Safaricom’s Sh1.4 Billion Reckoning: How Kenya’s Most Profitable Company Stole a Man’s Idea and Got Caught

The judge did not mince words. Safaricom, Kenya’s most profitable company and the undisputed financial nerve of the East African economy, had taken Peter Nthei Muoki’s idea, deployed it at scale across millions of accounts, earned hundreds of millions of shillings from it, and never paid him a cent.

On May 8, 2026, the High Court corrected that injustice with a judgment that should alarm every boardroom that has ever looked at a lone innovator’s pitch deck and quietly decided it was cheaper to replicate than to license.

The damages stand at Sh1.4 billion.

But that figure, staggering as it is, understates the true scope of the financial exposure the ruling has created.

The court also directed Safaricom to pay Mr Muoki and his company, Beluga Ltd, an ongoing royalty equivalent to 0.5 percent of its gross M-Pesa revenue every financial year from March 31, 2025, for as long as the Manage Child Account, M-Pesa Go, or any substantially similar parent-child control functionality continues to operate on the platform.

That royalty, as things currently stand, is not a rounding error. It is a fixture on Safaricom’s income statement.

“Safaricom did not seek a license, they simply took it and the plaintiffs were deprived of a negotiating opportunity.” — High Court judgment, May 2026

WHAT 0.5 PERCENT OF M-PESA REVENUE ACTUALLY MEANS

To understand the gravity of the royalty order, one need only open Safaricom’s most recent annual results.

In its financial year ended March 31, 2025, M-Pesa revenue for Kenya alone stood at Sh161.1 billion, representing a 15.1 percent growth year-on-year and accounting for 41.1 percent of total service revenue.

At the mandated rate of 0.5 percent, Safaricom owed Mr Muoki and Beluga Ltd approximately Sh805 million in royalties for the financial year ending March 2025 alone, and this is before the compounding effect of M-Pesa’s projected continued growth.

In the financial year ending March 2026, the numbers are even larger.

Safaricom’s latest earnings release, published just two days before the judgment landed, revealed M-Pesa revenue had climbed a further 13.4 percent to Sh182.7 billion.

That means the royalty obligation for FY2026 will be approximately Sh913 million, assuming the court order survives the appeal Safaricom has signalled it will file.

At projected growth rates, the annual royalty payments to Mr Muoki will exceed one billion shillings within the next two financial years. Multiplied across a decade of operation, the total liability dwarfs the headline Sh1.4 billion damages figure by an extraordinary margin.

At M-Pesa’s current trajectory, Safaricom could be writing Peter Muoki a cheque of over Sh900 million every single year for the foreseeable future.

Safaricom secured a 30-day suspension of enforcement pending an appeal to the Court of Appeal.

That suspension does not extinguish the liability.

It merely delays it. Every day the appeal runs, the royalty meter runs too.

And Safaricom is appealing a judgment in which the court was explicit that its award was deliberately conservative, finding that one percent of a single year’s M-Pesa revenue was a commercially reasonable baseline, then ordering half that rate as the permanent forward-looking royalty.

THE COURT’S LOGIC AND WHAT SAFARICOM WILL STRUGGLE TO REBUT

The ruling rests on findings that are difficult to dislodge.

Mr Muoki’s M-Teen Account was a registered literary work under Kenyan copyright law, documented with the Kenya Copyright Board before he ever walked into a Safaricom office.

He approached the company in March 2021. He was told the concept was problematic because minors lacked national identity cards and CBK approval would be required.

Safaricom officials nonetheless indicated they were considering something similar. Months later, he discovered the company was beta-testing a product with functionality virtually identical to his own, deployed under the name Manage Child Account.

Safaricom’s defence collapsed on two fronts.

It argued that it had engaged Huawei to develop the parent-child functionality independently from September 2020, six months before Mr Muoki’s pitch.

But the court found this chronology unconvincing and, more damningly, dismissed Safaricom’s claim that the concept originated from a verbal instruction by the Central Bank of Kenya governor to address minors’ access to betting platforms.

The judge’s response was withering: it is not the CBK Governor’s duty to advise Safaricom on product features.

A company of Safaricom’s size, the judge noted, does not act on undocumented verbal instructions from a regulator. It acts on boardroom decisions, and those decisions happen to have closely followed a documented pitch from an outside innovator.

The court also declined to issue a permanent injunction shutting the product down, reasoning that millions of parents and minors now rely on the functionality and disruption would be disproportionate.

Safaricom may be tempted to read this as a partial victory. It is not. The court’s restraint on injunction relief was an act of public interest, not sympathy for the defendant. It preserves the product precisely so that the royalty payments can flow indefinitely.

A SERIAL PATTERN THE COMPANY CANNOT AFFORD TO IGNORE

The Muoki judgment does not exist in isolation. It arrives at a moment when Safaricom is simultaneously defending or managing a cascade of intellectual property and copyright claims, a pattern that collectively paints the portrait of a company with a cultural indifference to creative and innovative ownership.

Broadcaster and voice artist Peter Oyier is currently before the Commercial Division of the High Court seeking Sh69.3 million from Safaricom, alleging the company used his voice recordings in its Interactive Voice Response system for platinum clients for six years beyond the expiration of their licensing agreements.

