Impact of Transport Costs on Small and Medium Enterprise Operations in Maiduguri, Borno State

Small and medium enterprises (SMEs) are engines of economic growth in Nigeria, and transport costs represent a significant component of their operational expenditure. This study investigates the impact of transport costs on the operations and profitability of SMEs in Maiduguri, the capital of Borno State in the North East geopolitical zone, a region that has experienced prolonged security disruptions affecting supply chains. Using a descriptive survey design, data were collected from 150 SME owners in the food processing, retail, and artisan sectors through structured questionnaires and financial records analysis. The study measures the share of transport costs in total business expenses, the effect of route insecurity on logistics planning, and the strategies employed by businesses to manage transport costs. Findings show that transport costs constitute between 18 and 35 percent of total operational costs for SMEs, significantly exceeding the national urban average. Security-related route closures have forced businesses to use longer, more expensive alternative routes, further eroding profit margins. SMEs predominantly rely on informal transport arrangements with no service level agreements, exposing them to unreliable delivery timelines. The study recommends the development of secure and subsidised freight corridors, cooperative transport arrangements among SMEs, and state government investment in rehabilitating key market access roads. These findings are particularly relevant for economic recovery planning in the North East. Keywords: transport costs, SMEs, Maiduguri, supply chain, North East Nigeria.