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Road Accident Fund financial position is unsustainable, says CEO

The Road Accident Fund is more than R26 billion in debt despite 12% of the price of fuel being directed to the fund.

FILE: Picture: Supplied.

CAPE TOWN - The Road Accident Fund (RAF) says that its financial position is unsustainable despite billions of rands being poured into it every year from fuel levies.

This comes at a time when opposition parties have again called for a moratorium on levies until the price of fuel stabilises.

The fund’s annual report reveals that it has 198,285 claims outstanding that it has not paid out.

The Road Accident Fund is more than R26 billion in debt despite 12% of the price of fuel being directed to the fund.

In 2018 alone, the fund will receive 30 cents more per litre of fuel.

In the last financial year, 93% of the fuel levy income was used to settle claims.

But acting Chief Executive Officer Lindelwa Xingwana-Jabavu says in her annual review that the fund’s liquidity position remains unsustainable.

The board says that even though the estimated R9 billion it is expected to rake in through levies in 2018 will alleviate its productivity challenges, it won’t be enough to meet the backlog in claims that have not yet been paid out.

The backlog dates back to 2014 when the fund was in a serious cash crunch.

The fund’s current financial position makes it even less likely that another call for a temporary freeze on levies will be considered.

LISTEN: Road Accident Fund in deep financial trouble

(Edited by Zamangwane Shange)

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