Minister of Transport Barbara Creecy’s decision to dissolve the board of the Road Accident Fund (RAF) has been met with varied reactions from stakeholders, including the Association for the Protection of Road Accident Victims, the Parliament’s Standing Committee on Public Accounts (Scopa), and ActionSA.

The RAF has faced financial and administrative instability in recent years, including the suspension of its CEO, Collins Letsoalo, due to alleged corruption and his failure to appear before Scopa.

The entity, funded entirely by South African motorists through the fuel levy, has over R50 billion in annual revenue.

According to Creecy, the dissolution was necessitated by persistent governance and operational challenges at the RAF, which included protracted and costly litigation pursued by the RAF on accounting standards and the inconsistent handling of the suspension of the CEO.

Other reasons include the frequent incurrence of default judgments against the RAF, deep divisions within the board, and failure to fill critical executive positions like Chief Claims Officer and Head of Legal.

Deputy President of the Association for the Protection of Road Accident Victims, Ngoako Mohlaloga, said that his organisation was aligned by Creecy’s decision.

“We are hoping that the minister’s decision will be in the best interest of the victims because ours is for the victims. We are in alignment with the minister’s decision and we are hoping that her decision will fulfil its core mandate, which is to investigate administration within the RAF, which will result in compensating victims,” said Mohlaloga.

He stated that the board must ensure the organisation runs smoothly and that systems are in place for the RAF to function optimally.

Chairperson of Scopa, Songezo Zibi, warned that the dissolved board had to be replaced with one that is capable.

“The dissolution of the board came as no surprise. We’ve noted as a committee a number of underperformances by the board in overseeing the Road Accident Fund… It’s important that whoever steps in on an interim basis is capable, experienced, and strong-willed because it doesn’t help to replace one weak and problematic board with another,” Zibi said.

Earlier this year, Scopa heard that the head of legal lacked a law degree, a revelation made during the board’s appearance before the committee.

An inquiry was launched by the oversight committee to investigate allegations of maladministration, financial impropriety, and the misuse of public funds at the embattled entity.

The board’s dissolution, according to Zibi, was not unexpected.

“We’ve noted as a committee a number of underperformances by the board in overseeing the Road Accident Fund. We’ve highlighted the numerous vacancies in critical posts. The accumulation of default judgments that the Road Accident Fund does not defend amounts to R5 billion at the moment, at a rate of up to 100 million per week. We had said in our committee that this board is failing, so the decision is not surprising.”

ActionSA welcomed the decision to dissolve the RAF board, citing the entity’s history of mismanagement, corruption, and state failure.

“The RAF has become a cesspool of mismanagement, corruption, and a symbol of state failure.” 

The party had formally demanded the dissolution of the board after the RAF’s appearance before Scopa and findings from the Special Investigating Unit (SIU).

Creecy has requested the National Treasury to appoint an interim Accounting Authority and initiated a recruitment process for a new board.

Other steps include establishing an expert advisory committee to review the RAF’s business processes and have requested the SIU to consider expanding the scope of their investigation into the RAF.

mashudu.sadike@inl.co.za

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