Ghana's cedi, Zambia's kwacha worst African currencies in 2014

Ghana's cedi and Zambia's kwacha are set to end 2014 as the worst performing African currencies among a small basket that are relatively liquid, as falling commodity prices take a toll on some of the continent's "lion" economies.

The cedi has lost about 27 percent in 2014, one sign of a fiscal crisis in an economy that grew strongly in previous years on gold, cocoa and oil exports. Economic growth in 2015 is seen slowing to 3.9 percent in 2015 from an estimated 6.9 percent this year. The cedi slumped around 40 percent earlier this year but a Eurobond issue, cocoa loan inflows and talks with the International Monetary Fund on a financial assistance programme helped it recoup some losses.

Zambia's kwacha is ending the year on the backfoot amid tax rows with mining houses, a lower growth forecast and a looming election.

At 1030 GMT, commercial banks quoted the currency of Africa's second-largest copper producer at 6.3750 per dollar, bringing its losses over the past three weeks to 3 percent and those for the year to around 15 percent.

Zambia on Tuesday cut its 2014 growth forecast to 6 percent - still brisk by global standards - from a targeted 6.5 percent, citing operational challenges at some mines.

The forecast for the next three years is 7 percent but that may be hard to reach with copper prices near 4-1/2 year lows on mounting worries about growth in China, not to mention brewing rows with mining companies over tax issues.

Finance Minister Alexander Chikwanda said the government intended to resolve the issue of VAT refunds with mining companies and hoped to agree with them on new mining taxes.

He also said the government remained committed to a new mining tax regime that comes into effect on Thursday, which the industry say it can ill afford.

"Investors want to invest in a country whose economy is growing so obviously the lower forecast is bad for the kwacha. Investors are also watching how the elections go," said Lubinda Habazoka, an analyst with the Zambia's Copperbelt University.

Zambia is also withholding $600 million in VAT refunds owed to mining companies and will only repay the cash when companies produce import certificates from destination countries. They say this is impossible because of middlemen in the trade.

The country is due to hold a presidential election on Jan. 20 following the death in October of its leader Michael Sata, and it is unlikely that the tax issue will be resolved before a new administration comes to power.

Nigeria's naira has shed around 13.5 percent this year, South Africa's rand has fallen over 10 percent while the Kenyan and Ugandan shillings have yielded about 4.5 and 9 percent respectively.