The year under review proved to be an extremely difficult period for our operations in both Kenya and Ethiopia. High rates of interest and inflation produced challenging conditions during the year, even with resilient GDP growth in Kenya of 5.6% in 2023.

Currency weakening together with a tightening of monetary policy in Kenya, and the controlled currency in Ethiopia compounded this effect, and impacted energy pricing. This in turn exacerbated the consequent inflationary outcome and the constraints on disposable income.

It is important to note that all this played out against a still unsettled global economy, in which war and its effects on trade, logistics and energy continued to exert knock-on pressures across the world and especially on developing economies.

For more on our operating environment, click here.

A further challenge emanated from the regulatory landscape, where we saw increased excise duty rates imposed on mobile money transfer services and additional taxes on SIM cards. We continue to keep a watchful eye given the impact that additional taxes could have on the business and our operations.

With the approval of our 2030 strategy by the Board, our goal is to become Africa’s leading purpose-led technology company. Led by this vision, we aim to maximise the opportunities we have identified. Among these is the strong commercial momentum that we forecast for Ethiopia in the short- to medium-term. This includes growing a quality subscriber base, monetising opportunities such as mobile data – which has recorded a very high usage – acceleration of M-PESA penetration, and scaling our operations across the country thanks to a stable security environment. We note and appreciate the support and collaboration of the Ethiopian government as we work together towards supporting its ambition of creating Digital Ethiopia.

Ethiopia has the second-largest population on the continent, and it is weighted towards the young. However, it still only exhibits a 50% connectivity penetration, a fact that demonstrates the potential of the market. We closed the year with 2,800 sites and we anticipate that that we will have integrated 3,500 into our network by the end of FY2025. This will facilitate our aim of being in the forefront of digitisation and financial inclusion in that market.

With our connectivity business in Kenya already largely mature, we see an opportunity in mobile financial services, enabling us to provide more access and drive financial inclusion in the process. We are advancing M-PESA into becoming a platform that offers wealth management, diversified credit and savings propositions amongst others.

We are working with government to enable the digitisation of government services and ease of service delivery to citizens. Together with various industry players and with the support of Government of Kenya, we launched a first-of-its-kind device assembly plant in Kenya that will manufacture smart phones and other devices, making it easier for the Government’s digital economy agenda to be realised.

For more on our strategy, click here.

During the year we saw significant growth in our connectivity business, as well as in mobile data. In the latter, affordable devices that we are now able to deliver through our own manufacturing facility began to make an impact – further proof that we have the correct and relevant propositions for our customers.

By carefully segmenting our market, and targeting the segments with what they most need, we have increasingly been using AI and big data. We are powering growth and innovation for our large as well as micro, small medium enterprises (MSMEs) through efficient and cost-effective IoT and ICT solutions. Amongst other solutions for enterprises, we are scaling those in cloud and cyber-security, layering them on our connectivity products. In addition, we are aiding our MSMEs with solutions such as SME digital adoption plans which provide cloud-enabled productivity tools.

For more on our technology and services, click here and here respectively.

We believe that we have successfully increased usage by focusing on:

• What our customers really require
• The way they experience our services
• The journeys they undertake with us

We attribute these growing volumes to our customer obsession philosophy, as well as to the ongoing material reduction in pricing across our product base by between 40% and 60% over the last four years.

Technology has become an integral part of our daily lives, driving innovation and progress across various sectors of the economy, and our transition from a Telco to a TechCo is underpinned by our firm commitment to bridge digital and financial divides. While demonstrating our ability to utilise technology and provide relevant solutions that solve societal issues, we have cemented our strategic move to become a technology company.

For more on customer obsession, click here

It is pleasing to note that our Company ecosystem remains geared for growth. We have put in place the measures to facilitate this by driving efficiency and cost reduction through our technology, infrastructure and culture, as well as through our commitment to green principles. Indeed, solar energy is already driving a full 24% of our sites.

For more on our financial performance, click here.

We have been operating in Ethiopia for around 18 months, and I am extremely proud of the strides we have made there. Our focus has been on scaling our operations to occupy the key position in that country’s telecommunications industry that we envisage for ourselves.

We now cover 40% of the population and have grown our customer base to over 9.4 million since inception. Our goal of playing a central role in the digitisation of Ethiopia remains in place, with both infrastructure and usage demonstrating that we are poised for solid growth in that country.

I am proud to reaffirm that Safaricom’s commitment to the people among whom we operate, and the environment in which we all live, remained as strong as ever during the year under review. In the space of a year, the country went from drought to floods, itself a sad confirmation of the climate crisis. I am honoured to be able to lead the private sector’s representation on the National Disaster Response Appeal Fund, to complement government efforts.

Our two foundations continued their essential work in alleviating health, education, financial literacy and inclusion difficulties. The dedicated support and innovation that the foundations provide remain an essential part of our obligations as a responsible corporate citizen.

Moreover, our support of the Chapa Dimba football tournament this year enabled thousands of young Kenyan girls and boys across 3,300 teams, to realise their passion for the game. It is gratifying to see them connecting through sport and music and advancing their talent.

For more on our foundations, CSI and environmental efforts, click here and here respectively.

I believe that we are extremely well-positioned to continue our path of strong growth in the short, medium and long term. In the medium term, I anticipate that we will break even in Ethiopia by the end of year four of our operations there.

In Kenya, with our mission of transforming lives, we are now implementing our new vision and strategy. We will continue to see growth, as we work towards assuming the mantle of being Africa’s leading technology company by 2030.

I believe that with our agile ways of working, our culture of customer obsession and societal relevance, we have both the impetus and the tools to cement the growth that we have built on during the year.

I am extremely grateful to our new Board for the careful considered, committed and diligent way in which they have supported me and indeed all our management team. Their wise leadership has provided us with the solid foundation that has enabled delivery of the pleasing results we have seen.

I would also like to thank the primary regulators in both Kenya and Ethiopia, whose support is intrinsic to the way we operate. Our dealers and agents in both countries, too, have continued to play a crucial role in our success. I would like to thank them for their loyalty and commitment to growing our brand.

To all my colleagues throughout the business – I am very proud of your dedication, talent and unstinting embodiment of our ways of working, our customer obsession and our determination to change lives. It is your efforts that enable us to deliver the results we do.

I would like to thank all our shareholders, and all our partners and stakeholders who have continued to show us the support that is so important to our business.

Finally, I would like to thank our customers for their loyalty in what I know has been a tough year for consumers. We greatly value your ongoing confidence in us to deliver the services and products you need.

Peter Ndegwa
Chief Executive Officer