Road Accident Fund Crisis: Executive Suspensions, Board Dissolution, and Financial Misconduct Allegations Rock South Africa’s RAF in 2025

Major Governance Crisis Unfolds at South Africa’s Road Accident Fund

South Africa’s Road Accident Fund (RAF) has been thrust into the spotlight in 2025 amid a deepening governance crisis that has seen executive suspensions, board dissolution, and serious allegations of financial misconduct. Transport Minister Barbara Creecy has taken decisive action to address what she describes as a “horror show” of mismanagement at the state entity responsible for compensating road accident victims.

Executive Suspensions Amid Financial Misconduct Claims

In a dramatic turn of events, the RAF’s interim board placed four senior executives on precautionary suspension in November 2025, including the acting CEO, Chief Finance Officer, Chief Governance Officer, and Head of the Office of the CEO. Minister Creecy defended these suspensions, stating they were necessary to ensure “the integrity and transparency of the investigative process.”

The suspensions followed multiple allegations of financial misconduct brought to the attention of the interim board. According to Creecy, the Public Finance Management Act (PFMA) requires the board to maintain effective financial systems and take disciplinary action against employees who undermine these systems or incur irregular expenditure.

“The interim RAF board accordingly exercised its statutory powers when it resolved on September 19, 2025, to act on the various allegations of financial misconduct and suspended the implicated executives whose conduct has caused serious risks to the RAF’s governance, finances, and reputation,” Creecy explained in parliamentary responses.

Complete Board Dissolution Following Persistent Governance Failures

The governance crisis reached its peak in July 2025 when Minister Creecy dissolved the entire RAF Board of Directors. This unprecedented action followed what she described as “persistent governance and operational challenges” that significantly undermined the fund’s ability to discharge its statutory mandate.

The key governance failures that led to the board’s dissolution included:

• Costly litigation: Protracted and expensive legal battles over accounting standards that strained the entity’s financial resources
• Executive mismanagement: Inconsistent handling of CEO suspensions that attracted legal challenges
• Default judgments: Frequent court defaults that exacerbated contingent liabilities
• Board divisions: Deep internal conflicts with most resolutions passed through casting votes rather than consensus
• Critical vacancies: Failure to fill essential positions including Chief Claims Officer and Head of Legal

Parliamentary Investigation Reveals Systemic Issues

The Standing Committee on Public Accounts (SCOPA) launched a comprehensive inquiry into the RAF’s financial matters in 2025, uncovering systemic governance failures and financial mismanagement. The investigation has revealed a substantial claims backlog and controversial accounting changes that have masked the true extent of the fund’s liabilities.

Central to the inquiry is the RAF’s unauthorized change in accounting practices. Before this change, the RAF’s 2019/20 annual report showed claims liability of around R330 billion. After switching to an unapproved accounting framework, this figure dropped to under R30 billion – a 90% reduction on paper that the Auditor-General found to be misleading.

Debunking the Foreign Nationals Myth

Amid the governance crisis, claims emerged that foreign nationals were “bleeding the RAF dry” with R18 billion in payouts over five years. However, a comprehensive fact-check by Africa Check revealed these figures to be grossly inflated.

The actual data shows:

• Total payments to non-South African citizens from 2019/20 to 2023/24: approximately R8.6 billion
• This represents less than half the claimed R18 billion figure
• Foreign national claims constitute just over 1% of total RAF payments
• In 2024/25, only R547 million was paid to foreign claimants out of R42.63 billion total

SCOPA Chairperson Songezo Zibi emphasized that the volume of foreign claims is “just too small” to be the cause of the RAF’s problems, stating: “There are other problems in the RAF.”

Financial Scale and Funding Mechanism

The RAF is funded primarily through a fuel levy currently set at R2.18 per liter, generating approximately R50 billion annually in revenue. The fund compensates people injured in vehicle crashes and families of fatal accident victims for financial losses.

Despite this substantial income, the RAF has faced financial difficulties for years, with liabilities far exceeding revenue. The controversial accounting changes have made it difficult to determine the true extent of the fund’s obligations to claimants.

Reform Efforts and Future Outlook

Minister Creecy has initiated several reform measures to address the crisis:

• Interim leadership: Appointment of an interim accounting authority while a new board is constituted
• Expert advisory committee: Independent panel to review business processes and propose recommendations
• Special Investigation Unit: Expanded investigation scope to cover recent events
• Legislative reform: Reintroduction of the Road Accident Benefit Scheme Bill to establish a no-fault compensation system

The proposed Road Accident Benefit Scheme aims to replace the current fault-based system with a no-fault benefit dispensation, potentially making it easier for accident victims to access compensation without costly legal proceedings.

Expert Analysis: Internal Failures at the Root

Legal experts analyzing the RAF crisis emphasize that internal maladministration, not foreign claimants, lies at the heart of the fund’s problems. Personal injury attorney Kirstie Haslam noted that the issue of non-South African citizen claimants “is not a major driver when it comes to RAF payouts and performance” compared to systemic governance failures.

The ongoing SCOPA inquiry continues to reveal the extent of mismanagement, with allegations including:

• Systemic governance failures
• Financial mismanagement and maladministration
• Substantial claims processing backlogs
• Controversial accounting practices designed to hide liabilities

Conclusion: Path to Recovery

The Road Accident Fund crisis of 2025 represents one of the most significant governance failures in a South African state entity in recent years. While the dissolution of the board and suspension of executives mark a low point, Minister Creecy’s decisive interventions and the ongoing parliamentary investigation offer hope for meaningful reform.

The debunking of inflated claims about foreign nationals has refocused attention on the real issues: internal mismanagement, accounting irregularities, and systemic governance failures. As the Special Investigation Unit continues its work and reform efforts progress, the focus remains on restoring the RAF’s capacity to serve South African road accident victims effectively.

The proposed transition to a no-fault compensation system could represent a fundamental shift in how the RAF operates, potentially addressing some of the systemic issues that have plagued the organization. However, success will depend on implementing robust governance structures and ensuring transparent, accountable management of this critical public service.