A senior partner at KPMG Ghana is advising businesses that may benefit from government's stimulus package to spend it in critical projects that will help in reviving their operations.

Anthony Sarpong said the fund must not be seen as free money to be spent on unplanned projects.

He said the fund could not have come at a better time to support Small and Medium Enterprises (SMEs) to mitigate the negative impact of the novel coronavirus.

"If you have businesses that really can take care of today's needs then you can go ahead and expand your business but the key thing is that whatever you do as a business, work and plan within the limit of your cash flow,” he told Joy Business.

According to him, the stimulus fund is one of the major interventions to support small businesses in this pandemic and it is important to know that it is an emergency fund.

"This means government has realised the challenges of business and says a lifeline will be given to boost their operations.

“This should be a mindset for businesses to know that this is a fund to bring you to life and not free money. You can spend it anyhow but for boosting your business on critical areas that can allow you to continue to operate.

"By this, you can be able to bring back the business once again and pay back government while your business is sustained as well," he advised.

In a bid to cushion Ghana’s economy of the impact of coronavirus, government has made available a stimulus package of a minimum of ¢1 billion to households and businesses, particularly small and medium scale enterprises.

This was announced by President Akufo-Addo during one of his address to the nation on the updates to Ghana’s enhanced response to the coronavirus pandemic.

The President also mentioned that commercial banks are effectively responding to the Bank of Ghana’s 1.5 per cent decrease in the Policy Pate and 2 per cent in reserve requirement with a ¢3 billion facility.

The BoG in its assessment indicated that the negative impact of Covid-19 on exports, imports, taxes, and foreign exchange receipts will culminate in a slowdown in economic activity.

Hence, GDP growth is forecasted to decline to 5 per cent in a baseline scenario. In the worst-case scenario, GDP growth estimates could be halved to about 2.5 per cent this year.

Further to the stimulus package, the President indicated that the government will be providing additional relief, such as an extension of the tax filing date from April to June; a two per cent reduction of interest rates by banks, effective April 1, 2020.