BackgroundUnder-five malaria in Nigeria is a leading cause of global child mortality, accounting for 95,000 annual child deaths. This is largely due to high out-of-pocket medical expenditure, which discourages care-seeking and use of effective antimalarials in the poorest households. Resultingly, Nigeria has some of the worst indicators of child health equity in the world, stressing the need to evaluate the outcomes of potential interventions across socioeconomic lines. Methods Using a decision tree model, we conducted an extended cost-effectiveness analysis of subsidies covering the direct and indirect costs of case management of under-five malaria in Nigeria. We estimated the number of child deaths averted, out-of-pocket (OOP) expenditure averted, cases of catastrophic health expenditure (CHE) averted, and cost of implementation. We assumed pro-poor increase in treatment uptake, as the malaria burden in Nigeria disproportionately affects the poor.FindingsFully subsidizing direct medical costs and instating a voucher system covering non-medical and indirect costs would annually avert over 19,000 under-five deaths, 8,600 cases of CHE, and US$205.2 million in OOP spending. Per US$1 million invested, this corresponds to an annual reduction of 76 under-five deaths, 34 cases of CHE, and over US$800,000 in OOP expenditure. On account of low initial treatment coverage in poorer socioeconomic groups, health and financial-risk protection benefits would be pro-poor, with the poorest 40% of Nigerians accounting for 72% of all deaths averted, 55% of all OOP expenditure averted, and 74% of all cases of CHE averted. Subsidies targeted to the poor would see greater benefits per dollar spent than broad, non-targeted subsidies.ConclusionSubsidizing case management of under-five malaria for the poorest and most vulnerable would reduce illness-related impoverishment and child mortality in Nigeria while preserving limited financial resources. This study is an example of how focusing a targeted policy-intervention on a single, high-burden disease can yield large health and financial-risk protection benefits in a low and middle-income country context and address equity consideration in evidence-informed policymaking.