The South African road agency losing R21 billion every month

The Road Accident Fund (RAF) has revealed that it paid out R25 billion every month while receiving only R4 billion in return.

On Tuesday, Transport Minister Barbara Creecy led a delegation including the National Roads Agency (SANRAL), the RAF, and Airports Company South Africa (ACSA) to brief the Portfolio Committee on Transport.

The briefing centred on the entities’ annual audit and performance plans ahead of submitting these to Parliament’s budget review process, which is currently underway. 

The committee heard that the RAF is paying R21 billion more than it receives every month, and would not recover from this financial situation. Consequently, claims took a long time to be paid over the last financial year.

Donald Selamolela, the Committee Chairperson, said they acknowledged that the Transport Department was exploring funding models for the RAF that prioritise its sustainability.

“We appreciate the progress, and we strongly believe that the appointment of a new permanent CEO will assist the RAF. We hope the entity will transition and become financially stable,” he said.

The Minister added that the RAF plans to reduce its dependence on the fuel levy, especially given the rise of electric vehicles.

She added that it would instead focus on a no-fault system that doesn’t require determining who was responsible, which currently results in costly litigation.

Selamolela noted the irregular expenditure as particularly concerning, adding that the committee was determined to travel the road with the RAF.

“We are going to support the entity and walk this journey together, especially as it addresses the challenges it faces,” he said.

“Importantly, we note that the RAF Board has decided to revert to the government-wide accepted GRAP 19 accounting standard and that the entity has withdrawn from the costly litigation against the Auditor-General’s office.”

The department told the committee that several interventions were under way at the RAF and that the entity expects to see results.

Road Accident Fund levy increase on the cards

While Minister Creecy mentioned the RAF’s plans to reduce its dependence on the fuel levy, the entity has announced plans to increase the tax by 33%.

It revealed this in its 2025/26 annual report, wherein it claims to be “under-capitalised”, with its liabilities exceeding its assets by R439.5 billion.

The RAF blamed reduced fuel sales for impacting its current funding model and plans to increase the current R2.25-per-litre levy on petrol and diesel sold in South Africa to R3 per litre.

The entity said that rising fuel prices as a result of the ongoing conflict in the Middle East have affected its fuel sales and resulted in a loss of revenue.

The war between the US and Iran has been focused around the Middle East and led to restricted oil and petroleum product movement through the Strait of Hormuz waterway.

This has driven global oil price increases and, in turn, significant fuel price shocks, forcing households to cut down on fuel spending, which starved the RAF.

In 2025/26, the fund collected R47.8 billion in revenue, which was 4.6% lower than the R50.1 billion it recorded in the 2024/25 financial year.

According to the RAF, these fuel-linked levies make up 99.4% of its total revenue, and several factors have impacted its performance over the years, including keeping the levy at R2.18 per litre for four years.

While looking at raising the RAF levy, the fund’s management is exploring longer-term reforms, including converting settled claims ready for payment from immediate lump-sum settlements into periodic payments.

It said that by smoothing large cash outflows over time, annuity payments would reduce its immediate liquidity pressure.