KPMG has released its first True Value report in Africa, quantifying the value that Safaricom has delivered to the Kenyan economy.
The report finds that Safaricom generated a total of Kshs 315 Billion in revenues to Kenya’s GDP during FY2014/15, which accounted for a total of about 6% of GDP in total.
KPMG Director Neil Morris said “The True Value report aims to discover an organization’s value to both the economy and society beyond traditional financial reporting. It allows companies to identify how business leaders can better understand the impact their organizations have on an economy,”
The special report finds that Safaricom created a social value for Kenya at least nine times greater than their financial profit in the financial year 2015.
During the 2014/5 financial year, Safaricom’s operations sustained about 682,000 jobs in Kenya during the year, representing about 4% of the total economically active labour force in Kenya.
Safaricom remains a major contributor to the Government revenues and remitted Kshs 54.8 billion in FY 2014/15, with corporate taxes and excise duties accounting for 70% of the total revenues submitted to the republic.
MPESA created an estimated value of Kshs 133.8 billion in the 2014/15 financial year, this was four times the total amount of transaction fees earned by Safaricom during the same period.
Bob Collymore, CEO, Safaricom said “This tells us that there is a bigger story that has driven the Safaricom narrative over the last 15 years. We now have a picture of our True Value beyond our financial results. This value is directly attributable to our deep connection to this market, and our continued desire to create solutions for the mobile phones that can Transform the Lives of Kenyans,”
Safaricom commissioned KPMG to assess the broader economic contribution that its operations have had in Kenya– including its economy, job creation, tax revenue and poverty alleviation for the 2014/15 financial year.
KPMG employed data from numerous sources that include; industry values in terms of revenue from BMI, income statements from Safaricom for the 2014/15 financial year, National Accounts and labour force for Kenya from the Economic Intelligence Unit (EIU).
The procedure used estimates Safaricom’s economic impact and quantifies the social value created by MPESA which has produced sizeable social value for its customers, agents, merchants and partners.
This valuation prices Safaricom’s ‘True Earnings’ – a monetization of Safaricom’s financial, economic, social and environmental impacts for the most recent financial year.
The True Value assessment reveals that Safaricom creates social value several multiples greater than its’ financial value. For example, stakeholders experience four times greater social value than the transaction fees paid to Safaricom; as well as 86% of customer’s experience created by MPESA, due to increases in personal savings.