Sorry South Africa – Driver’s licences make too much money

Driver’s licence fees contribute roughly R590 million to R620 million to the government’s pockets every year, creating a lucrative incentive to maintain the status quo.

South Africa is currently engaged in several efforts to improve its driver’s licence system, including the acquisition of a new card printer and a project to introduce digital licences.

However, both of these efforts were announced several years ago and have made very little progress.

Earlier this month, the Driving Licence Card Account (DLCA) revealed that it will still be a few years until the country gets a new physical driver’s licence permit and implements digital licences.

The printer acquisition, meanwhile, has stalled following a controversial tender appointment, where the Auditor-General highlighted several failures to meet key bid technical requirements.

In July, the Department of Transport filed papers with the Pretoria High Court to set aside the contract awarded for the new printer and re-run the tender application, effectively starting the process from scratch.

While all of this is going on, South Africa is left with a single unreliable printer and a system that requires motorists to pay to renew their physical cards every five years.

While the renewal fees vary per province, the average charge is approximately R250.

Of this sum, only R50-R60 goes toward the card itself, as the remaining R190-R200 is used to generate revenue for the state.

“The full application fee that you pay when you apply for your licence, renewal, or a duplicate — that full amount is not for the production,” explained former driving licence project manager Werner Koekemoer.

“I don’t know what the exact figure is. It was around R250, let’s say R300, for a new card application. No more than R50 or R60 of that should be for the production of the card.”

MyBroadband previously calculated the number of licence cards produced by the DLCA over the last three financial years by examining its financial results for 2021/22, 2022/23, and 2023/24.

It found that roughly 3.1 million cars are fabricated per year.

Based on Koekemoer’s estimate that only R50-R60 of the R250 fee goes toward the card itself, the government is pocketing around R590 million to R620 million per year.

A financial incentive to keep things as they are

Driving.co.za managing director Rob Handfield-Jones has made claims in the past that revenue generation is partly to blame for the government’s refusal to scrap physical cards.

He argued that there are are no practical or technological barriers that prevent a shift to digital licences and law enforcement in South Africa.

“Rather, the problem is the Road Traffic Management Corporation’s refusal to give up the revenue streams that go with analogue document production,” he said.

In addition to revenue generation, Handfield-Jones alleged that there are other vested interests preventing the shift to digital licences.

Ditching physical cards means the country would no longer need to rely on a single printer that has broken down several times in recent years, leading to extensive renewal backlogs.

It also means South Africa would no longer need to acquire a new printer at great expense.

One of the controversies surrounding the printer tender is the enormous cost, as the Cabinet had initially set a budget of R486 million.

However, this already-large sum ballooned to R899 million by the time the contract was awarded, raising questions over the calculations used to reach this figure.