiscal year 2023 increased by 7.4 percent to Kes909.5 billion, the company’s Sustainable Business Report shows.

The amount, which is roughly 15 times the Kes62.3 billion financial profit reported by the telco in the year under review is attributable to the value created for customers, agents and merchants, especially through the flagship cash transfer system, M-PESA, which soared by 17 percent compared with FY22.

Impact through M-PESA

According to the report titled ‘Pathway to a Purpose-Led Technology Company,’ in FY23, M-PESA generated societal value amounting to Kes325 billion, reflecting a year-on-year increase of 17.66 percent.

The primary factors contributing to this growth were the rising number of customers to over 30 million and an increase in both the average number and value of transactions per customer. The company says growth in economic impact was also created through Safaricom’s capital and operational expenditures amounting to Kes40.4 billion which gave rise to a GDP contribution of Kes22.9 billion in FY23.

According to the telco’s 12th Sustainable Business Report, Safaricom sustained over 1.2 million jobs, that is, encompassing 236,674 direct and 1,159,309 indirect opportunities in the 12-month period under focus.

“Sustainability reporting is not just a corporate responsibility but an essential pillar of our business strategy. Being accountable on Environmental, Social and Governance (ESG) ensures that we remain committed to our core: Transforming Lives,” said Peter Ndegwa, CEO, Safaricom PLC.

Dr Sheila Ochugboju, Director Alliance for Science, who was the chief guest during the report launch lauded Safaricom, noting that the company is a symbol of the continent’s transformative potential. “Safaricom consistently leads the way as the go-to company, demonstrating how an organisation can assess its people and challenges, and employ technology to define innovative solutions.”

During FY23, Safaricom collected and recycled about 96.6 percent of its total solid waste generated. An estimated 1.4 percent of the waste left for landfills due to the inclusion of items such as diapers and face masks, which posed health risks and could not be recycled. A further 2.1 percent of the waste was incinerated.

Read also: Kenyan banks and Safaricom sign Sh15 billion loan for a greener tomorrow

ESG framework in Ethiopia

At the moment, Safaricom is establishing ESG frameworks and policies within its new frontier market, Ethiopia, where it says it will showcase its sustainability initiatives in subsequent reports.

Board Chairman Adil Khawaja, said, “We take pride in being a catalyst for positive change not only in Kenya and Ethiopia but also globally. We are committed to continuous innovation, adaptation, and diligent efforts to ensure Safaricom continues to provide financial services, empower communities, and drive economic growth.”

As a company, we are committed to evaluating and adjusting our strategies to strengthen Safaricom’s reputation as a trusted brand, Mr Khawaja noted. The telco is aligning its efforts with evolving expectations of the society and global sustainability objectives, particularly to become a net-zero emissions company by 2050.

In the near-term, the company says its focus will be scaling up technological solutions and enhancing 4G coverage, extending connectivity to homes and businesses, and fostering innovation in the 5G and IoT space.

In line with its ESG goals, Safaricom recently secured a Kes15 billion Sustainability Linked Loan (SLL) through a consortium of banks, including Standard Chartered Bank, Kenya Commercial Bank (KCB), Stanbic Bank, and Absa Bank.

This loan will finance key initiatives aimed at achieving net-zero carbon emissions, monitoring gender diversity, and promoting social equality. According to Birju Sanghrajika, who is StanChart Bank’s Head of Corporate Commercial and Institutional Banking East Africa, sustainable finance can be either activity based, where proceeds of projects are allocated to finance green initiatives or it may encompass rewarding or penalising firms based on their adherence to set ESG actions.

“Safaricom has made sustainable finance possible, focusing on addressing climate change. This is the decade where technology will democratize access to value,” noted Stanbic Bank CEO Joshua Oigara.

In FY23, Safaricom achieved several milestones, including the deployment of an additional 205 5G sites while also expanding its fiber network by 3,120 kilometers, reaching a total of 14,000 kilometers.

From left: KCB Group CEO Paul Russo, Birju Sanghrajika, StanChart Bank’s Head of Corporate Commercial and Institutional Banking East Africa, Stanbic Kenya CEO Joshua Oigara, Absa Bank Kenya CEO Abdi Mohamed and Safaricom PLC Chief Financial Officer Dilip Pal during a panel discussion on “The Role of Sustainable Finance and Technology in advancing the sustainable development agenda” at the launch of Safaricom’s 12th Sustainable Business Report.

Quality of Service

Further, Safaricom maintained its leadership position in the market by receiving a 95 percent score on the Quality of Service (QoS) survey, the report notes.

In line with the telco’s commitment to partnerships (SDG17) and the development of innovative products and services (SDG9) that promote socio-economic development (SDG8) and reduce inequalities (SDG10), Safaricom announced registered 1.6 million farmers on DigiFarm, engaged 167,000 farmers in credit programs, and disbursed Kes940 million in loans to the producers.

Moreover, Safaricom, in collaboration with the government and other fintech players, launched the Hustler Fund, which has now hit 16.11 million subscribers and disbursed Kes24.44 billion.

In addition to these initiatives, Safaricom introduced the myCounty App, adopted by 11 devolved units, and implemented a 50 percent cost reduction on overdraft service Fuliza.

[email protected]

Oh hi there 👋
It’s nice to meet you.

Sign up to receive awesome content in your inbox, every month.

We don’t spam! Read our privacy policy for more info.