Safaricom outgoing chairman, Nicholas Ng’ang’a. PHOTO | JEFF ANGOTE | NMG Safaricom #ticker:SCOM has criticised the Central Bank of Kenya (CBK) for extending the period for free M-Pesa transactions without consulting it, saying it will lose Sh19 billion worth of revenue by the end of the year from the fee waivers.
The telecoms operator’s outgoing chairman, Nicholas Ng’ang’a, Thursday told shareholders at the company’s virtual annual general meeting that the company has suffered from unilateral decisions made by regulators.
Mr Ng’ang’a did not mention the specific regulators, but the context of his speech points to the CBK, which oversees the firm’s mobile money service and has been spearheading financial relief for Kenyans in this period of Covid-19 pandemic.
The CBK announced the removal of charges on M-Pesa transactions of up to Sh1,000 from March 16 until June 30, a period when bank-to-M-Pesa transactions would also be free.
The regulator later made a unilateral decision to extend the relief measures until December 31, drawing protests from Safaricom and banks.
“We estimate the impact on M-Pesa payment support will increase to about Sh19 billion by the end of the year. Our appeal to the government would be that the regulatory environment that will follow this period of the pandemic be designed to support the revival of businesses and a return to growth,” Mr Ng’ang’a said.
“We are keen to see our regulators and all concerned stakeholders adopt a more consultative approach to concerns within the industry in order to arrive at a more considered outcome for the benefit of all.”
At Sh19 billion, the estimated revenue loss is equivalent to 22.5 percent of the Sh84.4 billion Safaricom made from the M-Pesa platform in the year ended March 31, 2020.
It also represents 7.2 percent of the company’s total revenues of Sh262.5 billion in the same period. It is not yet clear what impact the free M-Pesa transactions will have on the telecoms operator’s bottom-line in the current financial year ending March 2021.
If the relief measures are allowed to expire on December 31, 2020, they will have been in place for about nine months or 75 percent of the firm’s current financial year.
Mr Ng’ang’a, who will be replaced as chairman by Michael Joseph effective Saturday, said the fee waivers were offered in good faith to help stop the spread of the coronavirus by reducing handling of cash besides easing financial burden on customers.“We have made significant decisions as a company […]