South Africa’s transport authorities are advancing plans to restructure the financially strained Road Accident Fund (RAF) through a blended financing approach that would draw from both state resources and mandatory private sector contributions, Deputy Transport Minister Mkhuleko Hlengwa has disclosed.
The proposed shift comes as the department prepares to table the Road Accident Benefit Scheme Bill before Parliament within the current legislative session. The draft legislation aims to replace the current fault-based compensation system with a standardized, no-fault benefits structure designed to expedite support for accident victims while containing long-term liabilities.
Audit Clarity Pending on Liability Figures
While public discourse has referenced contingent liabilities ranging between R400 billion and R500 billion, Hlengwa urged caution regarding unverified figures. He confirmed the RAF is currently reconciling its financial statements after a prolonged dispute with the Auditor General concerning the inappropriate application of IPSAS accounting standards.
“The entity has reverted to the prescribed GRAP framework and is now subject to the standard audit cycle following the 31 March year-end,” Hlengwa noted. “Definitive liability assessments will follow the Auditor General’s final report.”
He added that the previous board’s litigation over accounting methodology had diverted critical resources from core operational mandates—a situation the current leadership has moved to rectify by withdrawing the legal challenge.
Accelerated Claims Settlement Underway
Addressing the backlog of outstanding claims, Hlengwa acknowledged the dynamic nature of the pipeline but pointed to measurable progress. Since September 2025, monthly disbursements toward settling pending claims have risen to between R4.2 billion and R4.6 billion, more than double the R2.1 billion average recorded in prior periods.
A comprehensive progress update on backlog reduction initiatives is scheduled for release before month-end. Complementary measures include expanded mediation channels to resolve quantum disputes without litigation and the reactivation of community outreach through the “RAF on the Road” initiative.
The department also reported a 6% year-on-year reduction in fatal road crashes—a development Hlengwa described as critical to long-term liability management, since fewer accidents directly translate to reduced financial exposure.
Core Elements of the Proposed Benefits Framework
The pending Road Accident Benefit Scheme Bill introduces three foundational changes to the compensation architecture:
- Elimination of fault determination: Victims would receive benefits without protracted investigations into liability, significantly shortening waiting periods.
- Uniform benefit schedules: Payouts would be calibrated against injury severity rather than individual earnings, addressing perceived inequities that disproportionately affect lower-income claimants. “The system must not function as a wealth-transfer mechanism,” Hlengwa stated.
- Revised eligibility for non-residents: The framework would require foreign visitors to maintain valid travel insurance and would limit access for individuals present in South Africa without legal status. The Minister referenced a single claim involving Belgian medical practitioners valued at approximately R100 million as illustrative of unsustainable exposure.
The department is currently pursuing an appeal to the Constitutional Court regarding the application of benefits to foreign nationals, arguing that legal status should be a prerequisite for eligibility.
Revenue Model Adaptation for Emerging Transport Trends
Hlengwa highlighted structural vulnerabilities in the RAF’s current funding mechanism, which relies exclusively on a 225 cents-per-litre fuel levy. With national policy accelerating the adoption of electric vehicles and promoting modal shifts from road to rail, fuel consumption—and consequently levy revenue—is projected to decline.
“To ensure intergenerational sustainability, we are modeling a hybrid structure that preserves the fuel levy while introducing a mandatory third-party insurance component, potentially administered through vehicle licensing renewal processes,” he explained.
The private sector’s involvement would extend beyond capital contribution to include risk-mitigation measures, such as supporting telematics-based monitoring of driver behavior to promote road safety.
Leadership Transition and Parliamentary Oversight
On governance matters, Hlengwa addressed the recent SCOPA resolution—passed 8-3—recommending criminal charges against former RAF chief executive **Collins Letsoalo**. He affirmed the department’s full cooperation with the parliamentary inquiry while noting that Letsoalo is no longer in the employ of the entity.
“We respect the committee’s processes and await the final report through established parliamentary channels,” Hlengwa said. “Our immediate focus remains on institutional stabilization and implementing the legislative reforms necessary for the RAF to fulfill its statutory mandate.”
He confirmed that the process to appoint a permanent board is in its final stages, with public commentary on nominated candidates under review. These steps, combined with executive-level disciplinary actions initiated in July 2025, form part of a broader governance restoration agenda.
Integrated Service Delivery Vision
Beyond compensation, the proposed reforms envision the RAF functioning as a coordinated post-accident support mechanism. This includes covering essential public healthcare costs related to crash injuries and maintaining a standardized death benefit—currently set at R17,000—to provide immediate relief to bereaved families.
A key operational objective is to establish direct engagement channels between the Fund and claimants, reducing dependence on legal intermediaries whose fees have historically absorbed a significant portion of allocated payouts.
With the Road Accident Benefit Scheme Bill slated for parliamentary introduction later this year, the department maintains that decisive legislative and financing reforms are essential to preserve the RAF’s capacity to support South African road users in an evolving transport and fiscal landscape.