The Road Accident Fund (RAF) in South Africa is facing a crisis that is often misattributed to a lack of revenue. However, according to businessman and entrepreneur turned civil activist, Wayne Duvenage, the real issues lie in years of weak leadership, poor administration, and inadequate oversight. The RAF's problems will not be solved by finding new revenue streams, but rather by addressing these core issues. The fund's current predicament is a result of inefficient systems, maladministration, and poor leadership.
Recent statements from the Department of Transport suggest that the government is considering alternative funding models for the RAF, including a third-party insurance scheme. This comes as electric and hybrid vehicles are expected to gradually erode fuel-levy revenue. However, Duvenage argues that it is futile to find new ways of pouring money into a scheme where funds are being wasted on a grand scale. The focus should be on fixing the RAF's operational issues rather than exploring new revenue streams.
The fuel levy is currently the simplest and least expensive way of funding road-accident compensation. It is collected automatically and approximates a user-pays system, where the more one drives, the more one contributes. Replacing it with a large annual charge or a hybrid version thereof would create affordability problems for households and small businesses. The levy also spreads the burden across small payments whenever motorists fill their tanks.
The third-party insurance model has failed before in South Africa. Introduced in 1942, it produced falsification, evasion, uninsured vehicles, disputes over valid cover, and gaps in protection. The government later moved to fuel-levy funding in 1986. A vehicle-based annual payment system would revive difficult questions, such as who would police millions of vehicles and what happens when an uninsured vehicle causes an accident.
The RAF has not been starved of money, with revenue growing from about R12.5-billion in 2010 to more than R50-billion in 2024/25. However, performance deteriorated during the same period, with employee costs increasing from about R590-million to R2.47-billion. General and administrative costs also rose significantly, from R240-million to R1.5-billion. These figures describe an institution whose costs have become detached from acceptable performance.
The greatest tragedy is the deterioration of claims management, with RAF liabilities standing at R46-billion around 2010 and ballooning ten-fold to around R450-billion. The obligations and backlogs have become a major fiscal risk for the RAF. Fortunately, Transport Minister Barbara Creecy dissolved the RAF board in July 2025, citing persistent governance and operational failures.
To reform the institution, the government should bring credible insurance professionals in to rebuild claims management and fraud prevention. The RAF operates much like a large insurer and requires specialists such as insurance executives, claims managers, forensic investigators, actuaries, medical experts, and information-systems specialists. The focus should be on reforming the institution rather than the invoice.
Key points
- The RAF's crisis stems from weak leadership, poor administration, and inadequate oversight.
- The fuel levy is an effective and efficient way of funding road-accident compensation.
- The government should focus on reforming the RAF's operational issues rather than exploring new revenue streams.