The contracts, signed between 2018 and 2022 through MGM Studios, were each valid for two years. Oyier claims Safaricom simply kept using the recordings after they lapsed, ignoring his repeated requests for renegotiation, and that the extended association of his voice with the Safaricom brand has permanently damaged his ability to secure work with competing companies.

Safaricom’s response has been to claim there was no direct contractual relationship between itself and Oyier at all, relying on the privity argument that its agreement was with MGM Studios, not the artist.

That defence, if it fails, would suggest that Safaricom deliberately structured its creative licensing arrangements to insulate itself from direct accountability to the creators whose work powers its products.

Gospel musician Jemmimah Thiong’o has been locked in a nine-year copyright battle with Safaricom over 39 of her songs, which she claims the company distributed on its Skiza Tunes platform without paying her a single shilling in royalties since 2009.

The case, now set for substantive hearing in November, seeks Sh15 million and a full accounting of all revenue derived from her catalogue. Safaricom’s defence hinges on its agreements with music aggregators.

It is precisely the same structural argument it deployed in the Oyier case: we paid the middleman, therefore we owe the creator nothing.

Five music producers are simultaneously before the High Court over a separate Skiza Tunes dispute involving 400 songs. The court rejected Safaricom’s attempt to have that case struck out in early 2025, a further indication that the judiciary is losing patience with the aggregator-as-shield defence.

The pattern extends further back.

In Alternative Media Ltd versus Safaricom, a 2004 civil case, the company was found guilty of using copyrighted artwork without permission and was ordered to pay damages and withdraw the material from the market.

Rapper Simon Bamboo Kimani won Sh4.5 million against the company in a copyright case that became a reference point for subsequent proceedings. Musician Joseph Kimani later used that precedent in his own copyright litigation against the company.

An earlier dispute involving marketing agency Transcend Media Group alleged that Safaricom had awarded a campaign to a rival that had lifted intellectual property from Transcend’s bid, a claim that triggered protracted litigation in 2016.

What emerges from the record is not a series of isolated misunderstandings. It is a playbook: engage the innovator, decline to license, deploy the concept, then litigate if caught.

THE FINANCIAL DAMAGE IS ALREADY BAKED IN

Even assuming Safaricom wins its Court of Appeal challenge and the Sh1.4 billion damages award is set aside or reduced, the reputational damage is now systemic.

The judgment has created a public, judicially-confirmed narrative that Kenya’s dominant telecommunications company looked a small innovator in the eye, took his work, and fought him in court for years rather than negotiate a licence.

The court said so explicitly: Safaricom deprived Mr Muoki of a negotiating opportunity. That finding will outlast any appeal.

For institutional investors, the judgment raises a compliance question that goes beyond any single case. Safaricom’s market capitalisation on the Nairobi Securities Exchange sits at well over Sh350 billion.

Its dividend obligation is roughly Sh48 billion per annum.

An indefinite annual royalty that could exceed Sh900 million is not a material threat to solvency, but it is a recurring drag on free cash flow that now has to be disclosed, provisioned for, and explained to shareholders every reporting cycle.

Every time M-Pesa grows, the royalty obligation to Mr Muoki grows with it. Safaricom’s own growth strategy has become, in part, the instrument of its liability.

There is also the speculative risk the judgment creates for Safaricom’s entire product development pipeline. M-Pesa is no longer merely a payments platform.

It is a financial services ecosystem encompassing credit, savings, insurance, merchant payments, and cross-border transfers, with ambitions to replicate across Ethiopia and beyond.

Every one of those product verticals was, at some point, an idea that existed outside Safaricom’s own walls before the company built it.

The question that innovators, lawyers, and investors will now ask is how many of those verticals came with a licensing agreement, and how many came with the same informal encounter Mr Muoki experienced in March 2021.

THE PRECEDENT THAT WILL SURVIVE THE APPEAL

Regardless of what the Court of Appeal does with the damages quantum, it cannot undo the trial court’s findings of fact. Safaricom infringed Mr Muoki’s copyright. The product is a copy. The company benefited commercially from it. Those findings are conclusions of fact, and appellate courts are traditionally reluctant to overturn factual findings made after a full hearing where witnesses were examined.

What the appeal may contest is the methodology used to calculate damages, the appropriateness of the revenue royalty as a remedy, or the rate applied. Even a successful appeal on quantum, however, leaves intact the core finding of liability.

It leaves intact the judge’s observation that innovation does not only emerge from corporate boardrooms, and that David can prevail against Goliath when evidence is properly marshalled.

It leaves intact the precedent that an innovator who registers their concept, documents their pitch, and pursues litigation with discipline can extract not just historical damages but a permanent seat at the table of a company that stole from them.

That precedent will be cited in every subsequent intellectual property claim filed against Safaricom. Peter Oyier’s lawyers are already watching. Jemmimah Thiong’o’s lawyers are already watching.

The five producers in the Skiza dispute are watching.

And somewhere in Nairobi, there are other individuals who pitched ideas to Safaricom’s product teams in recent years, noticed familiar features appear in subsequent releases, and have until now lacked the proof, the resources, or the courage that Peter Nthei Muoki assembled over four years of litigation.

They are watching too.