The Road Accident Fund Is Broken. Here's What Should Replace It. #RAF

Added: 2026-06-02

[00:00:00]So, here's something interesting. Let's get one thing straight from the start.

[00:00:04]This essay is not about whether the Road Accident Fund is corrupt [music] or not.

[00:00:10]That, I believe, is a different conversation for a different day. Not today.

[00:00:16]What we're going to be interrogating here is the system itself, the architecture, the mechanics, [music] and the economic damage that I believe it's quietly doing to every single South African who fills up at the petrol station.

[00:00:30]Just off the bat, the RAF carries actual liabilities that are estimated between 400 and 500 billion rand against an annual fuel levy income of roughly 50 billion rand.

[00:00:42]A Supreme Court of Appeal ruling from April of 2026 revived close to 600,000 previously rejected claims, adding an estimated 180 billion rand in unbudgeted debt almost overnight.

[00:00:56]National Treasury projects liabilities reaching 422 billion rand by 2027/28.

[00:01:02]Every one of those rands traces back to that 2 rand 25 per liter that you pay at the pump. That's what's core to unpack here when we talk about RAF. Not scandal, at least not now, but the structure of how it operates.

[00:01:17]The Road Accident Fund was established under the Road Accident Fund Act of 1996 with one core promise, that anyone who was injured in a road accident on South African soil would be covered. The mechanism chosen was a compulsory levy at the pump.

[00:01:33]Buy fuel, you're insured. No paperwork, no opt-out, no choice.

[00:01:38]That last part, to me, was a slight problem.

[00:01:43]Every South African who purchases fuel is automatically enrolled into a system that they may never actually use, cannot exit that same system, and have no say in it. While that same system accumulates half a trillion rand in debt on their behalf. Can you see it? The problem?

[00:02:01]It's not insurance in any meaningful sense. It's a [music] tax. A tax on economically active people, the middle class in this country, many of whom already carry private vehicle insurance.

[00:02:11]To a fund that has a liability pool that disproportionately benefits those who don't contribute anything to it [music] at all.

[00:02:20]The indemnity argument that the RAF shields drivers from personal lawsuits for bodily injury actually collapses the moment you recognize that private third-party insurance already exists and does that.

[00:02:32]It works and it is available to every vehicle owner right now, privately. The RAF doesn't fill a gap in a market.

[00:02:39][music] It sits on top of one. The more honest model would be something like an opt-in RAF, a genuine last resort for drivers who cannot access private insurance. Choice, that's what it would give people.

[00:02:52]The state would look to cover its own employees, almost like how it does for Gems.

[00:02:58]Private individuals would cover private liability through insurance tied to vehicle licensing. This would be done proportionally to how much driving you actually do. What is not defensible is asking somebody in Soweto who fills up a 10-liter jerrycan to permanently subsidize a system that was broken before they were even born. Especially when the solution already exists in the private market and simply needs to be made mandatory and accessible. This is not about privatizing the state. This is about making the state work efficiently and a whole lot more leaner.

[00:03:32]But I want you to argue with me or put your case in the comments below.

[00:03:37]When we interrogate the following numbers, the picture becomes uncomfortable almost.

[00:03:42]Approximately 17 billion rand, that's 40% of the 43 billion rand collected annually by RAF, is absorbed by administrative and legal costs rather than direct victim compensation. Can you see the problem? Can you see it?

[00:03:57]Not by fraud, but by the process and the system itself. Most RAF attorneys work on a contingency. A landmark November 25 ruling, The Board versus Road Accident Fund, confirmed that the statutory 25% contingency fee cap must be VAT inclusive. Previously, some firms charged 25% plus 15% VAT, effectively taking nearly 29% of payouts. But even at a clean 25%, layer in things like disbursements, medical specialists, actuaries, accident reconstruction experts, and the victim walks away with barely 50 cent for every rand they were supposed to get.

[00:04:35]And that's actually in good cases. The RAF CEO came out and said, allegedly, that a single law firm received 2.2 billion rand from the fund over 5 years.

[00:04:45]When billions of rands seemingly flow through a system built around proving fault, a significant portion never actually reaches the person who was actually hurt.

[00:04:56]So, who is the RAF really serving?

