Sustainability Report 2016

Safaricom Sustainability Report 2016

The FY16 value bridge estimates that the total value Safaricom created for Kenyan society

was 10.86 times greater than the financial profit the company made during the same period.

This has been an increase from FY15 which was 10 times. This can largely be attributed to the

growth in the number of customers, the wider range of products and services available to

customers and the growing network.

For FY16, another element was also included in the calculation. This is the ‘Social Value

of Jobs’, which considers all of the direct and indirect jobs created by the operations of

Safaricom and values the social value — over and above their salaries — created for people

whose employment is linked to Safaricom.

The company creates the greatest value for society through the added economic value it

generates from its operations and capital expenditure, along with the positive social impacts

created by its M-PESA mobile money transfer service.

How value is created and eroded

Economic elements:

Safaricom’ s contribution to the Kenyan economy, which takes into account both economic

value generated and tax paid, amounts to KSh 249 billion. If the wider effects on the economy

are included, this number increases to KSh 383 billion, approximately 6 percent of the Gross

Domestic Product (GDP) of Kenya. The Capital Expenditure of the company in the period

created Ksh 15 billion in direct and indirect value, and Ksh 27 billion with the wider effects on

the economy.

This value is eroded by corruption in the Kenyan economy. This is not directly related to the

operations of Safaricom, but the assessment acknowledges that corruption is likely to prevent

some of the economic value that Safaricom creates from reaching the intended recipients.

Social elements:

The greatest contribution to Social Value is M-PESA. The social value created by M-PESA in

FY16, excluding transaction fees, has been calculated at KSh 184.5 billion. This is 4.45 times the

total amount of transaction fees earned by Safaricom in the same period and means that,

for every M-PESA transaction that takes place, KSh 67.36 of value is being created for Kenyan

society.

It is interesting to note that, while the significant contributions of the M-PESA and Safaricom

Foundations create tangible social value, this is small in comparison with the impact of M-PESA,

illustrating the power of the operations of a company in creating positive social impact.

The new addition of the social value of jobs is also less significant. This is largely due to the

fact that: a significant portion of employment value is captured economically (through

salaries); Safaricom cannot take full responsibility for indirect jobs as a number of them would

exist without Safaricom; and a significant portion of direct employees would be able to find

employment elsewhere, if necessary.

Health and safety incidents that take place as a result of the operations of the company are

the only element that erode social value.

Environmental elements:

The nature of the operations of Safaricom mean that negative environmental impact

is minimal; however, carbon emissions from fuel electricity consumption, as well as the

consumption of water do reduce the value created. This is mitigated to some degree by

activities at Safaricom such as water and electricity saving initiatives, as well as recycling

projects.