The U.S. Millennium Challenge Corporation (MCC) canceled a $473 million aid package in March after elections in the Zanzibar archipelago that it said were not free and fair. It said at the time that other aid commitments would not be affected.
Haji Semboja, an economics professor at the University of Dar es Salaam, told Reuters the new assistance implied that Washington was satisfied with ongoing government reforms.
"Although the MCC initiative and this new funding are two separate programmes, this new aid commitment is a sign that Tanzania is heading in the right direction," he said.
The U.S. embassy said the $407 would be disbursed this year to support the areas of health, agriculture, natural resource management, education, energy and democratic governance.
It is part of a five-year aid deal signed between the U.S. Agency for International Development (USAID) and Tanzania on Monday and constitutes half of the U.S. government's expenditure on development in Tanzania, the U.S. embassy said.
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