[00:04:59]That's the question we've all got to start asking. There's something that we don't talk about publicly, or at least conversations aren't bubbling fast enough for me.

[00:05:08]The RAF's mandate extends to every single person who's injured within South Africa's borders, regardless of nationality or even legal status. April 2026, the Supreme Court of Appeal confirmed that even undocumented foreign nationals are entitled to claim.

[00:05:22]In a single recorded year, 546 million rand was paid out to foreign nationals alone.

[00:05:29]The fund is sustained entirely by South African fuel consumers, citizens of the country. A foreign national who fills up once or twice during a visit contributes a few rands to the RAF at the pump. Yes, that's true. And that contribution is used to argue that they are now covered, or should be covered. But, the numbers don't support that logic. Follow my train of thought here. A standard 10-day trip to Europe requires insurance policy that covers things like medical and public liability costs. And that sometimes is 900 rand plus for just 10 days. South African motorists spending between 20,000 rand to 30,000 rand on fuel annually, they contribute roughly 2,400 rand to 3,250 rand on average to the RAF over that same period. And those people are now subsidizing visitors who arrive to fill up once or twice. And they get full access to a fund that South Africans have been building their entire working lives.

[00:06:28]Again, not fair, at least to me.

[00:06:31]Europe resolved this differently, though. Under the EU's motor insurance directive, liability travels with the vehicle, not the territory. When a German tourist causes an accident in France, their own insurance pays, not the French state, not a French fuel levy. Cross-border coverage runs through the green card system entirely.

[00:06:50]Uninsured drivers are covered by national guaranteed funds financed by private insurers, not fuel taxes.

[00:06:56]A foreign visitor's liability is their own insurance problem. It's their private problem, priced into a premium paid before they crossed any border.

[00:07:05]South Africa absorbs all of this nationally at the pump.

[00:07:10]A few liters of petrol is not a meaningful insurance premium. It's actually not even close. And the gap between what foreign visitors contribute and what they can claim is yet another weight that South African taxpayers, the middle class, are quietly carrying.

[00:07:25]Well, not quite anymore, because platforms like this are raising the volume. Every South African household pays for the RAF at least twice, once at the pump and again in the price of everything that moves by truck or needs fuel to ultimately become a product for you. In May 2026, inland 95 unleaded sits at 26 rand 52 per liter. With that 2 rand 25 going directly to the RAF.

[00:07:51]Fill a 45 liter tank and 101 rand 25 cents enters a fund carrying almost a half a trillion in debt. The government slashed the general fuel levy to cents and zeroed out the diesel levy entirely after oil surged above 2000 rand a barrel following disruptions in the streets of Hormuz.

[00:08:10]The RAF levy stayed untouched though.

[00:08:13]So, today's fuel sales pay yesterday's court orders and cutting it for even a month would freeze hospital payments or some lawyers' fees.

[00:08:22]When diesel spikes, logistics companies pass that cost to retailers who pass that cost to customers, us.

[00:08:29]That geopolitical shock filters down to bread prices, maize prices, transport fares. Transport fares that go up and never really come down when you talk about taxis.

[00:08:38]With inflation edging towards the Reserve Bank's 6% upper boundary, rate cuts expected at the start of 2026 have shifted to a warning of a 25 basis point hike.

[00:08:49]Higher rates mean more expensive bonds, more expensive vehicle finance, less disposable income, all while fuel remains governmentally so.

[00:08:59]Governmentally so.

[00:09:01]The RAF levy sits inside every single link of that chain, mind you. We've got to then ask ourselves, is it reasonable that a fund in structural insolvency has this kind of grip on the national price level?

[00:09:13]The RAF's foundational argument that every South African needs collective protection from road liability doesn't actually hold when you examine who is paying and who is covered. Those same private vehicle owners, they already carry insurance to some or other degree and it's priced at the individual level.

[00:09:30]A 19-year-old who drives a GTI at night pays more than a 45-year-old who commutes in a sedan to work. Yet, both pay the exact same 2 rand 25 cents per liter into a fund that treats every single road user identically. At least, they say so.

