The European Union's humanitarian aid arm said that famine is likely to engulf the Sahel belt which could affect millions.
The warning comes close at the heels of a leaked government forecast, confirmed by Niger, that half its population will face food shortages this year
Niger confirmed on Thursday that around half its 15 million population could face either severe or moderate malnutrition this year. There is no clear picture yet of the extent of risk elsewhere, notably in populous northern Nigeria.
Malnutrition has been a constant threat to the populations of the Sahel, which runs along the southern edge of the Sahara, but some experts say global warming has made matters worse.
Lack of rain contributed to a 26 percent fall in Niger's 2009/2010 cereal harvest compared to the year before, official data showed. Grains at some local markets are already trading at nearly double their usual levels.
O'Neill said the latest estimate of funds needed to avert the crisis stood at $220 million this year for Niger alone, but acknowledged that donors could struggle to raise money after digging into reserves for the Haiti earthquake aid effort.