While it is generally believed that the magnitude and composition of vegetation cover influence land-atmosphere water and carbon fluxes, observations indicate that in some cases, fluxes are insensitive to land cover contrasts. This seeming inconsistency may be resolved by contrasting fluxes over short and long timescales. To explore this potential contrast, we developed and tested a model designed to simulate daily to decadal land surface water and carbon fluxes and vegetation dynamics for water-limited ecosystems. The model reproduces (R2 > 0.76) observed daily fluxes under increasing water limitation and captures representative dynamics of leaf area and fractional cover of dominant grass and wood vegetation. We parameterized the model for southern African savannas and conducted two sets of numerical experiments with either having fixed (static) grass and wood covers or allowing them to adjust dynamically with production. Static simulations reveal that the direct effect of rainfall on soil moisture is more important than the prevailing grass and wood cover states in controlling annual transpiration and production. Dynamic simulations indicate sensitivity of daily fluxes to vegetation cover states during high soil water periods. However, depletion of finite soil water prevents an integrated effect from lasting over interstorm to annual timescales. Correspondingly, while seasonal vegetation dynamics enhance seasonality in fluxes, vegetation dynamics have only minor influence on annual transpiration and production. In fact, annual rainfall explains most (R > 0.85) of the temporal variation in annual water and carbon fluxes. Hence, despite alteration of daily and seasonal distributions of fluxes, for water-limited ecosystems, vegetation dynamics have little effect on annual transpiration and production.