[00:09:46]The state should cover state liability through the fiscus. Private individuals should cover private liability through mandatory third-party insurance built into vehicle licensing. The RAF would then shrink to a safety net for genuine edge cases. The levy drops, the fuel price drops. This isn't about abandoning victims. It's about who should logically be paying to protect themselves, or who should we be paying to protect?

[00:10:12]Also, we've got to talk about how economic growth that would be stimulated through us having lower energy costs.

[00:10:20]But, here's where the policy can move from argument to solution. South Africa is currently providing a hidden subsidy to every single foreign vehicle that crosses into [music] its borders. Yes, there's conversations about this changing, and I'm lending this voice to that. Using South African roads contributing nothing to their maintenance, or even sometimes the RAF, while local operators pay equivalent fees the moment that they cross into South Africa, Botswana, or even Zimbabwe. That's not fair. That asymmetry is just something that we deal with. But, this is a quantifiable hole that we have in our fiscus.

[00:10:56]By applying Zimbabwe's existing Beit Bridge border fee structure, which includes things like road access, gate access, carbon taxes, and toll components to an estimated 1.2 million South African vehicles which enter South Africa annually, the numbers become compelling. The potential for revenue becomes compelling. Commercial trucks crossing approximately 24 times per year, twice a month. This would be at something like 5,300 rand per entry.

[00:11:23]This would generate 7.7 billion rand alone. Public transport and light vehicles crossing roughly four times annually at between 1,054 rand and 1,300 rand per entry. This would add a further 4.95 billion rand to the fiscals. The grand total approximately 12.7 billion rand at current exchange rates.

[00:11:47]That 12.7 billion rand represents more than 60% of Sanral's typical annual budget for non-toll road maintenance currently funded entirely by the South African national treasury. This is also money that would come not from South African taxpayers, but from the foreign operators who have been using South African infrastructure for almost free while charging South African operators full rates on their side of the border.

[00:12:12]Reciprocity, that's what we need here.

[00:12:15]Then there's a gray fleet problem which kind of puts this into sharp focus. An estimated 440,000 foreign vehicles are currently operating in South Africa outside of any formal registration or temporary import permits or any tax framework. Charging those vehicles more or even starting to charge them the same reciprocal border fees just four times a year would generate over 1.8 billion [music] rand to South Africa. And this would then create a direct financial incentive for government to regularize that fleet for ongoing tax purposes. There's that thing that says once a government taxes you, they'll never tax you less. I think it could apply here.

[00:12:54]This new revenue stream of 19 billion rand or more combined reciprocal border fees with the modest 500 rand annual license surcharge on local registration.

[00:13:04]So every time you get a new license disk, this would give government the fiscal room to delink the RAF levy from the petrol price almost entirely. South Africans could then opt into RAF specific coverage at a transparent fair rate rather than being silently taxed every time they fill up for fuel. A coverage that I don't personally feel.

[00:13:25]The burden shifts to cross-border users and the gray fleet and other taxes.

[00:13:29][music] The middle class gets relief at the pump and the fund for the first time RAF would become accountable only to those who choose to use it. Choice. This is not a radical approach, guys. Not even by the least. It's reciprocity. It's what every other neighbor already does to us when we drive across the border.

[00:13:49]South Africa has a habit of sustaining broken systems past the point where reform feels like affordable. Until the cost of continuation becomes almost a crisis [music] existential. Eskom told us that lesson at enormous national expense. We can't fall for it again. The RAF is tracking that same arc. A fund conceived to shield ordinary South Africans from road accident devastation slowly becoming the mechanism that makes ordinary South African life more [music] expensive, more inflationary, and even more structurally fragile. [music] It's probably and likely slowing down our economic growth. The gap between 2 rand 25 at the pump and the 500 billion rand on the balance sheet that's owed is not an accounting problem. It's a policy failure 30 years in the making. And South Africa is running out of road to avoid answering for this failure. My dear South Africans, what a society chooses to protect and who it decides should carry that cost says everything about what it believes every life is worth. And unfortunately for you in the middle class, not worth much. The answer written into our fuel price in 2026 is one we can no longer afford to leave unchanged [music] or unanswered. Thank you for watching this video right up until this point. I hope it was just as interesting for you to watch as it was for us to make for you.

[00:15:07]Maybe you check out one of these other videos and hopefully they'll be just as interesting as this one. Cheers.