[release-1.16] Bump CAPI to v1.7.8

[mboersma]

What type of PR is this?

/kind cleanup

What this PR does / why we need it:

Updates CAPI to v1.7.8. Also bumps cert-manager.

Which issue(s) this PR fixes:

N/A, but see #5185 for prior art.

Special notes for your reviewer:

• cherry-pick candidate

TODOs:

• squashed commits
• includes documentation
• adds unit tests

Release note:

Bump CAPI to v1.7.8

[codecov]

Codecov Report

All modified and coverable lines are covered by tests ✅

Project coverage is 52.82%. Comparing base (74f38f2) to head (30592f6).
Report is 5 commits behind head on release-1.16.

Additional details and impacted files

@@              Coverage Diff              @@
##           release-1.16    #5256   +/-   ##
=============================================
  Coverage         52.81%   52.82%           
=============================================
  Files               273      273           
  Lines             29143    29143           
=============================================
+ Hits              15392    15394    +2     
+ Misses            12949    12947    -2     
  Partials            802      802           

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• Flaky Tests Detection - Detect and resolve failed and flaky tests

[mboersma]

/retest

[mboersma]

/retest

[mboersma]

/retest

[willie-yao]

/lgtm
/approve

[k8s-ci-robot]

LGTM label has been added.

Git tree hash: d7f7936470afaf8b82ae76db3d6c5a9cc2f5a4c5

[k8s-ci-robot]

[APPROVALNOTIFIER] This PR is APPROVED

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