Written by Steve Murphy | Published on 22 Oct 2026 | BusinessDay
Auditor-general warns of ‘material uncertainty’ over Road Accident Fund’s future.
The Road Accident Fund (RAF) has been in the news for all the wrong reasons after publishing its March year-end 2026 results.
The auditor-general’s damning finding to parliament summed it up: “I draw attention to note 32 to the financial statements, which indicates that a net loss of R145.7bn was incurred during the year ended 31 March 2026 and, as of that date, the total liabilities exceeded its total assets by R439.49bn.
“As stated in note 32, these … indicate that a material uncertainty exists that may cast significant doubt on the entity’s ability to continue as a going concern.”
The facts below suggest this is an understated description of the problem. Any private sector insurer facing such an assessment would be forced to close. But the RAF cannot simply be closed: it has a vital role in compensating people injured in motor vehicle accidents and supporting bereaved families.
Its acting CEO at the time the report was drafted, Radikwena Phora, who is now chief internal audit officer, described that role as a “deeply human purpose”. He is right about the purpose, but the fund’s results give little reason to believe it is achieving it.
Consider that the RAF’s net liability position of about R439bn is equivalent to 18%-19% of South Africa’s 2026 budget — about a fifth of the cost of running the country. Eskom’s debt is about R320bn and Transnet’s borrowings total about R155bn.
The RAF’s liabilities exceed its assets by an amount comparable to those two figures combined. On the present trajectory its net liability position could exceed their combined debt in 2026/27.
The RAF’s net liability position is more than 5% of South Africa’s GDP. The fund owes compensation to 288,000 claimants whose claims are awaiting finalisation. More than 59% have waited five years or longer for settlement.
The prescribed statutory interest rate is about 10% a year. Interest on unsettled claims could therefore add substantially to the RAF’s current obligations, depending on how many claims attract interest.
On the figures cited here, the annual increase in outstanding losses could be R10bn-R40bn — as high as 80% of the fund’s annual income, before operating costs or claim payments.
To put the shortfall in perspective, the fuel levy allocated to the RAF would have to rise from R2.27/l to about R20/l to cover it. Even spreading the shortfall settlement between assets and liabilities over five years would imply a levy of about R4/l each year.
The uncomfortable truth is that the RAF is broken and possibly beyond repair. As its own annual report states: “Given its crucial role in compensating individuals affected by motor vehicle accidents, the RAF holds a crucial position within South Africa’s public service framework … it embodies a deeply human purpose serving injured persons … and households whose lives have been irrevocably changed by road trauma.”
It has failed, and continues to fail, to deliver on these noble ideas. The reporting improvements and measures described in the accounts bring to mind the saying “the operation was a success, but the patient died”. Accident victims may survive physically, but delays in settling claims can leave them and their families in financial distress, with serious consequences for dependants and household stability.
The department of transport’s failure to address the RAF’s rising liabilities and costs raises serious questions about whether it should continue overseeing the fund. Transport minister Barbara Creecy moved to change the board, but the department’s leadership has also failed to respond adequately to repeated adverse audit opinions from the auditor-general and advice from the Accounting Standards Board.
The RAF maintains that it should report as a social benefits fund, a position that would allow it not to recognise outstanding claims. But failing to report those obligations does not make them disappear. Yet the RAF leadership, its board and senior officials in the transport ministry accepted an approach that excluded claims not yet being negotiated or settled.
The RAF receives claims like an insurer, assesses them like an insurer and settles them like an insurer. It should therefore be structured and supervised like an insurer. The right expertise and regulatory focus should oversee the RAF. The correct move is to place the RAF under the finance ministry and apply insurance-focused standards, regulation and expertise.
But changing the reporting line alone will not be enough. The existing claims process needs fundamental reform. New claims appear to enter a system in which they have little prospect of being handled promptly. At the present performance level more than half of people injured in 2026 could wait more than five years for settlement. That is unacceptable.
The RAF needs help. It is foolish and unreasonable to expect the supervising body that failed to prevent the problems to now fix them. The collective expertise of short-term insurers — through the South African Insurance Association — should be sought.
The debate over changing the RAF’s funding model distracts from the more urgent problem. It is a classic example of Nero fiddling while Rome burned. The fuel levy is a direct and efficient way to collect revenue from road users: broadly, the more people use the roads, the more they contribute. The levy also limits administrative complexity and opportunities for fraud.
Electric vehicles present a legitimate funding question, but one possible response is to charge them a higher annual licence fee. These fees would not be around R1,500, as recently suggested, but closer to R3,675. The claim that foreign motorists do not contribute is also misplaced: they pay the levy when they buy fuel in South Africa.
The priority should be twofold: first, accelerate finalising the 288,000 unsettled claims and second, ensure the RAF settles claims fairly and promptly so it can fulfil its human purpose. Patching up a system that needs fundamental replacement will not achieve that.
Reform should address both existing claims and future ones: ringfence the RAF’s historic liabilities and create a new, insurance-structured entity, subject to appropriate oversight by the Financial Sector Conduct Authority and Prudential Authority.
South Africa’s record of service delivery and accountability to injured people is shameful. It is time for change. Leaders in the departments of transport and finance, and in the insurance industry, should speak up for people whose voices go unheard.