Nigeria’s Conditional Grants Scheme (CGS) emerged out of (i) the backdrop of an inefficient and top-down public service in which citizens had for long periods lost confidence, (ii) the recognition of the central role of the country’s federal structure to public service delivery, and (iii) the opportunity provided by the debt-relief gains to scale-up funding towards the MDGs. By focussing on flexibility to States’ own priorities within national policy frameworks, comprehensive monitoring, and sensible conditionalities, the Scheme has recorded impressive achievements in the delivery of social infrastructure, in strengthening the partnership between the three tiers of government, in leveraging MDG investments, and in encouraging public expenditure reform. Going forward, the priorities are to extend the CGS to include a more prominent role for Local Governments, to deepen Public Expenditure Reform, and to integrate diverse investments into a system of public service delivery. This will ensure that all tiers and all agencies in subnational government are able to recognize and commit to the acceleration of progress towards the MDGs, which speak to the core of their constitutional mandate.