2 days ago
Inside the RAF's broken books — CEO Letsoalo's court bid fails, deficit stays
Embattled Road Accident Fund CEO Collins Letsoalo's court bid to keep his seat may have failed, but his possible ousting and the pending Scopa inquiry highlights the fundamental problem with the RAF's books that no fuel levy increase can fix.
On Thursday, 26 June the Pretoria High Court dismissed suspended Road Accident Fund (RAF) CEO Collins Letsoalo's bid for reinstatement, finding his application to be vexatious. Letsoalo, who was suspended by the board four weeks ago on Monday, 3 June 2025 after allegedly failing to attend a Scopa hearing in breach of a statutory summons, now finds himself on the wrong end of a governance crisis.
Judge Nasious Moshoanathe ruled that Letsoalo failed to show any factual or legal right to an urgent interdict.
The court's decision was welcomed by the Association for Protection of Road Accident Victims (Aprav). 'This is a watershed moment for the fund's governance,' said Ngoako Mohlaloga, Aprav deputy chairperson.
'The ruling is a crucial affirmation of the board's contractual authority and reinforces the principle that no one is above scrutiny.'
The impending Scopa inquiry announced on Tuesday, 24 June, which was scathing in its condemnation of the board and executive, will in part lay bare the problem that has been evident on the RAF's books for ages.
What's in a clean audit?
The last clean audit that the RAF received from the Auditor-General of South Africa (AGSA) was for the 2018/2019 financial year – which is an indication that financials were transparent and verifiable – but it merely confirmed the size of the hole at the RAF, not that it was in good running order. The total liabilities at the time were a staggering R273-billion, with the state-owned enterprise(SOE) clearly insolvent.
By the next financial year, the challenges had only worsened, with total liabilities now at R332-billion for 2019/2020. The fuel levy remained stable while costs and claims continued to rise. But no reform followed.
It was during this ailing period that Collins Letsoalo was appointed as acting CEO in April 2020 under then Minister of Transport Fikile Mbalula, with the role being made permanent in August 2021.
On the books at least, RAF seemed to be turning a corner.
A turnaround on the books
When Letsoalo took the CEO's seat, the RAF appeared to make one of the most astounding SOE turnarounds to date – liabilities dropped from R332-billion to around R31.5-billion, and a surplus was reported. The AGSA also provided the RAF's audit status as 'disclaimer lifted' – meaning that it accepted the restatement but flagged ongoing risks.
On paper, it looked like the RAF was resolving its challenges with an alacrity not seen in any other SOE – but that's the only place the change was: paper.
What caused the RAF to reflect such an incredible transformation was a change of key reporting metrics and mechanisms, restating the way it presented its financial position. Instead of recording the full long-tail liability upfront, the liability was spread across the cost over future levy income, which shrank liabilities overnight.
This accounting shift produced a paper surplus and temporary breathing room, but the underlying claims backlog stayed firmly in place.
In its April 2024 statement, the RAF argued: 'The RAF is fundamentally a social security fund.'
The AGSA accepted the technical adjustment but repeatedly warned that the solvency gap was merely deferred, not resolved.
Reality puts the books in reverse
Once the restatement effect faded, the fund slid straight back into deficit. The AGSA issued another disclaimer, citing persistent gaps in how claims liabilities were accounted for and managed. Internal controls failed to keep pace with real claims growth, and cash flow again fell short of the paper surplus.
Letsoalo's contract expires in August 2025 – but after his failed bid at reinstatement, the prospect of a reappointment is now remote. Asked whether the fund will now advertise and fill the CEO post permanently, RAF spokesperson McIntosh Polela was noncommittal, telling Daily Maverick in a written response: 'The board will give direction in this regard.'
What this means for you
Behind the annual disclaimers sit thousands of South Africans with years-long payout delays. The RAF boasts that claimants now receive 83% of spending compared to 66% in 2018/19 – but without fixing the core funding model, no efficiency will close the gap;
Every litre of fuel props up old claims with no capital reserve to break the cycle.
Despite record fuel levy revenue in 2023/24, the core mismatch hasn't budged. The fund's own statements show a bigger share of costs now goes directly to claimants – but total payouts still exceed income by billions.
Cash reserves cover days, not months.
Scopa's full committee inquiry – only the fourth of its kind since 1994 – is now Parliament's last tool to force overdue reform.
Judge Moshoanathe's ruling laid the governance crisis bare: the board failed, the CEO's restatement trick failed, and Parliament's oversight has arrived years too late. The only question left is whether Scopa will confront the truth everyone pays for – a complete overhaul of the RAF. DM
