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SA Policy Space

Road Accident Fund Structural Reform

Fiscal SpaceProposedMedium TermRaised 21× in committeeTransport

Theme: Social insurance reform

First raisedNov 2021Last discussedSept 2024No committee discussion in 12+ months21 meetings on the record ↓
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Reform at a glance

What changes
Road Accident Fund Structural Reform
Responsible actor (recorded)
Department of Transport / RAF / National Treasury / DOJ
Recorded status
Proposed — editorial assessment.
Milestone described by this status
Status scope has not yet been independently documented; it may cover only part of this reform.
Next documented milestone
Next milestone not yet documented
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Description

The Road Accident Fund (RAF), a statutory insurer that compensates people injured in road accidents, and the dependants of people killed in them, where another driver's negligence caused the crash, 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 Road Accident Benefit Scheme (RABS) Bill, first proposed in 2014, would replace this fault-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 National Assembly rejected the RABS Bill in 2020; the Department of Transport briefed the Portfolio Committee on Transport on reintroducing it in June 2025. 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.

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.

Where the numbers stand

All indicators →
  • Government Debt-to-GDP Ratio78.9% of GDP2026

    +10.1 pp from 68.8% of GDP in 2021, when this idea was first raised. National Treasury / IMF (WEO GGXWDG_NGDP)

  • Fiscal Balance-4.9% of GDP2026

    +0.6 pp from -5.5% of GDP in 2021, when this idea was first raised. National Treasury / SARB (Budget Review)

Next official read on this: Capital expenditure by the public sector, 2025 — due 29 October 2026 (Stats SA schedule).

Series tagged to this idea’s binding constraint. The period beside each value is the latest observation this site holds, which can lag the official release: the series are rebuilt offline from the sources named, not read live. Most recent retrieval: 2026-09-13.

Stakeholder Landscape

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

Backers

9

1 stakeholder

Negotiation weight

9

1 conditional actor

Opposition weight

0

0 opposing actors

Coalition Read

AI-drafted stances · 0 reviewed

2 of 38 actors mapped — not scored

A coalition score needs at least 3 mapped stances, or actors carrying 25% of the map's influence. The stances below are the evidence; the average over this few of them would not be.

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 anchorInfluence 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 actorInfluence 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…

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

View all →
🇨🇱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.

Edwards (1998) JEP; World Bank Chile Pension Review 2016; OECD Pensions at a Glance 2023

Evidence & Research

No linked research evidence yet. Coverage is incomplete.

Policy documents

No linked official-document evidence yet. Coverage is incomplete.

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.

All 21 meetings

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Status History

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

Data as of 2026-10-12 · latest PMG meeting 2026-10-09