Road Accident Fund Crisis Deepens: R518 Billion in Liabilities as South Africa Grapples with Reform – November 2025 Update

RAF Financial Crisis Reaches Critical Point

South Africa’s Road Accident Fund (RAF) is facing its most severe financial crisis in history, with liabilities now exceeding R518 billion while holding assets of just R33 billion. This means the fund owes approximately 15 times more than it owns, creating what experts describe as one of the country’s most challenging public finance situations.

Record Payouts Amid Financial Turmoil

Despite the mounting crisis, the RAF has achieved a significant milestone by paying out a record R5.5 billion in October 2025 – its highest monthly payout for the 2025/26 financial year. This follows R4.2 billion paid in September, demonstrating an upward trend in claim settlements under the newly appointed board.

From April to October 2025, the fund disbursed R20.2 billion in compensation to road accident victims, compared with R16 billion over the same seven-month period in each of the previous two financial years.

Systemic Governance Failures Exposed

Parliamentary Investigation Reveals Massive Irregularities

The Standing Committee on Public Accounts (SCOPA) has uncovered what’s being called the “worst scam in history” – a staggering R230 billion in hidden liabilities through accounting manipulation. The RAF’s use of the IPSAS 42 framework, which is unapproved for South African public entities, has caused “pervasive material misstatements” according to the Auditor-General’s office.

Five Consecutive Audit Failures

The Auditor-General has issued five consecutive disclaimers and adverse audit opinions, highlighting severe issues with financial reporting and controls. Key problems identified include:

• Default judgments growing from R1.6 billion to nearly R4 billion in one year
• Irregular expenditure exceeding R42 million
• Unauthorized banking detail changes and overpaid claims
• Vacant executive positions and procurement failures

New Board’s 100-Day Turnaround Strategy

Leadership Changes and Reform Initiatives

The new RAF board, appointed on August 8, 2025, under interim chairperson Kenneth Brown, has implemented several critical reforms during its first 100 days:

• Governance restoration: Reconstituted governance committees and launched independent assessments
• Financial discipline: Initiated audit action plans to address control weaknesses
• HR stabilization: Reviewed suspensions and dismissals while implementing recruitment plans
• Stakeholder engagement: Conducted regional roadshows and strengthened relationships with oversight bodies

The Human Cost of RAF Dysfunction

Victims Suffer While System Fails

The Law Society of South Africa (LSSA) emphasizes that RAF delays in compensation and rehabilitation worsen victims’ suffering. “The gap between injury and compensation is too long,” said Jacqui Sohn of the LSSA’s Personal Injury Committee.

Despite collecting nearly R50 billion annually through the fuel levy of R2.18 per liter (unchanged since 2019), spiraling administrative costs, legal fees, and alleged corruption have diverted funds away from crash victims.

Expert Analysis: Reform vs. Replacement

Competing Views on RAF’s Future

Wayne Duvenage, CEO of OUTA, argues that the RAF model could still succeed with proper management: “The fund can meet its mandate with good systems and leadership. The problem is mismanagement and cadre deployment.”

However, Professor Pfano Mashau from Durban University of Technology describes the RAF as emblematic of broader public sector crisis, citing “weak internal controls, political interference and a lack of consequence management.”

International Comparisons

Other countries have adopted different approaches:

• Kenya: Uses a fault-based system requiring third-party insurance
• Australia: Several states operate no-fault or hybrid systems with varying benefit structures

Looking Ahead: Critical Challenges

Immediate Priorities

The RAF board’s next phase focuses on:

• Finalizing and implementing a comprehensive turnaround strategy
• Executing consequence management for proven misconduct cases
• Filling critical leadership vacancies
• Implementing digital and operational reforms

Long-term Sustainability Questions

With the accumulated deficit growing from R13.6 billion in 2020/21 to R27.8 billion by 2024/25, fundamental questions remain about the RAF’s long-term viability. The proposed Road Accident Benefit Scheme (RABS) as an alternative continues to face criticism for potentially excluding vulnerable claimants.

Conclusion

The Road Accident Fund crisis represents one of South Africa’s most complex governance and financial challenges. While recent record payouts demonstrate operational capability, the underlying systemic issues require urgent, comprehensive reform. The success of the new board’s turnaround strategy will be crucial in determining whether the RAF can fulfill its mandate of providing dignity and fairness to road crash victims.

As investigations continue and reform efforts intensify, the coming months will be critical in determining the future of road accident compensation in South Africa. The stakes couldn’t be higher – both for the thousands of accident victims awaiting justice and for South Africa’s broader public finance integrity.

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