Road Accident Fund Crisis Deepens: Executive Suspensions, Financial Misconduct, and Debunked Claims – December 2025 Update

Road Accident Fund Under Fire: Latest Developments in South Africa’s Ongoing Crisis

South Africa’s Road Accident Fund (RAF) continues to make headlines for all the wrong reasons as December 2025 draws to a close. The state-owned entity, responsible for compensating road accident victims, faces mounting allegations of financial misconduct, governance failures, and controversial procurement decisions that have cost taxpayers hundreds of millions of rand.

Executive Suspensions Amid Financial Misconduct Allegations

Transport Minister Barbara Creecy has defended the precautionary suspension of key RAF executives, including the acting CEO Collins Letsoalo and the Chief Finance Officer, following serious allegations of financial misconduct. The suspensions, implemented in November 2025, were described by Creecy as “governance necessity” rather than punitive action.

Speaking to parliament in response to questions from EFF MP Mazwi Blose, Minister Creecy emphasized that the interim RAF board exercised its statutory powers under the Public Finance Management Act (PFMA) when it resolved on September 19, 2025, to take disciplinary action against the implicated executives.

“The interim RAF board accordingly exercised its statutory powers when it resolved to act on the various allegations of financial misconduct and suspended the implicated executives whose conduct has caused serious risks to the RAF’s governance, finances, and reputation,” Creecy stated.

The suspensions affect not only the acting CEO and CFO but also the chief governance officer and the head of the office of the CEO, all placed on precautionary suspension to allow for an independent investigation into administrative and governance matters.

Controversial Call Centre Deal Costs Taxpayers R297 Million

One of the most shocking revelations involves the RAF’s decision to terminate an internally operated call centre that cost R25 million annually and replace it with external service provider Alteram Solutions at a staggering cost of R199 million over 13 months.

According to investigative reports, the contract was concluded outside normal procurement processes in 2023 and was subsequently extended for 24 months without competitive bidding, at an additional cost of R307 million. Total payments to Alteram currently stand at R297 million – representing a cost increase of over 700% compared to the internal service.

This procurement scandal highlights the systemic governance failures that have plagued the RAF under suspended CEO Collins Letsoalo’s leadership, with documents showing significant process irregularities in the call centre procurement.

Debunking the R18 Billion Foreign Nationals Claim

A comprehensive fact-check by Africa Check has debunked widely circulated claims that the RAF paid R18 billion to foreign nationals over five years. The investigation reveals that the actual amount was closer to R8.6 billion – less than half of what was claimed by former CEO Collins Letsoalo and RAF spokesperson McIntosh Polela.

The inflated figure, which spread widely across social media and news outlets, represented just over 1% of all RAF payments over the five-year period from 2019/20 to 2023/24. When contacted about the discrepancy, the RAF’s communications department stated they “have no information regarding the origin of the R18 billion figure.”

Songezo Zibi, chairperson of the Standing Committee on Public Accounts (SCOPA), emphasized that foreign claimants represent a minimal fraction of total payouts, stating: “It can’t be foreigners, because the volume is just too small. There are other problems in the RAF.”

Accounting Manipulation and Hidden Liabilities

Central to the RAF’s current crisis is the controversial decision to change accounting practices without proper authorization. The entity switched from showing claims liability of around R330 billion in 2019/20 to under R30 billion in recent reports – a 90% reduction achieved through accounting manipulation rather than actual improvement.

This change involved switching to an unapproved accounting framework and slowing down claims processing to keep claims “in transit,” effectively hiding billions in debt from the books. The Auditor-General found this practice misleading and has been engaged in court battles with the RAF over the issue.

Parliamentary Inquiry Reveals Systemic Failures

The ongoing SCOPA inquiry has revealed a pattern of systemic governance failures, financial mismanagement, and maladministration at the RAF. The investigation, which began in October 2025, has uncovered evidence of rampant maladministration that goes far beyond the foreign nationals narrative.

Personal injury attorney Kirstie Haslam, who has been analyzing the parliamentary processes around RAF policies, described the R18 billion foreign nationals figure as “wholly inaccurate” and highlighted that recent figures show a decline in payments to non-South African citizens.

Road Accident Benefit Scheme: A Proposed Solution

Minister Creecy announced that her department is reintroducing the Road Accident Benefit Scheme Bill, which aims to reclassify the fund as a social benefit scheme and institute a no-fault compensation regime for claimants.

“The current dispensation is unaffordable due to the process of proving fault in settling claims of damages. The department is therefore intending to replace the current RAF dispensation with the Road Accident Benefit Scheme, prescribing a no-fault benefit dispensation to ensure financial stability of the fund,” Creecy explained.

Looking Ahead: Accountability and Reform

As the RAF crisis continues to unfold, Minister Creecy has indicated that the interim board will pursue various remedies to hold previous and current boards accountable. The executive authority plans to utilize Special Investigating Unit reports and other available information to ensure accountability for fiduciary duty transgressions.

The dissolution of the previous board was implemented as a measure to ensure accountability, while the ongoing investigations aim to restore stability and accountability within the RAF’s financial governance environment.

Key Takeaways

• Executive Accountability: Key RAF executives suspended amid financial misconduct allegations
• Procurement Scandal: Call centre outsourcing costs increased by over 700% without proper tender processes
• Misinformation Debunked: Claims of R18 billion paid to foreign nationals proven false – actual amount was R8.6 billion
• Accounting Manipulation: RAF used unauthorized accounting changes to hide billions in liabilities
• Systemic Failures: Parliamentary inquiry reveals widespread governance and administrative failures
• Reform Efforts: New legislation proposed to transform RAF into a no-fault social benefit scheme

The Road Accident Fund crisis represents one of the most significant governance failures in South Africa’s state-owned enterprise sector. As investigations continue and accountability measures are implemented, the focus remains on ensuring that road accident victims receive the compensation they deserve while protecting taxpayer funds from further mismanagement.

This article will be updated as new developments emerge from the ongoing parliamentary inquiry and investigations into the Road Accident Fund.