Cameroon and Niger have become the latest countries affected in the region, in an outbreak that has hit Burkina Faso, Ivory Coast, Ghana and Nigeria.
According to senior animal health officer at FAO, Eran Raizman, the virus is already practically endemic in Nigeria and FAO expressed fear that other countries do not have the budget.
"The human resources and the technical capacity adequate to eliminate the disease will face the same risk.
"In terms of food security and livelihoods it's a severe issue because it hampers people's efforts to progress economically.
"If the policies are to cull all the infected birds people loose all they have,’’ Raizman said.
He told the Thomson Reuters Foundation in a phone interview that if the government was not fast enough to pay the compensations they would not have anything to live off.
H5N1 bird flu first infected humans in 1997 in Hong Kong.
It has since spread from Asia to Europe and Africa and has become entrenched in poultry in some countries, causing millions of poultry infections and several hundred human deaths.
Raizman said in spite of the urgency to contain the disease, it was challenging to raise the funds needed to help countries like Nigeria cope with infections and eliminate the risk of the virus becoming endemic.
"Nearly 3.5 million birds in Nigeria have been killed by the virus or culled to stop its spread.
"If we do not act now we will cry for generations because it will be very difficult, given the growth of the poultry industry in Africa, to control the disease,’’ the FAO said.
According to FAO, poultry production has grown rapidly across West Africa in the past decade; the Ivory Coast alone has seen output expand by over 60 per cent.