There has been an ongoing debate within and without Kenya as to whether M-PESA should be split from Safaricom and be made to stand on its own as an independent company.
According to this writer, the move by the deputy minority leader in the National Assembly, Jakoyo Midiwo who sought to propose amendments to the banking and communications laws in an attempt to force Safaricom to split from M-PESA is one of the most idiotic moves in a third world economy that is trying to find a place on the global economic table.
There is also an alleged report that has been done and prepared by Communications Authority of Kenya and which among other things recommends the splitting of Safaricom into different types of telecoms as well financial service provider saying that the company is too dominant for other players in the sector to catch up with it. If this is indeed in the report, then this is one of the awkward and shameful reports ever.
As Bob Collymore, the CEO of Safaricom puts it, the mere thought to split up Safaricom “sends a really worrying message to international investors investing in the country,” because investors see Kenya as a country that is scary of developments, on the expanding companies and of competition.
Renowned businessman Jimnah Mbaru in his Twitter feed said that “It is absolutely wrong for anyone to attempt to break up M-PESA.” He says that “M-PESA is a successful institution filling a gap long abandoned by banks.” According to Jimnah, “the M-PESA brand is a global ambassador of Kenya. The world loves it. We should not try to mess it at all. Can you imagine the world using M-PESA for global transactions! A kind of a credit card, debit card, payments card etc originating from Kenya?” he asked.
Why calling for Safaricom’s split is a misplaced agenda
Safaricom is the largest telecommunication company in Kenya, and East and Central Africa. It is a company that is globally recognized. May companies and great personalities have come from around the globe to Nairobi just to see how Safaricom works, especially MPESA with the latest guest being the Facebook founder Mark Zuckerberg who flew all the way just to come and have a look at the greatest invention ever made.
M-PESA and Safaricom as one are the largest revenue earner to the government than any other company in Kenya. It is the only company that has been earning profits that can only be described as crazy, ranging to up to 30 billion shillings. The company has also provided thousands of jobs to Kenyans and continues to employ even more. Instead of making the company even stronger, we are becoming ‘jealous’ of its progress and want it split so that it stops growing too ‘powerful.’
It is only in Kenya where success is feared. If a company comes to Kenya and grows rapidly, people become scared of its ‘success’ and want it to slow down on success. Where on earth have you ever heard something like that? It is like we are comfortable when great companies such as Kenya Airways and Uchumi stumble from grace to grass. Uchumi is already in the Intensive Care Unit and chances of it ever coming back to life being like a dream. Kenya airways on the other hand is struggling to resurrect with a lot still not done. Do we want Safaricom to be like one of these ailing companies so that we become happy?
If we are going to split Safaricom into smaller companies, this is what I think is going to happen:
- Innovation will be killed. M-PESA is the best innovation ever made in history of technology in Kenya and in the world. We are the actually the pioneers of mobile money transfer systems in the world and now, we want to break this.
- The company will likely go the ‘Kenyan’ way, that is, making losses. I think what some Kenyans want is to have an opportunity to head some ‘Safaricom companies’ after the split and as usual, we shall have another Uchumi or KQ.
- Revenue to the government that Safaricom has been remitting is going to reduce. Safaricom is among the largest taxpayer in Kenya and splitting it is going to split the revenue too.
A free market can be defined as a description of all voluntary exchanges that take place in a given economic environments. According to Investopedia, free markets are characterized by a spontaneous and decentralized order of arrangements through which individuals make economic decisions. Based on its political and legal rules, a country’s free market economy may range between very large or entirely black market.
Despite the fact that Kenya has a Competition Authority of Kenya which was established under the Competition Act, No. 12 of 2010, and which is mandated to enforce the Act with the objective of enhancing the welfare of the people of Kenya by promoting effective competition in markets as well as preventing misleading market conduct throughout Kenya, Kenya is still largely a free market economy where there is free competition and it is upon companies to compete and get their slots among customers.
Those accusing Safaricom of domineering the market, who has kept them from doing the same? The Kenyan market is majorly survival for the fittest, one either shapes in or shapes out.