The Road Accident Fund (RAF) has long faced financial instability, a problem rooted in its very foundation. Established in 1946, the RAF has been battling structural and operational inefficiencies. However, the 2023-
In 2019, the RAF Board was tasked with a complete overhaul, with issues like mounting debt and unsustainable legal costs threatening the Fund’s survival. At its worst, the RAF owed over R16.2 billion in settled claims, and projections indicated it could spiral to R51 billion by 2023 if no changes were made.
The 2020–2025 Strategic Plan was developed to address these crises, focusing on reducing legal costs and improving claims handling. One major success has been cutting down legal fees, which had grown from R240 million in 1998 to a projected R30 billion by 2024. By emphasizing out-
The claims backlog has also shrunk, with 82% of claims now settled through agreement rather than litigation. However, a key challenge remains: 80% of the claims filed lack necessary documentation, further slowing the process. The RAF introduced stricter requirements to ensure smoother claims processing.
Financially, the RAF remains in the red. Despite a fuel levy freeze, inflation has worsened the deficit, which stands at R1.6 billion for 2023/24. Although this is an improvement over the R8.4 billion deficit of the previous year, it’s still far from ideal. The Fund continues to face rising claims liabilities as it works to clear its backlog.
The 2023/24 financial year saw an increase in claims expenditure, with R45 billion paid out, a 15% rise from 2020. This increase reflects the Fund’s commitment to resolving claims within 120 days, even if it drives up immediate costs.
Although the RAF’s turnaround strategy has yielded positive results, the organization isn’t out of danger yet. Legislative reforms and continuous operational improvements are necessary to secure its long-
