Safaricom - 2020 Sustainable Business Report

SAFARICOM 2020 | SUSTAINABLE BUSINESS REPORT 30 INTRODUCTION OUR BUSINESS OUR MATERIAL TOPICS OUR STAKEHOLDERS CONCLUDING REMARKS The FY20 True Earnings bridge The economic impact made through Safaricom operations is the greatest contributor to the value we create. This has grown six per cent since FY19. The value created through capital expenditure also increased in the year under review, by one per cent. This chart demonstrates how all factors have contributed towards the “True Earnings” of Safaricom for this period. Most noteworthy was the growing contribution from social externalities, particularly through the social value created by M-PESA as the product grew and evolved. Throughout the period, the greatest contribution to “True Earnings” came from the economic value created through the operations and capital projects of Safaricom, whereas the negative environmental externalities, though recognised as a material topic, continue to have minimal impact. The economic impact of the estimated KSh 262.6 billion in annual revenues generated from the Safaricom operations resulted in an estimated KSh 549.8 billion contribution to Gross Domestic Product (GDP). This GDP impact can be separated into a direct impact of KSh 152.7 billion, an indirect impact of KSh 94.7 billion and an induced impact of KSh 302.4 billion. The total economic impact of the KSh 36 billion capital expenditure in Safaricom resulted in a total estimated GDP contribution of KSh 20.4 billion. This GDP impact can be separated into a direct impact of KSh 8.5 billion, an indirect impact of KSh 3.3 billion and an induced impact of KSh 8.6 billion. The “Total Economic Value added” on the Safaricom True Earnings Bridge only includes the direct and indirect GDP impact associated with Safaricom operations and capital expenditure. Each year, a portion of the economic value generated by Safaricom is lost as a result of corruption that takes place in the Kenyan economy. It is important to note that this is not directly connected to the activities of Safaricom, but rather acknowledges the unfortunate reality that not all of this value is retained. This graph provides a high-level overview of the annual contribution to employment. The numbers are derived from a Kenya-specific Economic Impact Assessment (EIA) model and include direct and indirect contribution to employment, as well as the induced wider effects on employment in the economy. The positive social impact associated with the direct and indirect jobs sustained as a result of the existence of Safaricom has been included in the True Earnings bridge. True Earnings | FY17 - FY20 (KSh million) FY19 FY18 FY17 FY20 55 289,0 48 444,4 62 491,0 74 698,4 Financial Economic Social Environmental 288 594,3 267 967,9 317 602,0 338 529,6 199 493,6 170 018,9 221 500,5 241 448.9 (258,5) (306,3) (412,3) (406,2) Jobs impact | FY17 - FY20 FY19 FY18 FY17 FY20 No. of jobs sustained 1 013 728 897 372 978 633 823 243