Barbara Creecy announces changes at Road Accident Fund

The interim board chairperson is Kenneth Brown from the National Treasury.


Minister of Transport Barbara Creecy has announced the appointment of an interim board at the Road Accident Fund (RAF).

This is after the previous board was dissolved in July.

Creecy announced the changes in a media briefing on Friday, where she updated the country regarding the boards of directors of some SOEs under her department.

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“Yesterday, parliament approved the appointment of an interim board of the RAF for six months, or until a new permanent board is appointed, whichever comes first,” Creecy said.

The board will be chaired by Kenneth Brown, who currently serves on the board of the Development Bank of Southern Africa (DBSA) and has worked for the National Treasury for 20 years. Nonhlanhla Mabusela is the deputy.

“As we all remember, the previous board was dissolved in July due to its failure to act in the best interest of the entity and to fulfil its fiduciary duty,” Creecy said.

ALSO READ: R25.5 billion deficit over five years — Can RAF afford to pay out claims?

“It therefore became urgent and necessary to close the governance vacuum in the RAF leadership and it is for this reason that we ask the Cabinet to approve the appointment of the interim board.”

The minister and her deputy, Mkhuleko Hlengwa, met with the interim board on Thursday and shared the challenges at the RAF.

They will be expected to address efficiencies in governance and control systems, including the frequent default court judgments against the RAF.

RAF Scopa briefings

In May, parliament’s standing committee on public accounts (Scopa) heard that the RAF had accumulated more than R4 billion in default judgments while failing to appoint either a head of legal services or a chief claims officer.

In one case in May, the RAF attempted to overturn a R6 million judgment by filing false statements with the court and then proceeding not to argue its own application.

ALSO READ: R25.5 billion deficit over five years — Can RAF afford to pay out claims?

The board is expected to initiate a process of filling vacant executive positions that will ensure the smooth operation of the entity.

“We also stressed to them that they must cooperate with current and future SIU investigations,” Creecy said.

In March, Nicholas Mokoena, deputy business unit leader at the auditor-general, told Scopa that the RAF had accumulated a deficit of R25.5 billion over the past five years.

About R1.5 billion of that amount was reported in the 2023/24 financial year.

This means the RAF’s liabilities far exceed its total assets.

The RAF is mandated to settle accident claims within 120 days, but this has not happened for years. This has resulted in a backlog that the fund is struggling to clear.

“The RAF has financial difficulties and may not be able to pay liabilities as they fall due. The RAF did not achieve the target relating to the reduction of the three-year-old open claims,” said Mokoena.

“This indicator measures the rate at which the RAF reduces backlog claims or claims on the system for three years or more. The target was 20% and the achievement was 16.91%.”

The fund’s financial statements indicate the institution cannot cover current and long-term claims.

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