Safaricom cements role in Kenya economy with 1.1 million jobs

From left: KCB Group CEO Paul Russo, Safaricom chief executive Peter Ndegwa and director sustainable business and social impact Karen Basiye during the telco's 11th Sustainability Report launch in Nairobi on October 18, 2022. PHOTO | DIANA NGILA | NMG

Safaricom’s operations generated more than 1.1 million jobs directly and indirectly at last year when it deepened its contribution to Kenya’s economy, a study by consulting firm KPMG shows.

The report, which was commissioned by Safaricom, shows that the telecommunications company’s voice, data and M-Pesa business generated the direct and indirect jobs through its products and services such as airtime dealers, M-Pesa agents and distributors.

The KPMG study attempted to measure the value Safaricom creates in East Africa’s largest economy beyond the bottom line.

The latest report says Safaricom’s economic activities sustained nearly 1,135,588 jobs in the period ended March, up from 1,003,669 a year earlier-- bucking the trend in corporate Kenya that saw many businesses freeze employment.

The telco’s total business operations generated Sh727 billion in the economy in the year to March, equivalent to 5.25 percent of Kenya’s GDP, the KPMG report says. This improved from Sh664 billion a year earlier.

“The true value assessment calculates that Safaricom sustained over 214,203 direct and indirect jobs during the year, and if the wider induced effects on the economy are included, this number increases to over 1,135,588,” said Safaricom in the report.

The firm had 5,852 employees as at March 2022, who earned a total of Sh22.55 billion in salaries, bonuses, pension contributions and employee performance share awards.

In addition to the traditional voice, messaging and data services, Safaricom has used its mobile money platform M-Pesa to extend its economic reach.

M-Pesa alone employs thousands of agents and is used by a large number of merchants to process payment, making it a key player in the national payments system.

The additional jobs were generated through Safaricom’s chain of 435 dealers, thousands of airtime retailers, 262,000 M-Pesa agents, and other third-party engagements such as banks, supermarkets, utility firms and insurance companies that use the telco’s services.

Safaricom spent Sh94.6 billion last year on procurement of goods and services from a total of 799 suppliers, who in turn created a significant portion of the over one million jobs.

The utility of mobile phones has greatly expanded with the birth of smartphones and mobile money, which greatly increased what users can do with the gadgets.

Earlier studies by the World Bank show that a 10 percent growth in mobile subscription yields an estimated 1.2 percent growth in GDP across the economy.

Safaricom subscribers stood at 32.8 million in March, up from 28.3 million in the same period last year.

The telecoms firm made a Sh68.67 billion net profit in the year ended March 2022, meaning that its economic impact is 10.4 times the earnings.

Safaricom’s share worth at the Nairobi Securities Exchange (NSE) of Sh1.02 trillion is more than half the value of all listed firms at the bourse.

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