AFTER THE BELL: RAF crisis offers an opportunity to hit the brakes and fix a broken system

The Road Accident Fund (RAF) is facing a significant crisis due to unpaid claims, costly payouts, and a dwindling fuel-levy revenue stream. To address this issue, a new CEO, Waseem Carrim, has outlined his plans for reforming the system during an appearance on The Money Show. Carrim acknowledges the need to address both the demand and supply sides of the fund, particularly in light of rising fuel prices and the government's pressure to reduce fuel costs.

He proposes adjusting the compensation amounts for accident victims to ensure they are "commensurate with what should be paid out." Deputy Transport Minister Mkhuleko Hlengwa has also called for major changes, stating that the current system is not working effectively. Carrim suggests that the RAF was originally intended to protect accident victims from suing those responsible, which could lead to individuals being financially crippled for life if they are involved in an accident.

He believes that finding a reasonable balance in compensation amounts is crucial for the fund's sustainability. One of the major challenges the RAF faces is funding, as the current model relies on fuel sales, which disproportionately affects those who rely on minibus taxis and those driving electric cars. Carrim advocates for a more equitable approach, pooling the insurance problem across a larger population and managing it through the state.

However, he emphasizes that simply allocating more funds from the National Treasury is not a viable solution, as there is no money available to allocate. The article suggests that this moment of crisis presents an opportunity to reimagine the RAF and implement a comprehensive, thoughtful solution that can withstand the high accident rate in the country.