By Ragheema Mclean
The Road Accident Fund (RAF) is grappling with severe financial and operational difficulties, despite ongoing efforts to stabilize the organization.
The state-owned enterprise is facing a substantial deficit of R1.6 billion the financial year 2023/24.
In the past year, the RAF processed 63,015 claims out of 79,377 registered. The fund disbursed approximately R12.7 billion for general damages, R2.6 billion for loss of support, R1.7 billion for medical compensation, and R47 million for funeral costs related to road accidents.
According to the fund a significant factor contributing to its financial issues is the failure to adjust the fuel levy, which has traditionally been a key source of funding.
RAF CEO Collins Letsoalo said the fund is also contending with high legal costs and a growing backlog of claims, which increased by 1.2% from 2022.
“We had a deficit of R1.5 billion coming from R8.4 billion the previous year. That must show you what we have done. So, there is a marked improvement in that. We would not like to show a surplus. We always want to be somewhere closer to zero because that’s where the social benefit fund was. We don’t want to make a loss,” said Letsoalo.
Speaking on VOC’s NewsBeat show Wayne Duvenage, CEO of the Organization Against Tax Abuse (OUTA) criticized the organization’s management for failing to address these issues effectively.
“They’ve had above-inflation increases for the last two decades up until three years ago when the current finance minister decided not to increase the levy, so they cannot say they don’t have enough money. The RAF needs to be managed properly,” he said.
He further criticized the RAF’s reliance on government funding rather than focusing on internal reforms.
“Instead of fixing the problem, they keep running to government for more funding. They need to put the proper structures and systems in place,” Duvenage added.
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