Road Accident Fund Crisis Deepens: Levy Increases and Reform Challenges in 2026

Road Accident Fund Faces Mounting Challenges as South Africa Grapples with Financial Crisis

The Road Accident Fund (RAF) continues to dominate headlines in 2026 as South Africa’s embattled compensation scheme faces unprecedented challenges. From fuel levy increases to technical bankruptcy warnings, the RAF’s struggles highlight the urgent need for comprehensive reform in the country’s road accident compensation system.

Fuel Levy Increases Add Pressure to Motorists

Finance Minister Enoch Godongwana’s Budget 2026 speech delivered a significant blow to South African motorists, announcing substantial increases to fuel levies that will take effect from April 1, 2026. The RAF levy will increase by 7 cents per litre, bringing the total RAF contribution to R2.25 per litre of fuel purchased.

Combined with increases to the General Fuel Levy (9 cents for petrol, 8 cents for diesel) and carbon fuel levy adjustments, motorists face a cumulative 21-cent increase per litre for both petrol and diesel. This development has drawn sharp criticism from industry bodies and taxpayer advocacy groups.

Bobby Ramagwede, CEO of the Automobile Association, expressed concern about the impact on consumers: “The Minister had an opportunity to provide much-needed relief to consumers in an effort to promote economic activity by making mobility more affordable. The prevailing inefficiencies of RAF won’t be remedied by ‘throwing more money’ at the problem.”

RAF Declared Technically Bankrupt

In a stark admission to Parliament’s Standing Committee on Public Accounts, Transport Director General Mathabatha Mokonyama declared the Road Accident Fund technically bankrupt. The fund faces an impossible financial equation: approximately R20 billion in annual claims against a budget of only R4.5 billion for settlements.

“The gap just increases, and the contingent liabilities grow. It will never be manageable,” Mokonyama stated, highlighting the unsustainable nature of the current operating model. Deputy Minister Mkhuleko Hlengwa reinforced this concern, noting that “RAF in its current form is a fiscal risk, not just for the state but for the claimants.”

The fund’s long-term provisions have ballooned to R387.4 billion, with projections indicating this figure will reach R426.2 billion by 2028/29. Despite annual fuel levy contributions exceeding R45 billion, the structural deficits continue to grow.

Reform Efforts and Legislative Challenges

The Department of Transport plans to reintroduce a reform bill to Parliament that was previously rejected in 2020. The proposed legislation aims to address some of the fund’s structural issues by:

• Limiting payments to lawyers
• Restricting compensation for foreign nationals
• Implementing a no-fault compensation system
• Replacing lump-sum payments with monthly installments

The no-fault system proposal, highlighted in February 2026 reports, represents a significant shift from the current litigation-based model. This approach could potentially reduce administrative costs and speed up claim processing, though it has faced resistance from various stakeholders.

Settlement Drives and Backlog Clearance Efforts

Despite its financial constraints, the RAF has intensified efforts to clear its massive claims backlog. The fund conducted its second Settlement Drive at Ngwelezane Hospital on February 20, 2026, as part of ongoing initiatives to reach claimants directly.

Earlier reports indicated that the RAF made more than 72,000 calls to trace claimants in an attempt to clear unpaid claims. These proactive measures demonstrate the fund’s commitment to serving beneficiaries despite operational challenges.

Legal Battles and Governance Issues

The RAF’s troubles extend beyond financial constraints to include significant legal and governance challenges. Recent developments include:

• Supreme Court of Appeal dismissal of the RAF’s appeal against a judgment involving 181 court orders in favor of Sunshine Hospital
• Ongoing investigations into R1 billion media contracts
• The fund’s decision to abandon its costly legal battle with the Auditor-General over disputed accounting standards
• Criminal charges against Free State High Court Judge Mpina Mathebula for alleged theft of RAF funds

Industry Response and Criticism

The Organisation Undoing Tax Abuse (OUTA) has been particularly vocal in its criticism of the continued levy increases. CEO Wayne Duvenage argued: “Increasing the levy by a further R1.5 billion per annum, without fixing the structural failures of the RAF, simply shifts the burden to motorists while liabilities continue to grow. South Africans are paying more into a system that remains fundamentally broken.”

Transport industry stakeholders have called for comprehensive reform rather than continued financial band-aid solutions. The consensus among critics is that structural changes are essential to address the fund’s sustainability crisis.

Looking Ahead: Reform Imperatives

As 2026 progresses, the Road Accident Fund reform remains a critical priority for South Africa’s transport sector. The fund’s technical bankruptcy status, combined with growing public pressure and fiscal constraints, creates an urgent imperative for legislative action.

Key areas requiring attention include:

• Streamlining claim processing procedures
• Implementing cost-effective compensation models
• Enhancing governance and oversight mechanisms
• Addressing fraud and corruption within the system
• Balancing claimant rights with fiscal sustainability

Conclusion

The Road Accident Fund crisis represents one of South Africa’s most pressing fiscal challenges in 2026. While fuel levy increases provide short-term revenue relief, they fail to address the fundamental structural issues plaguing the system. Comprehensive reform, rather than incremental adjustments, appears to be the only viable path forward for ensuring the fund’s long-term sustainability while maintaining its crucial role in supporting road accident victims.

As Parliament prepares to consider new reform legislation, stakeholders across the transport sector will be watching closely to see whether meaningful change can be achieved. The stakes are high – not just for the fund’s financial health, but for the millions of South Africans who depend on this critical safety net.

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