Fiscal SpaceProposedMedium TermTransport

Road Accident Fund Structural Reform

Theme: Social insurance reform

First raisedNov 2021Last discussedSept 2024Dormant — not discussed in 12+ months21 meetings on the record ↓

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Assessment

Growth Impact3/5

Feasibility2/5

Responsible: Department of Transport / RAF / National Treasury / DOJ

Feasibility Assessment

Low-medium due to legal industry opposition. Actuarial case for RABS is overwhelming. Political will exists in Treasury; Parliamentary timetable is the binding constraint.

Stakeholder Landscape

Who backs this reform, who needs convincing, and which interests or red lines shape political feasibility.

Reviewer

Open review workspace

Backers

1 stakeholders

Negotiation weight

1 conditional actors

Opposition weight

0 opposing actors

Review coverage

0/2

All mapped stance notes are still draft

Provenance warning

Every mapped stakeholder stance for this idea is still draft. The coalition score is directional only until at least the high-influence actors are reviewed.

Coalition Read

81/100Coalition-ready

Anchor: National Treasury. Highest-leverage swing actor: COSATU.

Political Tractability

—Needs reviewed signals

No reviewed signals · 0% of mapped influence has been reviewed.

Backers1 stakeholder

National TreasuryCoalition anchordraftInfluence 9/10

Treasury supports RAF structural reform as the fund's unfunded liability represents a major contingent fiscal risk.

Interest: Fiscal consolidation with public debt stabilising below 75% of GDP; structural reforms that improve revenue without expanding contingent liabilities;…

Concern: Unfunded mandates in energy transition (JETP co-financing); Eskom's R400bn+ debt and how restructuring socialises costs; reform proposals that create…

Engagement path: Reforms must be fiscally neutral or revenue-positive over the MTEF window; SOE restructuring must demonstrably reduce contingent liabilities; credible…

Negotiation Priorities1 stakeholder

COSATUCritical swing actordraftInfluence 9/10

COSATU conditionally supports RAF reform only if accident victims retain access to adequate compensation without benefit cuts.

Interest: Worker protections under the Labour Relations Act and Basic Conditions of Employment Act; collective bargaining rights; equitable wage growth; just tr…

Concern: Labour market flexibility reforms that erode LRA and BCEA protections; Eskom unbundling without adequate just transition planning for NUM members; pri…

Engagement path: Meaningful social dialogue through NEDLAC before structural reforms are finalised; just transition funding ring-fenced in MTEF; skills retraining and…

Description

The Road Accident Fund (RAF), a statutory insurer that compensates victims of road accidents regardless of fault, carries an actuarial liability of R600 billion (2024)—equivalent to 10% of GDP—making it the largest contingent liability on South Africa's books after Eskom. The RAF is structurally insolvent: fuel levy revenue of R45 billion annually (2025/26) covers only current claims, while the unfunded liability grows by R50–80 billion per year as courts award increasingly large general damages. The RAF Amendment Act and the Road Accident Benefit Scheme (RABS) Bill, proposed since 2014, would replace the tort-based system with a no-fault social insurance model (fixed benefit schedules, income replacement for injured workers, functional rehabilitation rather than lump-sum damages). The reform eliminates the R20 billion in legal fees and disbursements that currently absorb 40% of the RAF's total payments, redirecting them to claimant benefits. The PC on Transport BRRRs 2021–2024 have unanimously recommended RAF structural reform for a decade, noting that the legal profession's opposition (protecting a R20 billion annual fee income) is the primary political obstacle. National Treasury's fiscal risk register classifies RAF as the highest-risk contingent liability.

OECD

Referenced in OECD Economic Surveys: South Africa

OECD SA Survey (2020, 2022, 2025). Related reform area identified across OECD surveys.

A R600 billion actuarial liability growing at R70 billion per year cannot be sustained—the Road Accident Fund will either be reformed or will collapse, and the question is only which happens first. — National Treasury Fiscal Risk Statement, 2025

International Comparisons

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🇨🇱Chile1981Savings rate from 5% to 21% of GDP; capital market depth enabled ~1–2pp structural GDP uplift

Chile replaced its pay-as-you-go pension system with mandatory individual accounts (AFPs) in 1981. By 2010, pension assets exceeded 70% of GDP — the deepest capital market in Latin America — funding domestic infrastructure and corporate bonds. The national savings rate rose from ~5% to ~21% of GDP over two decades. Chile's credit rating reached A+ (Fitch) — the only Latin American country at that level. SA's pension fund sector (>100% of GDP AUM) has limited appetite for domestic infrastructure; Regulation 28 reform lifting the limit on alternative assets is the direct SA analogue.

Approach

Chile replaced its pay-as-you-go pension system with mandatory individual accounts (AFPs) in 1981. Workers contributed 10% of wages to private fund managers competing for mandates. The system was supported by a fiscal guarantee for minimum pension. By 2010, pension assets under management reached 70%+ of GDP, making Chile's capital market among the deepest in Latin America and driving domestic long-term investment.

Timeline: 10 years to significant capital market depth; full maturity by mid-1990s

Lessons for South Africa

SA's pension fund sector is large (>100% of GDP AUM) but fragmented, with limited appetite for domestic infrastructure investment and regulatory barriers to alternative assets. The challenge is not savings volume but asset allocation. The GEPF's infrastructure mandates and Regulation 28 reform (lifting the limit on alternative investments) are the SA analogues. Chile's experience also shows the distributional limits of pure individual-account systems — SA's high informality means any mandatory savings reform must include a minimum guarantee for informal workers.

Parliamentary record

21 meetings

Committee sittings this reform was drawn from, most recent first. Each row opens the meeting on this site; the PMG link goes to the source record.

Status History

tracked since Mar 2026

Recorded as Proposed when status tracking began — held since at least Mar 2026.
Mar 2026

Data as of 2026-08-24 · latest PMG meeting 2026-08-21