For any custom module we can add category drop down selection in system configuration.

Let’s start with creating a module names Magemonkeys_Categorydropdown

in adminhtml we can create file system.xml

Here is code for call category selection

<group id="categoryselection_setting" translate="label" type="text" default="1" sortOrder="1" showInDefault="1" showInWebsite="1" showInStore="1">
    <label>Setting</label>
    <field id="categorylist" translate="label" type="multiselect" sortOrder="1" showInDefault="1" showInWebsite="1" showInStore="1">
        <label>Please Select Category</label>
        <source_model>MagemonkeysCategorydropdownModelConfigSourceCategorylist</source_model>
    </field>
</group>

and then we can create file Categorylist.php in MagemonkeysCategorydropdownModelConfigSource

<?php
namespace MagemonkeysCategorydropdownModelConfigSource;

use MagentoFrameworkOptionArrayInterface;

class Categorylist implements ArrayInterface
{
    protected $_categoryHelper;

    public function __construct(MagentoCatalogHelperCategory $catalogCategory)
    {
        $this->_categoryHelper = $catalogCategory;
    }

    public function getStoreCategories($sorted = false, $asCollection = false, $toLoad = true)
    {
        return $this->_categoryHelper->getStoreCategories($sorted , $asCollection, $toLoad);
    }

    public function toOptionArray()
    {

        $arr = $this->toArray();
        $ret = [];

        foreach ($arr as $key => $value)
        {

            $ret[] = [
                'value' => $key,
                'label' => $value
            ];
        }

        return $ret;
    }

    public function toArray()
    {

        $categories = $this->getStoreCategories(true,false,true);

        $catagoryList = array();
        foreach ($categories as $category){

            $catagoryList[$category->getEntityId()] = __($category->getName());
        }

        return $catagoryList;
    }

}

That’s it.