KPMG Releases First True Value Report in Africa

Global consultancy firm KPMG has released its first True Value report¹ in Africa, quantifying the value that mobile service provider Safaricom has delivered to the Kenyan economy.

The report finds that Safaricom generated a total of Kshs 315 Billion in revenues to Kenya’s GDP during FY2014/15, which accounted for a total of about 6% of GDP in total.

“The True Value report aims to discover an organization’s value to both the economy and society beyond traditional financial reporting. It allows companies to identify how business leaders can better understand the impact their organizations have on an economy,” said Neil Morris, Director, KPMG.

The exclusive report finds that Safaricom generated societal value for Kenya at least nine times greater than their financial profit in the financial year 2015.

Covering Safaricom’s True Value during the 2014/5 financial year, the report says that Safaricom’s operations sustained about 682,000 jobs in Kenya during the year, representing about 4% of the total economically active labour force in Kenya.

Safaricom continues to be a major contributor to the revenues of the Government and remitted Kshs 54.8 billion in FY 2014/15, with corporate taxes and excise duties accounting for 70% of the total revenues submitted to the republic.

M-PESA created an estimated value of Kshs 133.8 billion in the 2014/15 financial year which was four times the total amount of transaction fees earned by Safaricom in the same period.

“This tells us that there is a bigger story that has driven the Safaricom narrative over the last 15 years. We now have a picture of our True Value beyond our financial results. This value is directly attributable to our deep connection to this market, and our continued desire to create solutions for the mobile phones that can Transform the Lives of Kenyans,” said Bob Collymore, CEO, Safaricom.

Safaricom commissioned KPMG to assess the broader economic contribution that its operations have had in Kenya– including its economy, job creation, tax revenue and poverty alleviation for the 2014/15 financial year.

KPMG utilized data from a number of different sources including; industry values in terms of revenue from BMI, income statements from Safaricom for the 2014/15 financial year, National Accounts and labour force for Kenya from the Economic Intelligence Unit (EIU).

The methodology used estimates Safaricom’s economic impact and quantifies the social value created by M-PESA which has generated sizeable social value for its customers, agents, merchants and partners. 

This assessment values Safaricom’s ‘True Earnings’ – a monetization of Safaricom’s financial, economic, social and environmental impacts for the most recent financial year.

The True Value assessment reveals that Safaricom creates social value several multiples greater than its’ financial value. For example, stakeholders experience four times greater social value than the transaction fees paid to Safaricom; as well as 86% of customer’s experience created by M-PESA, due to increases in personal savings.

¹KPMG True Value is a tool to understand how the value a business creates and reduces for society is likely to affect the value it creates for shareholders. This knowledge provides a new lens for decision-making to improve performance, inform strategy and increase influence. KPMG True Value is a 3-step process that can be applied across sectors and geographies. It is scalable and can be applied to a whole company, a division or a specific project.