06 Dec 2017

Minister of Finance and Economic Development, Mr Kenneth Matambo has applauded Motor Vehicle Accident (MVA) Fund for its 30 years of existence and for serving the nation.

Mr Matambo was speaking during the MVA Fund end of year road safety campaign and 30th anniversary celebration in Mahalapye recently.

He said although there had been a lot of challenges along the way, there was a lot to be celebrated and that such milestones called for recognition.

He said the milestones included, change of the MVA Fund from the fault based system, which benefitted only a few people to a hybrid system, which now offers universal coverage to all those affected by road crashes.

“The expansion of service coverage by opening offices in remote parts of the country and introduction of service standards to improve service turnaround time to achieve positive ratings by customers also need to be celebrated,” he said.

He also said the investment in road safety programmes and initiatives by supporting high impact interventions such as Traffic Law Enforcement and Emergency was one of the achievements.

He also cited that there had been a conclusion of service level agreements with private emergency medical service providers to evacuate those injured from the scene of crashes to the most appropriate medical facility and thereby enhancing the prospects of recovery.

He said his ministry was committed to working with MVA Fund to ensure that in the face of road safety challenges, the fund continues to provide the excellent service it had been providing to all Batswana.

Further, he said Motor Vehicle Insurance Fund as it was called then, was established through the Motor Vehicle Fund Act of 1986 and started operations in 1987 to compensate road accident victims arising from negligent driving.

He explained that the fund came into existence at the time when the short term insurance industry had proposed to increase the premiums for third party cover by up to 600 per cent, owing to escalating road traffic crashes, which impacted negatively on the insurance industry due to high claims pay outs.

He said government noted that the high insurance premiums would not be affordable for many Batswana, and resolved to create a fund that would provide automatic third party cover for bodily injury and death resulting from road traffic crashes, funded through a fuel levy.

He said the 1986 Act relied heavily on the fault system where negligence of the driver was the basis for compensation of those affected by road traffic accidents and this meant that innocent victims were excluded from the fund’s compensation where negligence of the driver could not be proved.

However, he noted that the fund was subsequently amended in 1998 to address issues pertaining sustainability of the fund and to introduce new benefits and limitations, which also inspired the change in the name to the Motor Vehicle Accident Fund.

On the issue of road safety, he said the situation in Botswana remained a serious cause.

He explained that the escalating number of road crashes, particularly those resulting in severe injuries and deaths, led to increased claim costs, which ultimately threaten the fund’s ability to provide for road accident victims.

He said the net provision in claims costs for the past three years continued to rise from P122 million in 2014 to P240 million in 2016 resulting in the fund recording a comprehensive loss of P261 million in 2016. He said road crashes in the country claimed an average of 420 lives every year and negatively impact thousands more.

He said in terms of social impact, road crashes leave many children without care givers, which in turn leaves them vulnerable to social ills such as sexual and drug abuse.

Therefore, he said it is against this background that MVA Fund continued to aggressively promote road safety through various public education programmes. ENDS