News

Safaricom picks Kenyan CEO, ends row over top job

brianngugi_img

Summary

  • Mr Ndegwa, a Starehe Boys Centre alumnus, joins the telco from brewer Diageo, where he has served as managing director of the company’s continental European business, overseeing operations in 50 countries, Safaricom said in a statement, adding that his appointment becomes effective on April 1, 2020.
  • Safaricom has been led since July by an interim CEO, Michael Joseph, after the death of long-time head Bob Collymore.
  • The government, which owns 35 percent of Safaricom, had expressed its preference for a Kenyan to take over, breaking the trend where Vodafone had always appointed the CEO and chief financial officer at the telecom operator.

Safaricom #ticker:SCOM Thursday appointed former East African Breweries Limited (EABL) finance director Peter Ndegwa as its new CEO, granting the government its wish to have a Kenyan shepherd the region’s most profitable firm.

Mr Ndegwa, a Starehe Boys Centre alumnus, joins the telco from brewer Diageo, where he has served as managing director of the company’s continental European business, overseeing operations in 50 countries, Safaricom said in a statement, adding that his appointment becomes effective on April 1, 2020.

Safaricom has been led since July by an interim CEO, Michael Joseph, after the death of long-time head Bob Collymore.

The government, which owns 35 percent of Safaricom, had expressed its preference for a Kenyan to take over, breaking the trend where Vodafone had always appointed the CEO and chief financial officer at the telecom operator.

Vodafone had a 40 percent stake in the firm before ceding a 35 percent stake to South Africa’s Vodacom.

“We are confident that Peter will carry on our vision of transforming lives while keeping us focused on meeting our customers’ needs and holding us to being simple, transparent and honest,” said Safaricom chairman Nicholas Ng’ang’a in a statement yesterday.

“Peter brings a wealth of experience in general management, commercial and business strategy, sales and finance operations, having spent over 25 years in various roles within the Financial Services and Fast-Moving Consumer Goods sectors in Africa and Europe.”

The executive suite change comes at a period when Safaricom’s top rival Airtel Kenya, has sustained an aggressive hunt for subscribers, cutting Safaricom market share to 56.8 percent in June from 79.6 percent in June 2017.

Safaricom’s share price closed at Sh28.6 yesterday a rise of 0.35 percent from Sh28.5 at close of trading on Wednesday.

But the news of the new CEO came after the markets had closed. Safaricom’s net profit grew by 14.7 percent to Sh63.4 billion in the financial year ended March 2019 on the back of strong M-Pesa and mobile data performance.

Mr Ndegwa has been at Diageo since 2004 when he joined as strategy director of EABL, Diageo subsidiary in East Africa.

He spent eight years at EABL before being shipped to Ghana. Before EABL he was a consultant with PricewaterhouseCoopers based in the UK and here in Kenya.

Safaricom had been keen to tap an unidentified foreign national from within the Vodafone group to succeed Mr Collymore, but the government had reservations. It cited an agreement supporting the appointment of a Kenyan as CEO, adopted at a shareholders meeting in 2017.

Joe Mucheru, the minister for information communication and technology, had earlier said that the State would be surprised if the board could not find a Kenyan to run the company

The appointment of Mr Ndegwa, who holds an MBA from London Business School, ends a three-month search for a new leader at Safaricom and his former employers backed him to succeed.

“We are sad to see such a talented and passionate African leader leave our business, but equally delighted that Peter is returning to Kenya for such a significant role,” said Jane Karuku, managing director of Kenya Breweries Limited.

“It is a testament to his talent and leadership. He has been a committed leader within Diageo for over 15 years, holding senior roles across Africa and Europe delivering transformation in performance and culture in each role.”