I'm a fan of neither, however people do seem to be underestimating Jiraiya.
Also, I think somebody somewhere claimed the Raikage was more powerful than Nagato and the Six Paths of Pain? Seriously? Nagato could control life, and destroy entire hidden villages.
As for Raikages ninjutsu, unless he can learn Chidori or Rasengan or other Ninjutsu that require no hand seals, then he is pretty much limited to Raiton armor.
As for the fight, Jiraiya can instantly form a great ball Rasengan in sage mode. I'm not sure what kind of control Raikage has whilst traveling at ridiculously fast speeds, but I'm going to assume making sharp turns is out of the question. Theoretically, Jiraiya could simply form a great ball Rasengan and just hold it in the direction the Raikage is approaching from (which Jiraiya would be able to detect) especially if he had a barrier up.
And Jiraiya is starting in SM, are we to assume he is starting with ma and pa? If so, Raikage will definitely have his hands full.
In my honest opinion, this fight would be very difficult to determine a clear winner. Both would have their hands full, that's for sure.
That's just me trying to undermine the whole "Raikage is so silly fast and can smash anything instantly" theory.