True value assessment

We monitor and measure our contribution to Kenyan society continuously. One of the ways in which we evaluate our role is by assessing the significant indirect value contribution we make to the economy, society and environment in Kenya. We use a structured impact modelling tool – the KPMG “True Value” methodology – to quantify the positive and negative impact of the organisation on society, the environment and the economy in monetary terms. The following “True Earnings” bridge highlights our resilience as a business and strong fundamentals by showing that the total value we created for Kenyan society in FY20 was KSh 654 billion, around nine times greater than the financial profit we made during the year, and that we sustained over 192 747 direct and indirect jobs.

The following is an independent analysis of Safaricom True Earnings by KPMG.

True Value: Impact on society

The True Value assessment calculates that Safaricom sustained over 192 747 direct and indirect jobs during the year and, if the wider effects on the economy are included, this number increases to over 1 013 728 jobs.


True Value: A three-step methodology that enables companies to (i) assess their ‘true’ earnings including externalities, (ii) understand future earnings at risk and (iii) develop business cases that create both corporate and societal value.

True Earnings: The first step of the True Value methodology, which quantifies and monetises the material externalities of a company.

Total Economic Value: The nature and magnitude of the contribution to the Kenyan economy made by Safaricom.

Induced economic impact: Operational and capital expenditure by Safaricom will create additional employment and also benefit the employees of our suppliers. A share of the additional income generated in this way will be spent on the consumption of goods and services, which, through linkages and multiplier effects, will benefit the broader economy by stimulating additional demand for the products and services produced within that economy.

We remain committed to our purpose of transforming lives. Our latest True Value Report indicates that the true value to Kenyan society created by Safaricom (the cumulative outcome of the economic, social and environmental impacts highlighted on the True earnings bridge) increased by nine per cent to KSh 654 billion, nine times the financial profit the company earned during the same period, and we contributed a total of 6 per cent to the gross domestic product (GDP) of the country. We continue to leverage the power of mobile technology to deliver shared value propositions that disrupt inefficiencies and impact lives positively in the health, agriculture and education sectors.

True Value Assessment

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.

The social value of M-PESA remains a significant creator of value for Kenyan society, increasing by 10 per cent in the last financial year. The major drivers of this growth have been the increase in numbers of customers, agents and merchants; the increase in the average number of transactions per customer; and the increase in the average value of transactions made per customer. The greatest value continues to be felt by customers, who benefit from their improved ability to manage and save money, lower transaction costs, less theft, as well as the wellbeing that comes with access to goods, services and opportunities, and increased safety and security.

There was one recorded third-party fatality in FY20, and a year-on-year increase in the number of lost-time injuries, which negatively impacted the Safaricom True Earnings for the period. It is also worth noting that the decrease in spending by the Safaricom and M-PESA Foundations reduced the value created through strategic social investments during the year.

The overall negative environmental impact on the Safaricom True Earnings decreased slightly. The main contributor was the decrease in carbon emissions in the year under review due to reduced travel, improved management of diesel and refrigerant consumption and more accurate billing.

There was a slight increase in total water consumption associated with an increase in the number of staff and enhanced awareness on handwashing.

All financial information can be found in the 2020 annual financial report, including taxes paid by Safaricom and actual direct employment. Both capital and operational expenditure have been processed via the Kenyan national Economic Impact Assessment model, set up to accept the economic structure of the communication industry according to the Kenyan Social Accounting Matrix (SAM).

How we arrive at these numbers

KPMG first carried out a “True Earnings” exercise for Safaricom in 2015 to identify the most material socioeconomic and environmental impacts of Safaricom and to quantify them in financial terms. During that year, Step 1 of the True Value methodology was carried out to estimate the True Earnings of Safaricom for the year in question.

Primary research enabled us to complete this exercise and to ascertain the social value created by M-PESA1, in particular. To quantify this social value, principles from the Social Return on Investment (SROI) methodology were used. SROI is an open-source, principles-based method used to account for social change. More detail regarding the 2014/15 True Earnings exercise can be accessed at: pdf/2016/07/case-study-safaricom-limited.pdf

Since 2014/15, True Earnings has been used by Safaricom as a way of understanding and expressing the value that the company creates for society. A decision has been made not to carry out the same level of primary research in the following years, but to extrapolate existing primary data and research points from 2014/15, or other years in which relevant data has been publicly available, to create a picture of the relevant period that is as accurate as possible. This has necessitated making certain informed assumptions, all of which have been interrogated internally and confirmed to be the most appropriate in the specific Kenyan context. For the 2019/20 True Earnings update, secondary data was updated with the latest available information. The update for 2019/20 did not include new/additional M-PESA products, new primary data, nor a renewed examination of any of the activities of the company.

Further research will be undertaken in the current financial year and the assumptions updated accordingly. This will be reflected in the FY21 True Value bridge.