RAF's Billion-Rand Service Collapse: Incompetence Outpaces Corruption in Scopa Findings

RAF’s operational failures cost billions as Scopa inquiry shifts focus from corruption to systemic breakdown

The Road Accident Fund’s deepest problem is not corruption. It is incompetence, and the scale of that incompetence is costing the fund billions of rands every year.

That is the central finding from Parliament’s Standing Committee on Public Accounts, which has completed its wide-ranging investigation into the troubled insurer. Scopa chair Songezo Zibi told Moneyweb that while the committee has serious concerns about corruption at the RAF and will recommend criminal charges and financial recoveries where warranted, the operational dysfunction it uncovered “dwarfs” those corruption concerns.

The committee’s investigation included engagement with attorneys, medico-legal practitioners and other professional service providers to the RAF. It identified specific operational failures as the primary driver of financial waste. Zibi pointed to the RAF’s failure to invest in technology and develop an effective information management system for handling claims and court cases as a prime example. “In my estimation, if it was to be run properly like an insurance company, it would be easy to save more than R5 billion that currently goes to legal costs and all such things per year, and that is a conservative estimate,” he said.

That figure alone frames the stakes.

Meanwhile, the criminal investigation into former RAF CEO Collins Letsoalo is advancing through the justice system. Scopa asked the Secretary to Parliament to lay a criminal charge against Letsoalo for failing to appear before the committee in response to a summons issued during the November 2025 inquiry. Zibi said Scopa’s legal team has since met with the South African Police Service, which has specified the documents it needs from the committee. Those documents are being provided. According to Zibi, SAPS indicated this is “not a complicated case, so they should be able to complete their investigation without undue delay.”

Other operational decisions that significantly damaged the RAF, including the new RAF1 claims form, changes to the fund’s accounting policy, and the closure of regional and satellite offices, present a different enforcement challenge. Those responsible are no longer employed at the fund, making disciplinary action moot. Scopa will instead examine cases involving gross financial mismanagement and is likely to recommend the recovery of funds from those responsible, while also considering whether financial misconduct charges should be brought. “We are taking legal advice on those instances,” Zibi said.

The structural problems Scopa identified extend well into governance. The committee will recommend changes to how board members and senior management are appointed, including clearer criteria and guidance to the Ministry of Transport on the skills the RAF board actually requires. Zibi was direct: the board urgently needs an IT specialist, because “at the heart of the RAF’s success or failure is how well it manages its information system.”

A separate governance failure involves the appointment of senior executives in acting positions without board consent. This arrangement has allowed the RAF CEO to effectively staff an entire executive committee in an acting capacity while claiming suitable permanent candidates cannot be found. “You cannot have an organisation where board members have no say in the appointment of a chief financial officer,” Zibi said. He cited an instance where board members could not recall the CFO being discussed during hearings, despite that person having initiated the change in accounting policy and litigation against the Auditor-General.

Scopa is processing its inquiry report in phases. Once completed in the next few weeks, it will be sent to all affected parties for further representations before being finalised and tabled in the National Assembly for a vote. The report will recommend measures to save public funds, ensure funds reach claimants, streamline the claims process, and propose legislative changes covering the fund’s financing, governance and overall mandate.

The recommendations will also address the RAF’s chronic underfunding. Zibi noted that the fund carries insurance-like obligations without being capitalised as an insurance entity. Even if governance and operational shortcomings are fully addressed, there will not be enough money to meet all claim obligations. Scopa will consider further submissions from experts, including Transport Minister Barbara Creecy’s suggestion that motorists pay a separate amount to fund the RAF when they first buy and annually renew their vehicle licence disc.

One possible recommendation is to cap damages or future loss of income claims to reduce the fund’s financial liabilities. “The minister of finance will at no stage in the next 50 years have R50 billion available. It’s just not going to happen and people need to accept that,” Zibi said. “The question then becomes how do we nonetheless have a RAF that fulfils its function, is still fair and just, and provides some kind of decent compensation for people but does not bankrupt itself.”

Zibi stressed that regardless of who runs the RAF, the fund needs greater clarity on its mandate, stronger protection from political interference through legislation, and prescribed standards for those appointed to run it, backed by independent oversight. He pointed to the insurance industry’s regulation by the Financial Sector Conduct Authority and the Prudential Authority as an important external oversight model. “The RAF is a quasi-insurance operation that just does its own thing with a massive exposure to the fiscus. That cannot work,” he said.

Whether the phased report, once tabled, translates into the legislative and governance reforms Scopa is recommending remains the question the fund’s millions of potential claimants will be watching most closely.