The recent increase in funds flowing into Nigeria’s Federation Account, in part due to the financial gains from fuel subsidy removal, presents a significant opportunity for policy reform. It is essential to focus on optimizing and ensuring accountability for the Federal Allocation Account Committee (FAAC) transfers, particularly at the state and local government levels. By examining the implications of increased FAAC allocations on state budgets, it becomes clear that more equitable distribution and transparent management of public funds are needed. Additionally, the impact of these increased transfers on government funding for health highlights the importance of prioritizing health sector financing. This focus on fiscal responsibility and transparency is crucial for shaping public policies that support sustainable development and improve public health outcomes across Nigeria.