Safaricom pumps Sh601bn into economy in one year

A Safaricom shop in Nairobi:. FILE PHOTO | NMG Safaricom #ticker:SCOM injected Sh601 billion into the Kenyan economy in the year ended March 2019, making the telecommunications giant one of the single-biggest contributors to the country’s GDP.

The economic contribution came in the form of jobs, value chain opportunities for other businesses, taxes and dividends to shareholders.

The telco’s capital expenditure, which stood at Sh37.2 billion in the period, also contributed to the economy through payments to suppliers and contractors.

Safaricom says in the self-appraisal that it supported an estimated 979,000 direct and indirect jobs, up from 897,372 in 2017.
The Nairobi Securities Exchange (NSE)-listed company disclosed in its 2019 annual report released Wednesday that its value to the Kenyan economy rose by 11 percent or Sh58 billion in the year from Sh543 billion the previous year.

“Our latest True Value Report indicates that the value to the Kenyan society created by Safaricom increased by 11 percent to Sh601 billion, 9.6 times the financial profit the company earned during the same period,” says Safaricom in the annual report.

The firm’s operations contributed an equivalent of 6.3 percent of GDP in the period.

The growth in the job count came even as other sectors of the economy continued to shed workers, citing a tough economic climate.

Shed workers

Safaricom’s rival Telkom Kenya Wednesday announced it would lay off 575 staff while beer maker EABL also notified its staff of a redundancy plan that sources indicated would target more than 100 employees.

Stanbic Bank is also in the process of exiting an estimated 200 workers.
The telco is the largest listed firm on the NSE, with a current market capitalisation of Sh1.099 trillion.The company paid Sh98.13 billion to the government in duties, taxes and licence fees last year, having made gross revenue of Sh250.96 billion and net profit of Sh63.4 billion.“This increased the total duties, taxes and fees paid since inception to Sh698.52 billion,” said Safaricom in the report.The telco’s payout to shareholders for the 2018/19 financial year included a special dividend of Sh0.62 per share, amounting to Sh24.84 billion, which was in addition to the first and final dividend of Sh1.25 per share totalling Sh50.08 billion.The cash will be remitted to the company’s 560,018 shareholders on November 30.The Treasury, which holds a 35 percent stake in the firm, will take a slice of Sh26.22 billion, while South African telco Vodacom and its parent Vodafone UK will earn Sh29.97 […]

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