Worldwide savannas and arid grasslands are mainly used for livestock grazing, providing livelihood to over a billion people. While normally dominated by perennial C4 grasses, these rangelands are increasingly affected by the massive spread of native, mainly woody legumes. The consequences are often a repression of grass cover and productivity, leading to a reduced carrying capacity. While such encroachment by woody plants has been extensively researched, studies on similar processes involving herbaceous species are rare. We studied the impact of a sustained and massive spread of the native herbaceous legume Crotalaria podocarpa in Namibia’s escarpment region on the locally dominant fodder grasses Stipagrostis ciliata and Stipagrostis uniplumis. We measured tussock densities, biomass production of individual tussocks and tussock dormancy state of Stipagrostis on ten 10 m x 10 m plots affected and ten similarly-sized plots unaffected by C. podocarpa over eight consecutive years and under different seasonal rainfalls and estimated the potential relative productivity of the land. We found the percentage of active Stipagrostis tussocks and the biomass production of individual tussocks to increase asymptotically with higher seasonal rainfall reaching a maximum around 300 mm while the land’s relative productivity under average local rainfall conditions reached only 40% of its potential. Crotalaria podocarpa encroachment had no effect on the proportion of productive grass tussocks, but reduced he productivity of individual Stipagrostis tussocks by a third. This effect of C. podocarpa on grass productivity was immediate and direct and was not compensated for by above-average rainfall. Besides this immediate effect, over time, the density of grass tussocks declined by more than 50% in areas encroached by C. podocarpa further and lastingly reducing the lands carrying capacity. The effects of C. podocarpa on grass productivity hereby resemble those of woody encroachers. Therefore, against the background of global change, the spread of herbaceous legumes and the underlying patterns needs to be further investigated to develop adequate counter measures for a sustainable land use.