Road Accident Fund Crisis: Executive Suspensions and R500bn Liability Scandal

South Africa’s Road Accident Fund (RAF) is experiencing its worst crisis in decades, with four top executives suspended and liabilities exceeding R500 billion threatening the compensation system for road accident victims.

Four Senior Executives Suspended

On November 8, 2025, the RAF board suspended four senior executives including acting CEO Phathutshedzo Lukhwareni, CFO Bernice Potgieter, and chief governance officer Mampe Kumalo. The suspensions follow explosive parliamentary testimony revealing financial mismanagement and accounting manipulation.

R500 Billion Liability Crisis

The RAF’s financial crisis has reached unprecedented levels with liabilities estimated at over R500 billion. The Auditor-General flagged R340 billion in liabilities for 2022/23 alone, while the fund reported a R2.3 billion deficit for March 2025 – a 44% increase from the previous year.

Accounting Manipulation Exposed

Parliamentary hearings revealed how RAF management abandoned government-approved accounting frameworks for IPSAS 42, reducing stated claims liability from R330 billion to R27 billion and effectively hiding massive obligations.

50,000 Claims at Risk

Approximately 50,000 valid RAF claims are in danger of prescribing due to the fund’s use of unlawful RAF1 Forms. Claims now take over three years to process, far exceeding the targeted 120-day turnaround time.

Wasteful Spending Revealed

Parliamentary investigations uncovered shocking procurement irregularities including:

• Marketing contracts worth R500 million each over five years
• Bucket hats priced at R11,500 each
• Former CEO’s security budget increasing from R480,000 annually to R150,000 monthly
• R232 million paid in performance rewards despite adverse audit opinions

Impact on Victims

The crisis has devastating consequences for road accident victims who depend on RAF compensation. With processing delays and thousands of claims at risk, vulnerable citizens are left without crucial financial support for medical treatment and rehabilitation.

Parliamentary Oversight

Transport Committee Chairperson Donald Selamolela expressed concerns about the interim board’s decision-making, while SCOPA continues investigating allegations of maladministration and misuse of public funds.

Looking Forward

The government has revived the RABS Bill as a potential solution, proposing a shift from fault-based to no-fault compensation. However, implementation challenges and the current financial crisis complicate this transition.

The RAF crisis represents one of South Africa’s most significant governance failures, requiring urgent action to prevent complete collapse of this critical social safety net.