In southern African drylands, an important driver of deforestation is the ongoing conversion of woodland to smallholder agriculture. Our study in NE Namibia and SW Zambia evaluated the potential of operational earth observation satellites to characterize land-use change processes and quantified their impact on soil organic carbon (SOC) and nutrient concentrations. We found that the area under agricultural use increased by 24% from 2002 to 2013, mainly at the expense of natural vegetation (i.e., woodland). This conversion caused a decline in SOC and total N and tended to increase plant available P in the soils of old agricultural fields. The effects were most pronounced in NE Namibia, where the total SOC stocks were 19.6% (±18.4 SD) lower in agricultural land compared to woodland. Moreover, the losses in SOC and total N tended to result in a decline of predicted maize yields calculated with the QUEFTS model by ~15% when comparing soils of old agricultural fields and woodland. Overall, our results indicate that long-term continuation of low-input arable farming can reduce soil fertility.