South African motorists filling up with petrol and diesel pay billions into a technically insolvent fund

South African motorists pay between R45 billion and R48 billion every single year to the Road Accident Fund (RAF) through the RAF Levy charged on fuel. 

This money is supposed to fund a compulsory third-party insurance provider for all users of South African roads, covering injury and death claims from motor vehicle accidents. 

However, the money is increasingly flowing into a bottomless pit, with financial mismanagement and an inadequate funding model resulting in the RAF being technically insolvent. 

The fund is sitting on an immediate claims backlog of around R100 billion, its management team said, although Parliament and the National Treasury say the situation is far worse. 

Treasury expects the fund’s long-term liabilities to rise to between R422 billion and R426 billion by 2028, jeopardising the country’s finances. 

Currently, the RAF is sitting with 440,000 outstanding claims on its books, while it has historically processed around 250,000 claims annually. 

In recent years, this processing volume has fallen to 70,000 claims per year, resulting in a backlog that has surged, while the average value per claim has spiked by 70%. 

The Organisation Undoing Tax Abuse’s (OUTA) executive manager, Julius Kleynhans, explained that the fund has been mismanaged and abused in recent years. 

In particular, bad actors within the legal fraternity have quadrupled the fees they charge per claim, which, if successful, are paid out by the RAF. 

“The RAF is so important. They need to start at the basics with the current reform agenda, and that begins outside of the fund,” Kleynhans told Newzroom Afrika. 

He explained that much of it comes down to improving road infrastructure to minimise accidents, while also focusing on adequate law enforcement. 

“Law enforcement has to be properly equipped and implemented across the country. There are too many vehicles in South Africa that are unreliable and should not be on the roads,” Kleynhans said. 

“There is still a significant amount of bribery that takes place with law enforcement. That has to be addressed first to minimise accidents and claims.”

Fixing the RAF itself

Fixing the fund itself will prove more difficult, as it desperately needs a capital injection and a new management team to execute its mandate. 

The difficulty of fixing the fund and the large sum of money required to do so have led some to call for the RAF to be scrapped altogether and replaced with mandatory private-sector insurance for motorists. 

“Fixing the RAF itself will be difficult. We know the board is looking at reform and specifically at ways to stop it from being abused,” Kleynhans said. 

“We have seen a lot of abuse, with lawyers and the legal fraternity benefitting from this and not in a positive way.”

This has resulted in the fund losing billions of rands to inflated legal fees and false claims, all the while it is struggling to pay out legitimate claimants. 

The government often refers to this as “financial leakage” within the system, with the average value per claim spiking by over 70%. 

“Minister Creecy has a lot of work to do. We are very positive about some of the actions she is taking as a minister,” Kleynhans said. 

Previous attempts to fix the RAF have included administrative clampdowns to increase the hurdle for successful claims. 

This was led by the rigid RAF 1 claim form, which was coupled with an administrative change requiring claims to be sent via registered mail. 

These changes were ruled unconstitutional, unlawful, and invalid at the Supreme Court of Appeal in May 2026. 

The adverse ruling means thousands of claims previously rejected under these rules could suddenly be forced back onto the RAF’s books. 

This would trigger an immediate liquidity crisis and require the government to step in with some form of funding to keep the fund operational.

These structural challenges have been compounded by a lack of management stability and a substantial lack of capacity at the fund. 

The RAF has spent two years without a chief claims officer despite its growing backlog, while criminal charges against its former CEO are being finalised. 

These charges centre on fruitless and wasteful expenditure, such as failed litigation attempts and multi-million rand staff award ceremonies.