Public backlash against Safaricom’s services does not pull the firm back from improving the economy. A global consultancy firm called KPMG released a report dubbed True Value report in Africa. The report quantified the value that mobile service provider Safaricom has delivered to the Kenyan economy.
From the report, Safaricom generates a total of Kshs 315 Billion in revenue to Kenya’s GDP during financial year 2014/15, which accounted for a total of about 6% of GDP in total. “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,” said Neil Morris, Director, KPMG.
Safaricom has over the years improved societal value through their initiatives like Safaricom Foundation and other programs that nurture talent. The report stipulates that Safaricom’s societal value that was generated is at least nine times greater than their financial profit in the financial year 2015.
True value report further provides that, 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 continues to be a major contributor to the revenues of the Government 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. M-PESA created an estimated value of Kshs 133.8 billion in the 2014/15 financial year which was four times the total amount of transaction fees earned by Safaricom in the same period.
“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,” said Bob Collymore, CEO, Safaricom.
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.
To make sure that the findings are accurate, KPMG utilized data from a number of different sources including; 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 methodology used estimates Safaricom’s economic impact and quantifies the social value created by M-PESA which has generated sizable social value for its customers, agents, merchants and partners.
This assessment values 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 M-PESA, due to increases in personal savings.