Local Economic Development: The Case of the Kumbo Potato Cluster

One of the most important stakes in decentralization for Africa is local economic development (LED).  The ability to grow economies at subnational level is indispensable to fighting poverty, creating the 10 million jobs per year that Africa needs and establishing a tax base for local governments.

If steps towards decentralization are still hesitant across the continent, LED is in an even more precarious position. However, interesting initiatives have been taken by some local governments and even if results still leave a lot to be desired, there are case studies with lessons learnt which can serve to develop a full-fledged LED strategy.  The Kumbo Potato cluster initiative is one such case study.

Kumbo in the North West Region of Cameroon is one of the lead potato producers in the Central African sub-region.  Even though Cameroon’s maximal production (weather and all other conditions being favorable) of 400 000 tons is far below the national demand of 1 million tons, Kumbo potatoes are exported to Nigeria, Tchad, Central Africa, Equatorial Guinea and Gabon. The Kumbo Urban Council was thus correct to identify the potato value chain as one which would have significant impact on the economic development of the municipality.

Potatoes met several key requirements:

Market

•       Demand for potatoes on both the national and sub-regional market is high and growing.

Competitive Advantage

•       While potatoes are produced throughout the North West and West  regions, the Kumbo variety is specific and has a high market demand

•       Kumbo is well positioned geographically for sales to major cities and neighboring countries

Production Capacity

•       Kumbo is one of Cameroon’s largest potato producers

•       Kumbo Urban Council was in contact with BIPFU – Bui Potato Farmer’s Union with over 14,000 potato farmers as members

Value-add potential

•       The Kumbo Urban Council identified enormous potential for Kumbo potatoes on the market with value that could be added locally, creating businesses and jobs in the municipality.

The Municipality then adopted a step-by-step strategy to develop potatoes as a LED value-chain for Kumbo.

Step 1  Market analysis and identification of options for added value
Step 2  Mobilizing partners ans stakeholders
Step 3  Marketing the Kumbo Potato brand

Step 1: Market analysis and identification of options for added value

The KUC analyzed the different options for added-value in the potato value chain.  Keeping in mind the objectives of all the stakeholders which included market opportunity for businesses and job creation for the Council, the KUC carried out a market analysis in Kumbo, Bamenda, Douala and Yaounde and came up with the following key options:

  • Packaging and branding – The Kumbo Potato is desired on the market for its flavor, low water content and suitability for certain local dishes. The market study determined that simply packaging and branding the Kumbo Potato so that it was easily recognizable to consumers in markets and especially supermarkets, would enable farmers to increase their pricing and their market share. This option was low hanging fruit that would position the Kumbo Potato brand.
  • Transformation – The market study identified potato flour, potato chips and potato peelings for animal feed as the ideal products for entry into transformation. The KUC’s market study which was carried out by STRATEGIES! was simply a preliminary identification of potential products. The KUC determined that private sector investors would carry out more in-depth studies before setting up units for transformation.
  • Export – The KUC did not carry out a study on the export of its potatoes, but already knew that potatoes were being exported to at least seven cities and at least five neighboring countries. It was determined that the existing exporters could be brought together by the KUC to determine ways in which the council could support this transnational trade.

Step 2: Mobilizing partners and stakeholders

The KUC’s role in LED was one of facilitation and creating a favorable business environment.  For all other functions, the Council had to mobilize partners, notably:

Role

Partners

Technical Advisers

To enable the KUC obtain the technical expertise it needed for this LED program, the council established a multi-year partnership with the consulting firm STRATEGIES! through German Development Cooperation, GIZ.

The Dutch Cooperation, SNV also provided technical assistance through a multiple-year partnership.

Producers

The Bui Potato Farmers Union (BIPFU), a federation of 14,000 potato farmers, was the KUC’s main partner to ensure production.  BIPFU was involved from the very beginning of the project and used their knowledge of production and the market to help determine many of the KUC’s strategies. They also intended to be an investor in any transformation projects.

Given that demand on the market was far higher than supply, BIPFU started off with improving production.  Farmers received technical assistance to move from single cycle annual production to a triple cycle annual production. Farmers acquired training on improved seed multiplication and high productive farming techniques which transformed the farming of potatoes in this area.

Researchers

The KUC determined early that research assistance would be needed for both production and transformation.  The council got in touch with IRAD (Institute of Agricultural Research for Development), which aided the project with production techniques. The KUC also established contacts with the University of Dschang in anticipation of the needs of investors in transformation units.

Investors

After taking several measures to improve the investment environment in Kumbo as a whole (see LED Investment Handbook project) and doing a summary study of the potential in the potato value chain for investors, KUC then got in touch with potential investors throughout the country and in the Cameroon Diaspora.  Despite the fact that no investment has come to fruition, private sector companies are still contacting the KUC today for potential investment today in the potato sector.

Step 3: Marketing the Kumbo Brand

The KUC determined that it had a role to play to position and market the Kumbo Potato brand.  The Council participated in forums and fairs in other cities in the country to market its potatoes, met with key ministries at the national level to inform about its LED strategy and held the Kumbo Potato Fair.

Two editions of the Kumbo Potato Fair were carried out with great success at the municipal level.  The event attracted several thousand visitors from within and outside the municipality.  Kumbo Potatoes were showcased through production, local recipes and sales.  The Potato Fair gave all stakeholders a glimpse of what the success of this LED strategy could look like.

Lessons learned:

While it had some successes in terms of production, branding, sales and visibility, the Kumbo Potato Cluster LED Strategy did not meet its objectives of private sector investment and job creation. 

The KUC did a good and excellent job over a three-year period of developing the strategy, mobilizing stakeholders and promoting the Kumbo Potato brand.  It was faced however with certain key obstacles:

  • Funding for long-term technical assistance – The KUC needed long-term assistance in several domains such as financial investment, to carry this project to fruition. It unfortunately did not have that and had to work with consultants on short term and voluntary basis.
  • National Investment Climate – While the KUC identified and began working with two very serious investors who were interested in medium-sized transformation industries, both finally did not investment due to elements they found unfavorable in the national investment climate. One found the taxes to be excessive and the second wanted certain guarantees from the Ministry of Commerce to reassure foreign partners. The delays and lack of enthusiasm in obtaining these guarantees, discouraged the investor.  
  • Sales skills were not reinforced before production increases – In its cooperation with BIPFU, the KUC agreed with the federation that production should be increased. BIPFU however lacked the skills to market and sell the increased production.  When potato farmers increased their production, but were unable to find clear outlets for sales, they were discouraged and lost enthusiasm for the project.  Improved structuring of the project would have enabled BIPFU to reinforce its marketing strategies before increasing production.

Best practices:

The Kumbo Potato Cluster was an excellent experience for the KUC.  The Council did many things right and built LED capacity.  Below are some of its best practices which other local governments can learn from.

  • Overall LED Strategy and selection of potato cluster value chain – The KUC’s overall LED strategy and focus on the potato cluster strategy was well developed and remains pertinent to date. It was innovative and avant-garde for the KUC to focus on LED, develop key strategies and carry out key actions for implementation.
  • Partner and stakeholder mobilization – The KUC did a very good job of mobilizing a wide variety of partners and key stakeholders early and involving them in the development and implementation of the LED strategy.
  • Improvement of the Kumbo Investment Climate and Promotion of the Kumbo Potato Brand – The KUC developed an Investment Handbook, implemented the Kumbo Potato Fair and carried out various other actions that improved the Council’s positioning for investment. These actions were avant-garde, improved the Council’s economic positioning and increased sales for the Kumbo Potato.