AFRICAN JOURNAL OF ECONOMICS AND FINANCIAL ISSUES

This study examines the impact of renewable energy consumption on total factor productivity (TFP) in the countries of the Middle East and North Africa (MENA) region. The energy transition to renewable sources is a major priority for these nations. However, they face significant challenges linked to heavy dependence on fossil fuels and institutional weaknesses. Using panel data covering the period 1990-2019 and applying panel quantile regression and the generalized method of moments (GMM), we assess the relationship between renewable energy and TFP. The results indicate that renewable energies positively influence TFP only at the highest productivity levels, suggesting that the region’s most developed economies benefit most from this transition. In contrast, non-renewable consumption remains a central driver of productivity, underlining the region’s persistent dependence on traditional energies. Furthermore, innovation and trade openness are key factors in increasing productivity, while human capital has an insignificant impact. This study highlights the importance of targeted policies for investment in renewable energy infrastructure, the promotion of green innovation, and comprehensive strategies to facilitate an efficient and sustainable energy transition in the region.

Keywords: total factor productivity, renewable energy, quantile regression, MENA region
JEL Classification: C21, D24, Q20, O53