Road Accident Fund Crisis Deepens: R600bn Liabilities and 5-Year Settlement Delays Rock South Africa

Road Accident Fund in Crisis: Latest Developments February 2026

The Road Accident Fund (RAF) continues to face mounting challenges in February 2026, with new revelations about its financial crisis and operational failures dominating headlines. From staggering liabilities exceeding R600 billion to settlement delays stretching over five years, the state-owned insurer is under intense scrutiny from parliament and industry experts.

AA CEO Slams Government’s ‘Throwing Money’ Approach

Automobile Association South Africa CEO Bobby Ramagwede has delivered a scathing critique of the government’s handling of the RAF crisis. Speaking on February 18, 2026, Ramagwede argued that the government keeps “throwing money at the Road Accident Fund instead of fixing the root causes of road deaths.”

According to Ramagwede, the RAF is overfunded but poorly managed, with the system requiring fundamental reform before any fuel levy reductions are considered. He emphasized that road deaths are “a symptom of a broken transport ecosystem” rather than an inevitable norm.

“At the moment, the approach is to throw money at the problem instead of addressing the root causes. In an ideal world, you would have policies and procedures that minimise the need for the RAF.”

Staggering Financial Crisis: R600bn in Liabilities

Parliamentary hearings have revealed the true extent of the RAF’s financial crisis. Former board members testified before the Standing Committee on Public Accounts (SCOPA) that the fund has been technically insolvent since 1981, with liabilities consistently exceeding assets.

Key financial revelations include:

• RAF liabilities forecast to exceed R600 billion by 2022/23
• More than 320,000 outstanding claims in the system
• Average settlement time exceeding five years
• Over R215 billion paid out in social benefits between 2020-2025

SCOPA Hearings Expose Systemic Failures

The parliamentary oversight process has uncovered widespread mismanagement within the RAF. Former board members Nomonde Buyisiwe Mabuya, Thembelihle Nkosazana Msibi, and Zanele Lorraine Francois highlighted how structural and governance failures translate directly into hardship for claimants, hospitals, and families.

Critical issues identified include:

• A “highly litigious” operating model consuming revenue through administrative and legal costs
• 182 staff suspensions between 2020-2024 due to fraud-related disciplinary processes
• Default judgments accounting for 3%-5% of total liabilities
• Hospitals forced to close due to unpaid RAF bills, including Sunshine Hospital’s closure after R300 million in unpaid claims

Supreme Court Battles and Legal Challenges

February 2026 has seen significant legal developments affecting the RAF:

Supreme Court of Appeal Dismissals: The SCA dismissed with costs multiple RAF applications, including appeals against judgments on 181 court orders and reconsideration bids in unpaid medical claims disputes.

Compensation for Foreigners: The RAF is challenging court decisions regarding compensation eligibility for undocumented foreigners, with hearings scheduled at the Supreme Court of Appeal.

Proposed Reforms and No-Fault System

The transport department has proposed significant reforms to address the RAF crisis, including:

• Implementation of a no-fault compensation system
• Monthly payment structures instead of lump-sum settlements
• Exclusion of illegal immigrants from compensation eligibility
• Establishment of a dedicated RAF tribunal to reduce court backlogs

Infrastructure and Root Cause Analysis

Industry experts point to underlying issues contributing to the RAF crisis:

Poor Road Infrastructure: South African roads are described as being in their worst condition ever, contributing significantly to accident rates.

Vehicle Roadworthiness: More than half of vehicles on South African roads are reportedly not roadworthy, yet there are no active campaigns to address this critical safety issue.

Law Enforcement Failures: Current law enforcement focuses on “social debt collection” rather than behavior modification and genuine road safety improvement.

Impact on Healthcare System

The RAF crisis extends beyond transport, significantly impacting South Africa’s healthcare system. The Department of Health is owed between R1.6 billion and R1.7 billion by the RAF, leading to:

• Hospital closures due to unpaid claims
• Thousands of summonses issued by hospitals to recover unpaid bills
• Patients and medical staff left stranded
• Deteriorating healthcare services in affected areas

Political Leadership Challenges

Former RAF board members have raised concerns about their relationship with current political leadership. Since Transport Minister Barbara Creecy’s appointment in July 2024, the board reported minimal engagement on strategic direction, with their first interaction being described as a “hostile” AGM in September 2024.

Fuel Levy Implications

The RAF crisis has direct implications for South African motorists through fuel levy adjustments. PwC’s Budget Predictions 2026 report warns that both the general fuel levy and RAF levy are likely candidates for increases to address the funding shortfall.

Current RAF levy stands at R2.18 per liter, with experts suggesting it could be reduced to R1.90 if systemic issues were addressed and leaks plugged.

Looking Ahead: Reform Urgency

As SCOPA moves to the final phase of its RAF oversight inquiry, the pressure for comprehensive reform intensifies. The committee is compiling a framework that could reshape how South Africa approaches road accident compensation and prevention.

Key reform priorities include:

• Legislative changes to improve fund sustainability
• Enhanced governance structures and oversight
• Focus on accident prevention rather than post-incident compensation
• Improved transparency and accountability measures
• Integration with broader transport and safety policies

Conclusion

The Road Accident Fund crisis represents one of South Africa’s most pressing governance and financial challenges. With liabilities exceeding R600 billion and hundreds of thousands of claimants waiting for compensation, the need for comprehensive reform has never been more urgent.

The February 2026 developments highlight the interconnected nature of the crisis, affecting not just accident victims but the entire healthcare system and broader economy. As parliamentary oversight intensifies and legal battles continue, South Africans await decisive action to address this decades-old crisis.

The path forward requires political will, comprehensive reform, and a shift from reactive compensation to proactive accident prevention – a transformation that could benefit all South Africans while ensuring sustainable support for genuine accident victims.