FINANCE minister Mthuli Ncube yesterday said government will next month introduce a Road Accident Compensation Fund to assist victims and families with medical and burial expenses. He proposed in his 2019 national budget statement to redirect 5% of third-party insurance cover to the Road Accident Compensation Fund with effect from December 1.
Candid Comment,Faith Zaba
“An opportunity for third-party insurance to also contribute towards expenses for accident victims, this exists.
Modalities of the fund will be announced in due course,” he said.
The introduction of the fund is welcome as it comes at a time Zimbabwe has been hit by a spate of bus accidents which have killed scores of people. Zimbabwe was the only country in the region without a road accident fund.
Official figures as at June 2017 show that Zimbabwe experiences over 1 800 fatalities annually (five people killed daily) with over 30 000 people getting injured in road accidents. Statistics also show that an accident occurs every 15 minutes in the country.
The proposal was conceived by the Ministry of Transport as a mechanism to pool financial resources to be used to assist victims of road accidents and their families. It was borne out of the realisation that third-party insurance does not really assist the victims, but instead the premiums have largely been retained to the benefit of insurance companies.
In most cases, government ends up assisting the bereaved families with some money due to lack of proper insurance cover and insurance firms’ refusal to settle claims.
Just in the second quarter of 2017, according to official figures, short-term insurers recorded gross premium written of US$271 million.
Currently, third-party insurance is mandatory in terms of the Road Traffic Act, which is administered by the Ministry of Transport and Infrastructure Development.
This is coming at a time the country has been hit by a spate of bus accidents which have killed scores of people.
While government should be commended for introducing this social safety net, there is general distrust of state-managed projects as most of them have been accused of shocking levels of corruption, gross mismanagement and poor corporate governance. In view of this, the fear is that the funds raised might not reach the intended beneficiaries due to misuse and looting of public funds as has been evidenced by the failure of other state-run funds to carry out their mandates, but instead they have been hit by a string of multi-million dollar financial scandals.
Zimbabweans have seen how organisations like the Zimbabwe National Road Authority (Zinara) and the National Social Services Authority (Nssa) have been badly managed. Millions of dollars have been siphoned off through corruption by government elites and parastatal executives hence the mistrust by Zimbabweans of government managing such funds.
Like in South Africa, Namibia and Botswana, Zimbabwe could also fund the scheme from already existing fuel levies. But for it to work, the fund has to be managed professionally.