The Road Accident Fund (RAF) is facing an unprecedented financial crisis, with escalating road accident claims far exceeding its ability to pay. The situation is dire, with fuel levy receipts barely covering the entity’s mounting debts. A dispute with the Auditor-General of South Africa (AGSA) has placed the liabilities at over R300 billion in the red ¹.
The AGSA has warned that the RAF is nearing a critical financial crisis, with current and long-term assets unable to cover current and long-term liabilities. The entity’s financial statements reveal a deficit of R1.5 billion for the 2023/24 financial year, with an accumulated deficit of R25.5 billion and total liabilities exceeding total assets.
Key Challenges Facing the RAF:
- Escalating Claims: The number of road accident claims is increasing, putting a strain on the RAF’s finances.
- Insufficient Funding: Fuel levy receipts are not enough to cover the entity’s debts, leading to a significant shortfall.
- Accounting Dispute: The AGSA has raised concerns about the RAF’s accounting practices, which has resulted in a dispute over the entity’s liabilities.
- Irregular Expenditure: The AGSA has identified irregular expenditure of R362 million, mainly related to Project Siyenza.
The RAF’s financial crisis has significant implications for road accident victims and the broader public. It is essential that the entity addresses its financial challenges and implements sustainable solutions to ensure its long-term viability.
