This study estimates rates of returns on education from self-employment activities (maize production, tobacco farming and business enterprises) and on overall household income. The results reveal that for different levels the returns to education are lowest with respect to maize production (1.3 – 7.3%), followed by tobacco earnings (3.5 - 25%) and highest with respect to business enterprises (4 – 71%). The returns from overall household income per capita range from 1.4% in primary education to 27% in university education. In all cases the return from primary education are very low, suggesting that primary education may be necessary but not sufficient for poverty reduction. The simulation of impacts of education on household income has revealed that targeting the poor households to complete higher education almost eliminates poverty, although major changes in poverty occur with ensuring that at least one member of the household complete junior secondary school.